The time to get patent smart in agrifood is now

If you’re a patent attorney like me, you’re used to Canadian companies telling you they aren’t considering patenting because they don’t think it’s “defensible”. This reasoning is supposed to be a conversation-ender. The attorney is supposed to accept this sage-sounding rationale and go on with their day.

But the truth is, that never was an answer, and the people saying it don’t usually mean it either. The real hope (and it is a kind of hope) among Canadian companies is no one else is patenting. Meanwhile, as it turns out, plenty of patenting is going on; we’re just being left behind.

This year, Protein Industries Canada did a landscape review of patenting activity in plant-based ingredient manufacturing. Before seeing the results, we thought we might find out that Canadian companies were quietly patenting a lot in this area, but maybe just slow to commercialize. Unfortunately, we were wrong.

Here are a few things we learned from the report:

• Over the past 10 years, global patent filings in plant protein ingredients have tripled, with the biggest growth since 2019.
• Over this same time period, the patenting activity among Canadian filers is barely a blip. The trend line is completely flat with no change or growth, despite the fact that Canada is a world-leading producer of raw materials for plant proteins of every type.

On some level, the news is good; the plant-based ingredient manufacturing sector is in its early stages. Even the multi-national food and agriculture giants have not dominated the patent landscape yet. In the 20-year period we studied, there were 5,693 applications filed. Compare this to 9,208 for EV battery technology in the same period with the same parameters. From these numbers, it looks like a really nascent sector. When the goal is avoiding collision with existing rights (i.e. freedom to operate), this is good news.

There is white space—for the moment. But based on the growth trend in global patent filings, the time to get on board is now.

Patenting activity will continue to grow—with or without Canadian companies involved. By waiting and watching, a few things will happen:

1. Patenting will get harder. It will be harder to find novelty in a crowded field and to get decent scope of protection (in other words, valuable patents). Lots of good ideas will be out there already and companies will be stuck protecting improvements (think of it like patenting the three-bladed razor after the two-bladed razor is already patented).
2. In tough times, established companies with patents are likely to defend their innovations with litigation if they feel threatened by emergent players. Better to be the one threatening, than the one being threatened.
3. New companies with patents are likely to benefit disproportionately from scarce funding opportunities and “good exits”. In a time of shrinking capital pools and market consolidation, this is likely to become even more pronounced.
4. And I almost hesitate to raise this, but a bankrupt company with patents is in a much different position than a bankrupt company with no patents.

Which brings us back to “defensibility”. By default, innovating without patenting accumulates trade secrets (that is, assuming a company is able to keep those developments a secret). But trade secrets on their own are harder than ever to defend. Employee turnover places those secrets at risk. And the waning power of non-competition clauses throughout both Canada and the United States makes it difficult to recover the value of a trade secret stolen by an ex-employee. Maybe that’s not a worry in every case, but what about walling yourself off from collaboration and business opportunities? It’s hard to build a base of trust if you can’t safely share information outside of your organization to pursue a business transaction or engage in a joint research project. Patenting is an exercise of managed disclosure. You disclose a limited amount so that you stake it out as yours, and you can talk about it without fear.

Building processing facilities is expensive, recruiting and training up a workforce is expensive, buying and commissioning specialty equipment is expensive, building a customer base and growing a market for something new is expensive. All these things have risk and cost; making assets out of nothing is never easy.

We accept this. Patenting is expensive, requires a lot of paperwork and involves lawyers. I’ll be the first to admit it is a pain in the butt. All of this is true—but it’s critical for our companies and it’s critical for the country.