Commercializing Inventions at the University of Toronto

Working Paper

October, 2020

Chelsea Tao and Mariana Valverde

Commercializing Inventions at the University of Toronto What is a university? In Canada, as elsewhere, it is a centre for research and teaching, supported in part by public funds. It is also an employer, a producer of images, a subject of rankings, a real estate owner, a generator of revenues, and a hub in global networks of value and aspiration. But how does a university work? What exactly does it do? What are the powers and pressures, the practices and networks that constitute contemporary university worlds?

An interdisciplinary team of faculty at the University of Toronto, we seek to discover the many worlds of our own institution, in collaboration with graduate and undergraduate students. We foreground the everyday experience of people who work or study in different corners of the institution, who live in its shadow, or respond to its public face.

A pilot phase 2019-2021 has been funded by the Social Science and Humanities Research Council of Canada (SSHRC) Insight Discovery Grant #430-2019-00054

For more information about the project please contact [email protected]

Visit our website at http://universityworlds.ca/

To cite this paper:

Tao, Chelsea and Mariana Valverde. (2020) “Commercializing Inventions at the University of Toronto”. Working Paper 4, Discovering University Worlds, University of Toronto.

Abstract

Universities all over the world have been pressured for several decades, and in turn have pressured their researchers, to help commercialize university inventions, mainly through setting up new corporations and/or selling intellectual property rights to existing corporations. This working paper traces the history of the University of Toronto’s (U of T) policies in regard to inventions and intellectual property, going back to the 1980s. The emergence of the MaRS ‘discovery district’ is recounted (although its financial and real estate connections with U of T are not sufficiently transparent to allow firm conclusions). Finally, we put U of T’s intellectual property policies in their larger context, concluding that while the university could do more to ensure that the financial benefits of commercially viable inventions are shared with the university and with the citizens that support it, in the end governments need to set legal rules minimizing the steady outflow of intellectual property created with public resources.

Contents

Abstract ...... 3

Introduction ...... 4

Post-Connaught Labs policies on university inventions: The University of Toronto Innovations Foundation ...... 5

The Manley Report ...... 6

A not so transparent partnership: a brief history of the MaRS’ relation to U of T .... 7

U of T inventions: who benefits? ...... 13

Conclusion ...... 15

Works Cited ...... 18

University Documents ...... 18

Other Sources ...... 19

Introduction

This working paper examines U of T’s policies and practices regarding the commercialization of inventions from the 1980s to today. After a summary of policy developments in the 1980s-90s, we present a brief history of the MaRS Discovery District, with which U of T has always had a close relationship. We then examine economic and legal dimensions of the university’s intellectual property regime concerning inventions. We come to the conclusion that although the university could do much more to ensure that the rewards – especially financial rewards – from inventions by U of T members benefit the university community, and the citizenry who support us and our research through government grants and other support, the fundamental problem lies in a national (and to some extent provincial too) policy vacuum. In the absence of regulatory policy (even the relatively weak policies the EU and some member states have developed), the market rules, which in the case of high-tech means that Silicon Valley rules.

This report, we believe, has importance beyond our university. The university’s experiences with discoveries and inventions have long been shaped by the larger heated debates about the relative roles of the private sector and the public sector. It is important to note that these debates are not unique to the neoliberal era. That U of T has played an important role historically in scientific innovation is well known, and is highlighted in campus historical plaques marking the discovery of insulin. But it is not so well known that U of T’s Connaught Laboratories, which saw many world-changing public health inventions from the 1920s to the 1970s, were sold by U of T to the federal government in 1972 – well before the word ‘neoliberalism’ had emerged – and was then slowly privatized in Ottawa, with the Mulroney government finishing the job in 19851.

1 One account of the discovery of insulin and the creation of the Connaught Laboratories is found in Linda McQuaig, The Sport and Prey of Capitalists: How the Rich are Stealing Canada’s Public Wealth (Toronto, Dundurn Press, 2019), pp. 126-144.

