Several programs are available in Canada that encourage the commercialization of intellectual property. The following provides a summary of a few of these programs.
- The Ontario Tax Exemption for Commercialization (OTEC) was developed with the aim of supporting innovation in Ontario by encouraging the commercialization of intellectual property developed by Canadian universities or colleges qualified under the program. The exemption offers a refund of corporate income tax and corporate minimum tax paid for a corporation's first 10 taxation years. Some of the objectives being: Encourage business start-ups to commercialize intellectual property; encourage entrepreneurs to work with and develop technology and research occurring in Canadian universities or colleges; and focusing on priority areas such as advanced health, bio-economy, clean energy, telecommunications, and computer and digital media.
- Your company was incorporated in Canada after March 24, 2008, and before March 25, 2012, and not as a result of amalgamation or merger.
Your company derived substantially all of its revenue from one or more of the following industries:
- advanced health technology,
- computer or digital technology production.
- Your company's sole activity was: Commercialization and sale of property including intellectual property or the licensing of eligible computer programs.
- The intellectual property commercialized by your company is covered by an issued or pending patent under the Patent Act in Canada or copyright in a computer program that constitutes a technological advancement.
- Eligible intellectual property commercialized must have been developed during the course of employment or study at a qualifying university or college.
- The intellectual property commercialized was disclosed to the qualified university or college in a manner in accordance with the university or college's disclosure policies and the intellectual property was solely owned, legally or beneficially, by: i) the qualified university or college where the intellectual property was developed; ii) students or employees of the university or college, or iii) your company.
The application process involves several steps including a preliminary non-binding determination by the Ministry of Economic Development and Innovation assessing whether the business is an eligible commercialization business, the property is eligible intellectual property, and the university or college is eligible under the program.
The request can be made using the approved form by the Minister of Research and Innovation anytime before the end of the corporation's first taxation year.
Upon review and if approved, the Ministry will provide the applicant with a Certificate of Eligibility.1
Other programs available for the commercialization of intellectual property include:
- Investing in Business Innovation, Federal Economic Development Agency for Southern Ontario in which your small business start-up could receive up to C$1 million (for no more than 33 1/3% of total eligible and supported project costs) in a repayable contribution to take on commercialization activities for new products including commercialization of intellectual property.2
- The Innovation Demonstration Fund (IDF) with a focus on emerging green technologies (including products and processes) in particular environmental, alternative energy, bio-products and hydrogen, to name a few.
The IDF supports Pilot Demonstration Projects leading to the commercialization of processes and/or products in Ontario. IDF will provide up to 50% of eligible costs for each approved Project, with a minimum of C$400,000 million to a maximum of C$4 million.
Eligible Ontario companies must demonstrate:
- The Project to be undertaken in Ontario will provide a competitive, environmental economical, social, etc., advantage or benefit for Ontario;
- The technology has been tested and is viable;
- Upon completion of the Project, commercialization will be in Ontario, as well as moving into the global market; and The technology is best in class leading to a globally competitive business and marketing opportunity.3
- The International Science and Technology Partnership Program (ISTPP) promotes international collaborative research and development with the goal of increasing the international competition and prosperity of Canada by building stronger science and technology relationships with Brazil, Israel, India andChina. The ISTPP issues Calls for Proposals for each country identified and companies are then asked to file a letter of interest (LOI). Subsequently, the ISTPP will review and answer the LOI prior to the next step. The ISTPP has had success with many programs.4
- The National Research Council of Canada's Industrial Research Assistance Program (IRAP) offers financial assistance to qualified small and medium-sized enterprises in Canada to help them undertake technology innovation. In order to qualify for IRAP funding, a firm must:
- Be a small- or medium-sized enterprise in Canada, incorporated and profit-oriented;
- Have 500 or less full-time equivalent employees;
- Have the objective to grow and generate profits through development and commercialization of innovative, technology-driven new or improved products, services or processes in Canada.5
- The Natural Science and Engineering Research Council ("NSERC") provides Idea to Innovation (I2I) grants. The I2I grants support college and university faculty members' technological research and development projects having transfer potential. Funding is provided through four defined phases and depends on the maturity of the technology or the involvement of an early-stage investment entity or an industrial partner. For more mature projects, I2I grants promote the transfer of technology originating from the university and college sector to a new or established Canadian company.6
- The Ontario Centres of Excellence (OCE), a provincially funded not for profit organization, offers a variety of fundingprograms related to the commercialization of intellectual property.
- Market Readiness Program - provides funding to researchers at universities, colleges and hospitals who are developing cutting edge solutions to common problems and industry needs. The program assists with the transfer of research to an existing Ontario-based company or the use of the research as a basis to found a new Ontario-based business venture. The Market Readiness Program provides between C$10,000 to C$200,000 in funding per project.7
- New Entrepreneur Program - provides expert assistance and financial support to pre-incorporated and early stage start-up companies. In order to qualify for the New Entrepreneur Program, new entrepreneurs must: Be able to work in Canada; have unique and proprietary offerings which will have a national or worldwide market; be enrolled in or have recently graduated from a Canadian college or university; and be prepared to work on the project full-time for a minimum of three months. Each entrepreneur involved in a project receives up to a C$6,000 loan (to a maximum of a C$18,000 loan per project) with favourable repayment terms. Where a successful project is a pre-incorporated start-up, the recipient of a loan must agree to transfer the technology into a new or existing start-up incorporated in Canada.8
- Commercialization Services Program - provides assistance and financial support in the form of a loan of up to C$100,000 to achieve a specific and meaningful intellectual property commercialization milestone. An applicant must match the amount of the loan and be a Canadian corporation with defensible intellectual property that is both unique and proprietary, which resulted directly from publicly funded research and a clearly identified addressable market. Applicants must have a business plan and must be able to provide matching costs. Loans are repayable under the terms of an agreed upon Memorandum of Understanding. Qualifying recipients are managed by a regional Director of Commercialization who provides advice and mentorship and connects them to other mentors and funding sources.9