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Strategic IP: When Defence and Private Sector Dance Together


Recent Canadian defence policy dictates the importance of forming strategic partnerships between National Defence and the private sector (i.e., industry) to find ways and technology to respond to the growing threat landscape. This policy is not only supported by Canada’s investment in NATO’s Innovation Fund (see our blog), but also the Department of National Defence (DND) and Canadian Armed Forces’ (CAF) AI strategy, which promotes partnership. This partnership trend offers immense potential – the private sector's agility, ingenuity, and resources can lead to groundbreaking solutions that benefit citizens. But, like any good dance, this partnership requires careful choreography and project management to navigate the inherent challenges.


The Need for Caution: Confidentiality and Security


When governments collaborate with private companies, the sharing of information is essential.  Sometimes, this involves sensitive data, even classified information and secrets. The crux of the challenge lies in balancing a collaborative approach, vital for innovation, with the protection of confidential government information. Security breaches or data leaks could compromise national security or jeopardize strategic interests. Governments need to establish stringent cybersecurity protocols, clear data-sharing guidelines, vet their private sector partners carefully, and manage information security.


The Intellectual Property Tango & Proper Selection of an IP Strategy


Who owns the brilliant ideas born out of these collaborations? That's a million-dollar question. The private sector, understandably, wants to protect its investments and secure the rights to commercialize solutions.  The government, on the other hand, prioritizes solutions that benefit its citizens widely.  A tango of negotiations must take place, and there needs to be a clear distinction between “Background IP"  (what each party brings to the collaboration) and "Foreground IP" (the new inventions created) is a must. This provides the foundation for determining ownership and licensing arrangements, as well as IP strategy to be adopted, namely keep the new technology a trade secret, or file IP rights thereon, such as patents, including secret ones, copyright, etc. This is where meticulous contracts with predefined IP clauses come in, preventing future disputes and ensuring both parties are incentivized to bring their best game.


Mitigating the Challenges: Steps to Smooth the Dance Floor


The good news is, these challenges aren't insurmountable. Here's how both the government and private sector can navigate them successfully:


  • Understanding intellectual property notions, such as: (i) the requirements to maintain trade-secret protections; (ii) the effect of copyright and open-source licenses, and (iii) the foundation of the patent system which “is based on a “bargain”: the inventor is granted exclusive rights in a new and useful invention for a limited period in exchange for disclosure of the invention so that society can benefit from this knowledge.  Sufficiency of disclosure lies at the very heart of the patent system, so adequate disclosure in the specification is a precondition for the granting of a patent”;


  • Strong Foundations: Well-written contracts are indispensable.  They should outline IP ownership, security protocols, confidentiality (especially when classified, sensitive or confidential information changes hands) and conflict resolution mechanisms – a legal safety net for both sides; and


  • Building trust between the defence and private sector (or defence contractors). 


The Enduring Value of Partnership


Despite these challenges, the potential benefits of government-private sector innovation partnerships are immense. By being aware of the potential pitfalls, and with foresight and careful project management (i.e., planning), together they can truly innovate for the greater good.  After all, sometimes the most challenging dances are the ones worth mastering. 


Contact us for more information. 

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