Post-Connaught Labs policies on university inventions: The University of Toronto Innovations Foundation

A Master’s thesis done at OISE in 2013 is the only source shedding light on the recent (that is, post-Connaught Labs) history of U of T policies and practices about the commercialization of inventions. It is a thorough case study of the University of Toronto Innovations Foundation (UTIF), launched in 1980 in response to federal pressure to strengthen university-industry linkages2. In its infancy, according to thesis author Kristjan Sigurdson, UTIF’s purpose was to help market university inventions, products, and processes to industry – rather than furthering the university’s own development of such inventions. The term that began to be used then for the university officials helping researchers commercialize inventions, ‘technology transfer’, is quite telling: it indicates the university has no intention to itself commercialize inventions, and may not even want to continue exercising intellectual property rights. Despite initially high expectations for UTIF to duplicate the successes of the ‘technology transfer’ university officials at Stanford and MIT, the Foundation faced several challenges. Insiders interviewed by Sigurdson suggested that it lacked the scale, expertise, and the industry linkages to meet its goals3.

By the end of the 1980s, only a few of its inventions provided royalties and licensing fees worth more than the cost of commercialization4. After a disappointing first decade, UTIF underwent major organizational changes to take on new staff, separate from UofT, and develop a new system for vetting inventions.

A new Inventions Policy was established in 1990 with improved financial incentives for inventors who chose to retain ownership of the invention. (This is still reflected in the current policy.) Inventors who chose to develop and commercialize inventions themselves would receive 75% of revenue while 25% went to UofT; inventors who chose to use UTIF would receive 25% of revenue

2 Kristjan Sigurdson, “The rise and fall of the University of Toronto’s Innovations Foundation”, Master’s thesis, OISE, University of Toronto, 2013, p. 36.

3 Sigurdson op. cit., p. 40

4 Sigurdson op. cit., p. 55

while UTIF and UofT receive 50% and 25% respectively5. These policies resulted in marked improvements in rates of invention disclosures.

In 1998, UTIF underwent another restructuring, led by businessman Joseph Rotman. While it continued its licensing efforts, UTIF also recruited staff with experience in supporting start-up companies, and collaborated with the Rotman School of Management in doing so6. By 2002/2003, UTIF seemed to be making a successful turnaround. The 2003 Annual Report recorded $4.5 million in total revenue, including $493,622 in royalties and licensing fees and $1,941,774 in sale of commercialization rights and capital gains, as well as $30 million in seed venture funds raised.

The Manley Report

Though these successes sparked optimistic hopes, UTIF would not survive. In June 2004, U of T’s Governing Council asked four panel members to review the University of Toronto Innovations Foundation (UTIF). The panel, chaired by former Liberal federal cabinet minister and Governing Council member John Manley, found “a widespread feeling that UTIF is not performing optimally” and that UTIF “is not giving the university the stature it should have (and is increasingly expected to have) as a superb research organization”7. The report recommended that UofT should dismantle the UTIF and create a new entity that combined the activities of its Technology Transfer Office with other resources for commercialization, and that the new office be jointly owned and funded between UofT and its affiliated research hospitals. It was stressed that the new office should be physically and administratively outside of the university.

The Manley report foreshadows later developments in UofT intellectual property policies and ‘partnership’ arrangements: it claimed that the university should not see the partnerships in primarily financial terms, as sources of revenue either for the university or for the taxpayers that support it8, but rather focus on maximizing

5 It is not clear whether the revenue to be shared between the inventor and the university was simply that obtained when intellectual property is first sold. That initial price can be far smaller than the royalty and license revenue earned over time as inventions come into wider use.

