More than 40 per cent of Canadian inventions are ultimately owned by foreign firms, highlighting a long-standing gap between innovation creation and innovation retention in Canada. This opinion piece by Michael Huynh and Francois Guay of the Canadian Cybersecurity Network argues for a layered defense of Canada's innovation economy.
The Cost of the Innovation Gap
Canada has already lived through the consequences of that gap. Nortel Networks, once one of the country's most valuable companies and a global telecommunications leader, suffered years of cyber intrusions tied to the theft of sensitive business plans, research and intellectual property before ultimately collapsing into bankruptcy. The cost was not simply a breach. It was the erosion of a Canadian innovation advantage.
Intangible Assets at Risk
Canada is entering a phase where its most valuable assets are no longer physical. They are proprietary designs, algorithms, manufacturing processes and models – the intangible edge that separates world-class companies from those that simply manufacture on another's terms. The legal tools to protect that edge are well-established: patents, trademarks, industrial designs and trade secret protections. Yet too few Canadian businesses deploy them with the strategic intentionality their competitors do.
This is not only a corporate governance failure. It reflects an innovation ecosystem that has long funded the creation of IP without requiring its protection. And even those that do deploy these legal tools are discovering that though essential, they are no longer sufficient.
Digital Extraction of IP
IP can now be extracted digitally – before a patent is filed, after an NDA is signed, through a supplier's compromised system or an executive's breached credentials. Legal rights establish what you own. Cybersecurity determines whether you can keep it. Neither works without the other, and neither comes first – they must be built together, from the moment an innovation is worth protecting. That is the coordination gap Canadian companies need to close.
Trade Secrets and Cybersecurity
In advanced manufacturing and across IP-intensive sectors, a significant shift is underway. Companies are increasingly choosing not to patent critical innovations – often because their advantage lies not in a discrete invention but in accumulated operational know-how that cannot be claimed in a patent without revealing more than it protects. So, they rely on trade secrets instead. But trade secrets are only as strong as the systems and controls protecting them. That dependency sits at the intersection of IP law and cybersecurity, and it is where Canadian companies are most exposed.
“In advanced manufacturing, cybersecurity measures are just as important as a solid IP framework. While traditional IP protection such as patents, trademarks and industrial designs play a critical role, much of the real value lies in digital know-how, processes and proprietary assets that must be secured against unauthorized access and theft,” said Jennifer Ponton, partner, IP lawyer and trademark agent at Borden Ladner Gervais LLP and Eric Charleston, partner and national co-leader, cybersecurity and privacy at the firm.
