Foreign incursion into Canada’s IP bar not all doom and gloom

A publicly traded Australian company now controls a third of patent and trademark agency work in Canada, but many in the intellectual property bar don’t see that as a bad thing.

Instead, they see it as an opportunity.

With its announcement last month that it was buying IP boutique Bereskin & Parr for $82.5 million, Australian-based IPH Limited became the largest IP company in Canada under its ROBIC banner in Quebec and Smart & Biggar brand in the rest of Canada.

Last year, its firms filed 33 per cent of patent applications in Canada. While that has some practitioners speculating about competition issues, others are eyeing the benefits and growth potential.

“We are definitely in a period of upheaval, and I think there are opportunities for smaller firms like us,” says Andrew Currier, co-founder and CEO of PCK IP.

Canada’s IP market now essentially has three levels: the IPH member firms, full-service operations like Gowling WLG, Norton Rose Fulbright, and Borden Ladner Gervais, and a slew of smaller shops like Currier’s, which he says are in a position to offer more personalized service and focus on building IP assets and strategies for Canadian companies.

With the disappearance of storied brands like Ridout & Maybee and now Bereskin & Parr, Currier also sees the chance for younger firms like his, which has about 20 lawyers and patent and trademark agents, to raise their profile and become top-of-mind in the market.

That’s exactly what Elizabeth Dipchand thought when she heard about IPH potentially gobbling up another Canadian firm. Her seven-lawyer firm, Dipchand LLP, had been looking to expand and broaden its patent practice. As IPH moved into the market and talent at those firms settled into the new system or decided it wasn’t for them, she knew there’d be opportunities to grow through strategic acquisitions.

Her longtime friend Louis-Pierre Gravelle was at Bereskin & Parr, and from the start was not keen on the IPH model, which he says is too commoditized and doesn’t appeal to lawyers with a more entrepreneurial focus. Dipchand says adding Gravelle to her team was “a great opportunity” that makes a “ton of sense” for the growing firm.

Gravelle also jumped at the chance to join Dipchand and be on the ground floor of creating a more robust patent practice.

“What gets me going in the morning is to be able to build these relationships, to be able to really understand what the business needs of a client are and advise them as to the best possible way to reach that business objective while leveraging intellectual property that's extremely valuable,” he says.

In the short term, Gravelle’s ready to hire new lawyers, patent professionals, clerks, and other support staff to start building up Dipchand’s patent practice.

Others who didn’t join IPH after the acquisitions include Gunars Gaikis, who is now at Norton Rose Fulbright; Ryan Evans, who joined Aird & Berlis; and Dino Clarizio, who, along with fellow practitioners Jason Markwell and Rebecca Crane, started a new firm, Markwell Clarizio, focusing strictly on IP litigation.

Change creates opportunities, Clarizio says. The inherent conflicts at firms the size of the IPH members and clients, particularly in the U.S., who may only want to deal with “independent” firms, open the door for growth at other IP shops, including his own.

Even though IP litigation in Canada is “quite slow” right now, he’s hoping “we’re at the bottom of the trough and it’s going to pick up overall.”

IPH, which is traded on the Australian Securities Exchange, doesn’t own the law firms but has acquired the patent agencies of Smart & Biggar, Ridout & Maybee, and now Bereskin, which folded into the Smart & Biggar name, and ROBIC in Quebec. Through the patent agency, IPH owns an interest in their law practices to comply with Canadian regulations on law firm ownership.

Because of that ownership structure, compensation and career potential can also present opportunities. Currier says small firms like his may be able to offer more attractive partnership paths and better work-life balance than either of the full-service firms, where the partnership track is long, or at the IPH members, which are publicly traded.

“I think it could be helpful for us in terms of tracking talent. Paradoxically, even though we're a smaller entity, we're not accountable to a certain dividend to passive shareholders. We are the only owners of the business.”

Dr Andrew Blattman, CEO and managing director of IPH, says they’ve reached “a natural limit” in this market.

“Now that we've established a strong presence in Canada, our priority will be on enhancing the performance of our recent acquisitions and ensuring we deliver maximum value to our clients and stakeholders,” he says.

IPH has more than 1,600 employees in Australia, Canada, China, Hong Kong SAR, Indonesia, Malaysia, New Zealand, Philippines, Singapore and Thailand.

Creating backend efficiencies is one of IPH’s goals in its target “secondary markets” — essentially where there is more incoming foreign IP work than domestic work — like Canada. In IPH’s annual report, released just before it acquired Bereskin & Parr, Blattman said its three Canadian acquisitions had “enhanced the IPH network effect” with more than 500 client referrals between its Canadian and Asia Pacific offices since its 2022 acquisition of Smart & Biggar.

“Inevitably, what's going to happen is they'll be looking for additional acquisitions in other countries to continue fuelling the growth of their revenues” rather than bringing on and nurturing more Canadian talent and clients, says Gravelle.

Even if the IPH member firms have the biggest piece of Canada’s patent and trademark pie and there are lots of people comfortable working in its controlled and predictable environment, he says there’s loads of room for Canadian IP professionals to build different kinds of practices at a different kind of firms.