6 Sigurdson op. cit. p. 80.

7 Sigurdson op. cit. p. 5.

8 The numerous guides and explainers on the website of the Vice-President for Research and Innovation concerning inventions emphasize the licensing of university inventions to third parties,

invention disclosures9. To the Manley panel members, the MaRS project, then in its infancy, provided the perfect opportunity for UofT “to refocus its commercialization efforts and to work closely with the affiliated hospitals and the city’s financial and business communities”10.

The advice of the Manley report was followed, and U of T dismantled the UTIF in 2006. The closure of UTIF created space for a new body to develop. The new entity, MaRS Innovation, “would be allowed to play host to the inventions generated by the university” which was, according to Sigurdson’s study, “no doubt deemed important to the survival of the fledgling technology incubation hub”11. One insider interviewed by Sigurdson stated that the decision to outsource UTIF’s functions to MaRS indicated that “the university was betting the farm, and still is as far as I understand, on MaRS Innovation” (92). (TodayU ofT has its own technology transfer office, it should be noted).

A not so transparent partnership: a brief history of the MaRS’ relation to U of T

At over 1.5 million square feet, the MaRS Discovery District is considered one of the world’s largest urban innovation hubs, supporting over 150 organizations and 6000 employees12. MaRS, originally an acronym for “Medical and Related Sciences”, opened in 2005 as a charitable non-profit with the core mandate to foster and build Ontario’s knowledge economy by supporting commercialization and developing the next generation of hi-tech Canadian and frequently inventors are encouraged to set up new private corporations or work with existing corporations. There is a marked semantic slippage between ‘inventors’ and ‘entrepreneurs’. See materials on https://www.utoronto.ca/news/tags/innovations-partnerships- office

9 The U of T submission to the province’s expert panel on intellectual property in Ontario, which reported in February 2020, states: “U of T’s IP policy is similar to that found at Stanford University, which requires that inventors using university resources disclose potentially patentable works to the University. However, we extend additional flexibility in ownership options to our inventors and entrepreneurs such that our policy can be considered ‘Inventor’s Choice.’” (https://d3n8a8pro7vhmx.cloudfront.net/uot/pages/34/attachments/original/1562334837/Com mercializationSubmissionUofT.pdf?1562334837)

10 Sigurdson op. cit. p. 87.

11 Sigurdson op. cit. p. 89.

12 Tamtik p. 9.

companies13. The initial concept was for an organization that provides incubation and advisory services, links young local businesses to industry, and connects entrepreneurs to venture capital was put forward as a great way to make Toronto, Ontario and Canada more globally competitive, but evidence of success is difficult to come by. The MaRS probably has helped to limit the ‘brain drain’ of U of T-trained inventors, especially in Artificial Intelligence, to Silicon Valley; but knowledgeable observers note that while researchers may be physically in Toronto, a large outflow of ‘knowledge assets’ and wealth, mainly in the direction of Silicon Valley, has been observed14.

In 2002, Conservative Premier Ernie Eves committed $20 million in funding for MaRS as part of the $51 million Biotechnology Strategy, intended to “enhance commercialization of new research discoveries and new company creation” and “support the development of commercialization centres, research parks, and innovation networks across Ontario”15. The funding was meant to be matched by investments by private donors and the federal government.

Upon taking office in 2003, Liberal premier Dalton McGuinty named himself the inaugural Minister of the Ministry of Research and Innovation. He quickly moved to invest $13 million to establish Ontario’s Regional Innovation Networks (RINs) - regional, private sector-driven non-profit networks aiming to support and accelerate local technology startups. By the time MaRS opened its doors in 2005, the McGuinty government had invested over $50.5 million into the MaRS project, including $29 million for the construction of the MaRS Centre, $15 million for infrastructure development costs, and $6.5 million to support MaRS’ commercialization programs.

13 The CEO of the MaRS from 2005 to 2017 was Dr. Ilse Treuernicht, wife of Dr. David Naylor, who became president of U of T in 2005 after having been Dean of medical sciences.

