Canada is missing out on a multi-billion-dollar opportunity in the global technology standards game, despite being a hotbed of innovation. At the recent Bridge Summit in San Francisco, hosted by the Via Licensing Alliance, no Canadian representatives were present to negotiate the licensing of patents for emerging technologies like AI data centers and video codecs. This absence highlights a broader issue: Canada often invents technologies that the world adopts but then pays a toll to use them, rather than reaping the benefits.
The invisible rulebook of the modern economy, technical standards, determines whose technology ends up in billions of devices. For example, about 24,000 patent families were essential to 4G wireless technology, and this number surged to over 60,000 by 2023 for 5G. The top 10 patent holders own about three-quarters of these essential patents, translating into massive licensing revenues. Qualcomm Inc. earned roughly $8 billion last year from its licensing arm, while Nokia Corp. and Ericsson brought in $2.4 billion and $2.1 billion, respectively.
Canada’s struggle is not due to a lack of ideas but a failure to turn foundational inventions into standards that pay. For instance, researchers at the Université de Sherbrooke developed ACELP, a speech compression technology now built into 17 telecom standards and over 95% of the world’s mobile phones. However, Canada sold the toll booths for these patents to American firms. Similarly, Mississauga’s Certicom pioneered elliptic curve cryptography, but its patents were sold to an Irish firm, which now holds more granted 5G patent families than BlackBerry itself.
To compete, Canada needs to improve intellectual property literacy among founders, recognize that standards are a critical moat, and ensure that its innovations do not walk out the door. Without a seat at the table, Canada risks being on the menu in the next economy.