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Research and development in Canadian industry: Intellectual property, 2014

Released: 2017-04-19

Payments and receipts for intellectual property by research and development companies in Canada

In 2014, businesses in Canada with current or previous research and development (R&D) expenditures received $2.3 billion in payments for their intellectual property (IP) or for the provision of technological services to other businesses. More than half of these purchases from R&D-active firms ($1.2 billion) were made by companies located outside of Canada, while purchases by companies located in Canada accounted for the remaining $1.1 billion.

Newly created knowledge can be formally protected through registered instruments such as patents, trademarks and copyrights, all well-known forms of intellectual property. These formal IP instruments can be used to generate revenues through sales and licensing.

Other intellectual property protections include trade secrets and plant breeders' rights. Using technological services such as technical assistance, industrial processes and know-how allows companies to trade informal knowledge. Software, original and packaged, and databases with useful lives exceeding one year, are included in intellectual property commercial transactions due to the knowledge they embody.

Data from the redesigned Annual Survey of Research and Development in Canadian Industry provide detail on the extent to which R&D-active businesses in Canada are making or receiving payments for IP.

Affiliates account for most IP receipts from companies located outside of Canada

Of the nearly $1.2 billion that R&D active firms in Canada received from companies located outside of Canada, the majority of these purchases ($709 million) were made by parent, affiliated or subsidiary companies. Non-affiliated companies located outside of Canada accounted for the remaining $476 million in sales.

Non-affiliated companies account for the majority of IP receipts within Canada

In contrast, most of the payments that R&D-active firms received from companies located in Canada ($850 million) were from non-affiliated companies, with the remaining $281 million coming from parents, affiliates or subsidiaries.

Chart 1  Chart 1: Payments received by research and development-active companies in Canada for intellectual property, outside of Canada and in Canada by affiliation of payment recipient, 2014
Payments received by research and development-active companies in Canada for intellectual property, outside of Canada and in Canada by affiliation of payment recipient, 2014

Canada's information and communications technology sector accounts for the largest share of IP receipts

Companies in the information and communications technology (ICT) sector engage in activities including computer systems design, computer hardware manufacturing, computer gaming software development and sales, and Internet publishing. The ICT sector accounted for 62% ($1.4 billion) of the total payments for IP received by R&D-active companies in Canada.

Foreign affiliates are an important source for IP and technology acquisition

R&D-active companies in Canada spent $1.3 billion on the acquisition of intellectual property and technological services from other companies, the majority of which were purchased from companies located outside of Canada ($817 million). Most of these payments were made to parents, affiliates or subsidiaries ($727 million) of R&D-active companies located outside of Canada. By comparison, parents, affiliates or subsidiaries accounted for under one-half of the total IP purchases that R&D-active companies made within Canada ($159 million). The majority of payments within Canada ($287 million) were made to other companies.

Chart 2  Chart 2: Payments made by research and development-active companies in Canada for intellectual property, outside of Canada and in Canada by affiliation of purchaser, 2014
Payments made by research and development-active companies in Canada for intellectual property, outside of Canada and in Canada by affiliation of purchaser, 2014

  Note to readers

These estimates of payments made and received for intellectual property and technology assistance were derived from data collected from companies within the sample of the Annual Survey of Research and Development in Canadian Industry. Although the data come from a sample survey, the responses are self-representing and are not weighted for these particular variables given the volatile nature of intellectual property-related activities. Therefore, the estimates represent intellectual property commercial transactions only for the companies in Canada with research and development activities that responded to the survey.

The estimates do not represent all trade in intellectual property rights or informal technology assistance services in Canada.

Research and development-active companies are companies within the Annual Survey of Research and Development in Canadian Industry sample that currently or previously funded or performed research and development.

Survey redesign

Several aspects of the Annual Survey of Research and Development in Canadian Industry have been redesigned, including concepts, methodology, the collection method and the data processing system. Users should, therefore, exercise caution when comparing 2014 data with historical datasets. For more information on survey content and methodology changes, consult Definitions, data sources and methods. Go to The Integrated Business Statistics Program in the Behind the data feature of our website to learn more about data production.

Starting in reference year 2014, the reference period changed from the fiscal year ending in the calendar year (reference year 2013) to the fiscal year ending within the fiscal period from April 1, 2014, to March 31, 2015 (reference year 2014).

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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