14 This is not a specific U of T phenomenon. Canada is number 3 in the world in numbers of AI researchers, but the number of Canadian AI patents is declining (Zane Schwartz, “Canada falling behind global race for artificial intelligence patents” The Logic Dec. 10, 2018). A noted intellectual property lawyer quoted in The Logic story explained that Canadian government funds given for AI research end up in the pockets of foreign-owned companies that purchase the invention and take out the patents. See also Joe Castaldo, “Why does Canada give away its best ideas in AI?” Macleans 13 April 2017.

15 Hepburn, Nicola and David Wolfe, 2015, “Commercialization and technology transfer policies and intellectual property regimes in Canada”, p. 134.

From 2008 to 2014, the Liberal Government of Ontario spent approximately $392 million on MaRS’ Phase 2 development - a move that Ontario’s Auditor General Bonnie Lysyk regarded as a “bailout of a private sector development” rather than an investment.16 The funds included a $216 million loan by Infrastructure Ontario guaranteed by the Ministry of Research and Innovation, which the Auditor General named “one of the most significant high-risk loans...which the government had made eligible through a regulatory amendment”17 The report noted that “whether the benefits realized from this transaction will ultimately outweigh the risks and costs assumed remains to be seen”18.

A few years later, the Auditor General’s 2019 report noted that MaRS received $19.3 million in funding through the Ministry of Economic Development, Job Creation, and Trade, but failed to disclose the recipients to which they provide grants19.

Critical reports, in the press as well as by the provincial auditor general, thus suggest that the MaRS Discovery District drifted away from the mission to commercialize research carried out at the university and affiliated hospitals in a way that benefits the Ontario and Canadian public interest; its most visible success in recent years seems to be as a landlord for well-established multinational companies.

The Discovery District’s current tenants include Facebook, Autodesk, Johnson & Johnson, Paypal, IBM, CIBC, and Merck. These companies pay market rental rates, but share labs and spaces with smaller businesses and start-ups. While MaRS’ proponents argue the mix of large transnationals and local start-ups encourages large companies to serve as “great mentors and motivators”20, critics claim that this potentially leads to young local start-ups being forced to compete with huge multinational companies for the same talent pool and

16 Auditor General of Ontario, Annual Report 2015, p. 222. (These reports cover the previous year’s government spending.)

17 Ibid. p. 9.

18 Ibid., p. 233.

19 Auditor General of Ontario, Annual Report for 2019, p. 630.

20 Claire Brownell, “After nine years, the MaRS Phase 2 tower is finally full and open for business.” Financial Post 20 June 2016.

assets. Recently an article in the Ottawa newspaper Hill Times stated the following:

Selling out to foreign multinationals seems to be encouraged by one of Canada’s leading incubator/accelerator centres for high-tech companies, MaRS, in Toronto. In its start-up toolkit it extols the benefits of linking up with US venture funds since these are a quick pathway to eventual sale. In fact it boasts, of 183 Canadian tech start-ups sold over a five-year period, nearly 70 percent were acquired by US corporations, including six by Google and three by Twitter.21

In September of 2018, MaRS announced that it had partnered with the University of Toronto and developer Menkes to lease 24,000 square feet of space in Waterfront Toronto’s 400,000 square-foot Waterfront Innovation Centre (WIC) now under construction and scheduled to open in 2021. While UofT President Meric Gertler claimed that the partnership is “a winning combination” that brings together “MaRS’s world-class suite of innovation programming and expert support for entrepreneurship with...U of T’s globally renowned researchers and students”22, critics, some of which have been cited above, have called into question the effectiveness of this relationship. However, beyond providing a ‘bridge’ between university talent and the commercial world, it is not widely known that the MaRS is also a financial investment for U of T.

UofT first entered into a financial relationship with MaRS Discovery District in 2000- 2001, with a $5 million contribution to secure the land at the corner of University and College Street (land belonging to the Toronto General Hospital that was reportedly being eyed by developers). The Planning and Budget Committee of Governing Council meeting of January 23rd, 2001 heard Vice-President for Research Heather Munroe-Blum’s presentation of the MaRS Discovery District proposal23. The proposal, which came forward outside of UofT’s usual budget planning cycle due to MaRS’ need to quickly secure the land, asked UofT “to contribute $5 million towards the purchase of the land for the planned MaRS

21 David Crane, “Canada needs better ways to transform early stage companies into future global champions” Hill Times, Sept. 14, 2020, p. 1.

22 Jennifer Robinson, “U of T ‘plants flag’ on Toronto’s new waterfront innovation corridor”, U of T News online 25 September 2018.

23 Report Number 67 of the Planning and Budget Committee, Jan. 23 2001 (no longer available on the website of Governing Council, available only on request).

Discovery District, [and] participate in the management of the MaRS not-for- profit corporation, which would own the Discovery District, by appointing 2 members to its Board of Directors, and build on its previous entrepreneurial tech- transfer activities, along with those of the teaching hospitals”. Members of the committee noted that the MaRS project would bring several key benefits. Firstly, the MaRS vision of an innovation cluster was recognized as “highly complementary to U of T’s academic mission and long-range plans” by providing increased opportunities for UofT researchers and enhancing U of T’s efforts to recruit and retain faculty. Secondly, MaRS “would provide researchers with increased interaction with individuals, organizations, businesses that support research, education, and training”, and create student internships, research opportunities, and employment opportunities for graduates. Lastly, the contribution would demonstrate a commitment to achieving “public benefits” by ensuring that the property would be used for public interest rather than private development. Members stated that the MaRS project’s focus on commercialization of university research would be a significant improvement over U of T’s system at the time, which often required researchers to relinquish a large proportion of ownership of their start-up companies. The Planning and Budget Committee, driven by hopes that MaRS would serve as “an innovation engine for the GTA, Ontario, and Canada”, unanimously supported the proposal and recommended that U of T contribute $5 million to MaRS, forwarding the proposal to the Academic and Business Boards for consideration.

U of T’s Academic Board echoed the Planning and Budget Committee’s discussion24, adding that “U of T’s contribution towards MaRS would demonstrate to government and taxpayers a commitment to research and to tech transfer that would provide payback for their investment in research support”. However, while the Board supported the proposal, there was notable debate about the risk of corporate influence. One member of Academic Board expressed concerns that the MaRS proposal, which involved the University borrowing money to invest in a private corporate venture, “would set a bad precedent”. That member stated that “academia should stand on its own; research was the hallmark of the University”, and that the proposal would impede the University’s progress since commercial pressure makes it difficult to conduct basic scientific research. To counteract the critique, another member noted that the proposed funding would come from a bank rather than public funds, and the loan would be repaid with revenue from royalties and sale of

24 In Academic Board Report number 104, dated February 15th, 2001.

equity (although of course there could be no guarantee that the university’s $5m debt would be paid from MaRS-related revenues).

On February 19th, 2001, Business Board agreed that MaRS “would provide many benefits to the University, including those of a financial nature”25. Governing Council officially supported the proposal at its meeting of March 8th, 2001 but, as with the Academic Board, the Governing Council meeting was not without debate. An unnamed member, while not opposed to the MaRS project, expressed concern that “the project would further commercialize research, incentivizing faculty to concentrate on research that would enrich them rather than research that would advance knowledge and serve humanity”. The member suggested that MaRS “should facilitate publication as well as commercialization”, and that the University “should concentrate on attracting faculty who were good teachers as well as good researchers”. In response, Vice-President Heather Munroe-Blum stated that the university continued to “believe strongly in the combination of teaching and research”, and that the MaRS project would “assist in the dissemination of the products of research through commercialization and through other processes”26.

Thus, while there was optimism and overall support for the MaRS proposal, concerns surrounding institutional integrity, corporate influence, and research accessibility were shared and discussed, at least within Academic Board. But the official view became that MaRS’ physical proximity and its commitment to research applications and technology transfer presented a pathway for UofT to align its academic mission with the goal, widely held by universities around the world, that novel ‘partnerships’ with existing for-profit corporations and with university-originated start-ups are the appropriate mechanism to bring inventions to the broader world.

On October 23rd, 2014, Governing Council approved a proposal to fit out the 16th floor of the MaRS West Tower with medical and engineering laboratories, citing space and lab quality concerns raised by representatives from the Faculties of Medicine, Engineering, Dentistry and others. Shortly after, in June 2015, plans to acquire and fit out the 15th and 16th floors of the MaRS West Tower

25 Business Board Report #110, February 19, 2001, pg. 2.

26 Minutes of the Governing Council. 8 Mar. 2001, pg 12.

were also approved by the Governing Council. By the end of 2015, U of T acquired four floors of MaRS’ West Tower amounting to a 20% equity stake in the MaRS Phase 2 Investment Trust. U of T’s VP Operations Scott Mabury described the need for space as “immediate” and justified the investment in the four floors of the new MaRS tower due to lack of time to “build a whole new building”27. One floor of the UofT-owned space is currently occupied by JLABS, a start-up incubation space owned by mega-firm Johnson & Johnson; the artificial intelligence-oriented Vector Institute is also a tenant currently subleasing from U of T, though it is scheduled to move across the street to the building now under construction (the “Schwartz-Reisman Innovation Centre”)28.

Let us now return to the legal and financial arrangements concerning inventions and their commercialization.

U of T inventions: who benefits?

The annual university “Facts and Figures” document is useful because it has information about the previous five years. The 2018 ‘Facts and Figures’ shows that the number of inventions (and recall all inventions by U of T employees have to be reported, regardless of who commercializes them) declined somewhat, from over 430 per year in 2013-15 to between 385 and 390 per year in 2014-17. The gross revenue from inventions – the only figure given – fluctuates, but does seem to be on a downward trend: $40m in 2013-14, $10m in 2-14-15, $8m in 2015-16 and $15m in 2016-17.

However, the available figures are not useful if one wants to find out whether the university or the governments that support it benefit financially, since the

27 Prof. Mabury, “MaRS West Tower Announcement speaking notes” 3 September 2015, available on the website of the Vice-President for Operations. (We are providing the dates of the various governance meetings not because they are crucial but because searching by date under the relevant Governing Council committee or administration websites is, we have found, the best way to locate documents. Searching by keyword is often not productive.)

28 We asked Prof. Mabury’s office for information on university revenues from renting or leasing the high-end space at the MaRS West Tower but this was not forthcoming; we were told that leases are private. Perhaps the aggregate amount of rent collected at the MaRS is found in the university’s difficult-to-read financial statements. As part of the broader ‘discovering university worlds’ project, the rental income issue has been shifted over to a different mini-report, on capital projects and real estate, that is still in progress (anticipated release date November or December 2020).

figure lumps together the university’s income with the revenues paid to inventors and other institutions, as well as to new IP-based start-up companies. The report “Commercializing inventions” submitted to the provincial expert panel on intellectual property, on its part, has many examples of commercial ventures involving IP29, and some figures are given for the examples, but there is no detailed statement of revenues to the university.

The apparent lack of concern for sharing the wealth created out of U of T-based inventions shown by the official statements canvassed for this report (not all of which have been cited) is not a unique U of T phenomenon. The report of the expert panel on university technology transfer offices presented to the Ontario government in February of 2020 notes that Canadian academic institutions are filing fewer patents now than in previous years, and that universities do not seem to be reaping financial benefits from types of intellectual property other than patents, such as ‘trade secrets’ (important in the computing world)30. The leader of that expert panel, Jim Balsillie (former co-CEO of BlackBerry) has also recently made presentations to the Commons Standing Committee on Industry, Science and Technology that paint a truly dire picture, in which patent and other IP income decreases within Canada even as Canada produces more and more, in the AI and machine learning fields especially, which not coincidentally are among U of T’s most prestigious fields of research.

A major player in the ‘commercializing university inventions’ space, today, is the Vector Institute – which was created as a separate non-profit corporation, renting space at the MaRS (or more specifically renting space in one of U of T’s floors in the MaRS). The Vector Institute relies heavily on U of T faculty and researchers (and also many from Waterloo) who remain active as faculty or graduate students, but may well be receiving separate compensation that would not be publicly disclosed in the provincial ‘sunshine list’ because it is not part of their regular university salary. This seems to confirm the concerns that some Academic Board members expressed nearly two decades ago, cited

29 One example, highlighted in a box, is “Blue J Legal”, a company set up by three U of T law professors that uses AI to speed up legal research. The report notes that the university contributed incubation space, “seed investment” (unquantified) and mentorship during the first 18 months of its operation -- but we are not told if U of T currently receives any financial benefits from this venture.

30 See Report: Intellectual property in Ontario’s innovation ecosystem: expert panel on intellectual property, Report to the Government of Ontario, February 2020, p. 16.

above. It is public knowledge that several of the Vector’s faculty and researchers hold high-level positions in U.S.-based corporations while remaining members of the university. One notable example is Vector Institute co-founder and U of T associate professor of engineering Dr. Raquel Urtasun, who heads Uber’s Advanced Technologies Group (ATG) and conducts research on self- driving transportation. A handful of Vector Institute faculty members hold positions in Google while cross-appointed as Vector Institute researchers and UofT professors, simultaneously.

It would not be helpful, or fair, to impugn the motives of colleagues who might be receiving benefits from the MaRS or the Vector. If these affiliated institutions are able to provide, either themselves or through their corporate connections, the latest software, powerful computers, and world-class collections of data sets (data sets being the crucial inputs for today’s machine-learning research), researchers will gravitate to them rather than remaining a rank-and-file professor in a regular university department. However, the intellectual property generated by university researchers operating under the umbrella of external bodies, whether corporate or non-profit like the Vector, is not shared with the university. This is not unique. The policy concerning affiliated institutions, in general terms, has been that if an invention is generated at a hospital using hospital labs and resources then the invention will be governed by the hospital’s IP policy, not the university’s. AI inventions are not as easily locatable as a medical invention taking place in a physical lab, and in addition innovations in AI are often published immediately rather than commercialized, even from within Google. However, many questions remain about whether the university ought to exercise more vigilance over the activities of faculty who are engaged in types of research through affiliated entities that may generate large financial benefits either to the researchers or the corporations that buy the rights and take out the patents.

Conclusion

While most university leaders in the years since the Connaught Labs were sold off largely shared the goal of accelerating the development of knowledge- based businesses in Canada, the university’s practices in regard to ‘partnerships’ with entities that do not follow university policies and practices could benefit from some scrutiny. Indeed, the constantly used language of “partnership” is misleading; it suggests that there are two separate entities that decide to build a relationship. But the links between UofT and the MaRS (and the Vector) are of a different nature. We saw earlier that the university was heavily involved in

promoting the MaRS, to some extent for its own purposes (and took out a $5m loan to help birth it). Today, many U of T employees, especially professors, are actually in both entities at the same time, and they may in addition set up their own for-profit corporations to undertake commercially profitable research. It is not possible from publicly available sources and from the information that a few (very few) insiders were willing to share with us, to reveal the inner workings of the so-called partnerships. The university is not always very transparent31; but private corporations (whether non-profits like the Vector or the for-profit ones set up by professors, graduate students and graduates) are by definition non- transparent to the outside world: that legal feature of private corporations in general makes their ‘partnerships’ with ‘the university’ non-transparent. Despite the limited reach of our researcher gaze, however, we tentatively conclude that neither the university nor the province’s taxpayers have shared in the huge profits that have accrued in recent years to companies such as Uber and Google, which have definitely benefited from U of T’s talent.

In the university’s defense, however, one needs to acknowledge that neither Canada nor Ontario have instituted publicly minded policies on the governance of intellectual property whose creation has used public funds (e.g. in the form of graduate student funding or the salaries of professors, or in the form of outright grants). Arguably it should be governments that set IP rules, since governments are by far the largest contributors to Canada’s tech sector, both directly by way of ‘investments’ and indirectly through supporting universities. At present universities have to compete with one another for ‘talent’ – with the ‘talent’ playing a huge role in the global rankings that in turn drive student recruitment and influence research grants – and, if hiring and retaining eminent scientists and engineers is an institutional priority, then letting individual inventors choose how to commercialize inventions makes sense.

An innovation expert at UofT’s Munk School stated, in a media interview, that in regard to artificial intelligence, in which UofT has a stellar reputation, the problem is that the patents and the wealth end up outside of the country: “We’re waking up after our own crown jewels have been stolen”, Prof. Dan Breznitz stated32. But after all it is governments that have to set rules preventing

31 One example: in recent years many Governing Council documents have been assigned document names (computer file names) that are a string of apparently random letters and numbers. This does not mean the document is unavailable or kept secret, but it makes research into the university’s governance process extremely cumbersome.

32 Joe Castaldo, “Why does Canada give away its best ideas in AI?” Macleans 13 April 2017.

the theft of jewels of all kinds, tangible or intangible. The repeated failure of bodies such as the Canadian Council of Innovators to have the federal Liberals write policies that favour the Canadian economy and regulate Silicon Valley’s ‘big tech’ suggests that while the university may be contributing to the problem of crown-jewel theft, it would not be feasible for it, even if the political will were there, to rewrite the rules.

Works Cited

University Documents

“Capital Project: Faculty of Applied Science and Engineering and Faculty of Medicine Translational Biology and Engineering Laboratories in the MaRS Centre Phase 2 Tower.” The Governing Council. 23 Oct. 2014, https://governingcouncil.utoronto.ca/sites/default/files/import-files/a1030- 4ai10714.pdf

“Capital Project: Report of the Project Planning Committee for the Faculty of Medicine Biomedical Laboratories in the MaRS Centre Phase 2 Tower – Project Scope and Sources of Funding.” The Governing Council. 9 June 2015, https://governingcouncil.utoronto.ca/sites/default/files/import- files/a0625-4ai11260.pd

“Facts and Figures 2018.” The Office of Planning & Budget, 2018. https://data.utoronto.ca/wp-content/uploads/2019/06/Facts-Figures- 2018_final.pdf.

Mabury, Scott. “MaRS West Tower Announcement Speaking Notes.” 3 Sep. 2015, https://vporep.utoronto.ca/wp-content/uploads/2015/09/MaRS- announcement-September-3-2015-Scott-Mabury-speaking-notes.pdf.

Manley, John. Bressler, Bernard. Ku, Katharine. Smith, Susan. “Report of the Manley Panel on Commercialization and Technology Transfer at the University of Toronto.” 4 Nov. 2004.

“Minutes of the Governing Council”. The Governing Council, 8 Mar. 2001, https://governingcouncil.utoronto.ca/sites/default/files/ogc/reports/r0308 -2000-2001gc.pdf.

“Minutes of the Meeting of Governing Council of April 4, 2017.” The Governing Council, 4 Apr. 2017, https://governingcouncil.utoronto.ca/sites/default/files/ogc/reports/r0404 -2016-2017gc.pdf.

“Raquel Urtasun.” Vector Institute, https://vectorinstitute.ai/team/raquel- urtasun/.

“Report Number 67 of the Planning and Budget Committee.” The University of Toronto Planning and Budget Committee. 23 Jan. 2001,

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