The Globe and Mail - 02.11.2019

B8| REPORTONBUSINESS OTHEGLOBEANDMAIL | SATURDAY, NOVEMBER 2, 2019

Waterfront Toronto’s renegotiat-
ed terms withSidewalk Labsfor
a tech-first community on the
shores of Lake Ontario include
better opportunities for Cana-
dians to prosper from innova-
tions developed there, but leave
many unanswered questions, in-
tellectual-property experts say.
The tripartite government
agency’s board voted unani-
mously on Thursday to remain
partnered with Google affiliate
Sidewalk to develop a 12-acre
“smart city” called Quayside on
the eastern downtown water-
front. The vote came four months
after Sidewalk asked to help plan
and implement technology on a
site 16 times as large. Its June pro-
posal also contained intellectual-
property (IP) terms for Cana-
dians that many IP and patent ex-

perts said were unfair to Cana-

dian taxpayers and businesses.

From the project’s beginning,

much of the tension has centred

on how much prosperity Cana-

dians should be entitled to for let-

ting the Alphabet Inc. subsidiary

play in their backyard. With five

months of deliberations left be-

fore a final Waterfront board vote

to go forward with the project,

the details around how those is-

sues will be handled need to be

worked out.

Data collected from sensors

deployed in Quayside could re-

veal patterns of city living that

could be used to build further

technologies to be sold the world

over. And the value from much of

today’s tech comes from its un-

derlying patents, which can be-

come immensely profitable

through licensing.

Thursday’s decision puts Wa-

terfront in much greater control

of how Sidewalk’s Quayside inno-

vations could be monetized in

the public interest, while giving

Canadians an upper hand, ac-

cording to IP experts.

The new deal says Sidewalk

would share a to-be-determined

percentage of revenues from

technologies it pilots in the To-

ronto community, as opposed to

10 per cent of profits, as it pro-

posed in June. And the agree-

ment includes an expanded “pat-

ent pledge” that would grant

Canadians access to Sidewalk

patents registered globally, in-

stead of just those registered in

Canada, giving them the chance

to build upon Sidewalk innova-

tions without fear of infringe-

ment claims.

“This is much more a public-

interest based model of intellec-

tual-property generation and

protection,” said Myra Tawfik, a

professor of IP commercializa-

tion and strategy at the Universi-

ty of Windsor.

Jim Hinton, patent lawyer and

principal at Own Innovation, an

IP strategy firm in Kitchener,

Ont., also said the changes were a

step in the right direction: “If

they get the IP right, they can get

the innovation right.”

Natalie Giroux, innovation-

strategy business lead with Otta-

wa’s Stratford Managers Corp.,

said that updates such as the pat-

ent pledge were an improvement

on previous terms, but that many

details were vague, including

whether software based on a

server elsewhere would be eligi-

ble for Waterfront to licence from

Sidewalk under certain site-spe-

cific agreements.

Law firm Norton Rose Ful-

bright Canada’s head of innova-

tion, Anthony de Fazekas, called

Thursday’s proposals “a more

balanced approach.” He said he

liked the new revenue-sharing

model, which could give tax-

payers a greater income stream

from Sidewalk’s technologies,

but was hoping for more details

about how Canadian companies

would stand to benefit if they

jointly developed technology

with Sidewalk.

Kristina Verner, Waterfront’s

vice-president of innovation, told

The Globe that Sidewalk’s June

proposals left many ambiguities

for the public agency to grapple

with.

Much of Sidewalk’s data-gov-

ernance plans were blown up in

the subsequent four months of

negotiations after Waterfront

said they fell short.

With the renewed talks came a

broad reconsideration of how

Canadians could benefit from all

that data, especially when major

critics made data usage and inno-

vation key talking points in op-

posing the project.

Some details remain undeter-

mined, including the percentage

of tech revenue the public can

share in, and for how long. But

Ms. Verner said that as a whole,

Waterfront is moving closer to its

goals – “to create an opportunity

for Canadian companies to be-

come global leaders and take

products to scale.”

But in the next five months of

negotiations, she expects IP con-

versations to be the “most in-

tense.” That’s in part, Ms. Verner

said, because Sidewalk parent Al-

phabet has a massive library of

patents and interest in growing

it; sharing future IP could mean

giving up some control.

Asked about Sidewalk’s role in

the negotiations, spokesperson

Keerthana Rang said in an e-mail

that the company was pleased

with the results, and recognized

“the wisdom in having existing,

trustedgovernment entities and

regulators take on this critical

work.”

NewSidewalkdealstrikesbetterbalance,expertssay

Revisedtermssaidto

putWaterfrontin

greatercontrolofhow

Quaysideinnovations

couldbemonetized

inthepublicinterest

JOSH O’KANE
TECHNOLOGYREPORTER

Fromtheproject’s

beginning,muchofthe

tensionhascentredon

howmuchprosperity

Canadiansshouldbe

entitledtoforlettingthe

AlphabetInc.subsidiary

playintheirbackyard.

Mr. Prichard, 70, is a lawyer and
former university president who
has served as BMO’s chair since
2012 and was instrumental in
choosing Mr. White.
“George’s distinguished record
as a public company chief exec-
utive and reputation as a strate-
gic leader committed to innova-
tion, growth and good govern-
ance make him the ideal Chair to
take the board forward,” Mr. Pri-
chard said in a statement.
Mr. Cope’s nomination was
unanimous, according to a state-
ment from Christine Edwards,
who chairs thegovernance and
nominating committee of BMO’s
board.
The bank is in the midst of a
plan to improve its efficiency
while expanding the reach of its
U.S. bank, BMO Harris Bank, be-
yond its traditional Midwest
stronghold in a climate of trade
tensions and economic uncer-
tainty. And, like most banks,
BMO is spending heavily on new
technology as daily banking goes
increasing digital and artificial
intelligence promises to reshape
work forces.
“I am fully behind BMO’s
strong management team and its
plans to deliver on the bank’s
strategic priorities,” Mr. Cope

said in a statement.

Neither Mr. Cope nor Mr. Pri-

chard were available for inter-

views.

Mr. Cope took charge of BCE at

a time when the legacy tele-

phone operator was facing a

steep decline in its primary busi-

ness. Shortly afterward, a deal to

take the company private fell

through, but he continued with a

turnaround plan that saw a ma-

jor restructuring of the manage-

ment ranks, an overhaul of mar-

keting and new investments in

its landline and wireless net-

works.

He also led BCE through a se-

ries of acquisitions, including

major deals to acquire Astral

Media, CTV and Manitoba Tele-

com Services.

Mr. Cope joined wireless star-

tup Clearnet in the 1980s, shortly

after graduating from the Univer-

sity of Western Ontario. He

helped take the company public

and sold it to Telus Corp. for $6-

billion in 2000.

When he announced his re-

tirement from BCE in June, mak-

ing way for Mirko Bibic to take

over, he said he planned to stay

involved in commercial and

charitable communities.

BANK ON MONTREAL (BMO)

CLOsE: $97.93, uP 43¢

BMO:Cope’snominationtoboard-chairrolewasunanimous,officialsays

FROM B1

As chief executive of BCE, George Cope – seen in 2017 – oversaw a turnaround plan that involved a major

overhaul of management, changes in its marketing unit, and new investments in landline and wireless

networks. He is set to begin his new role as BMO board chair on March 31.JusTINTANG/THECANADIANPrEss

The price is a bitter pill for share-

holders of Pengrowth, whose

stock was worth 71 cents a share

when the company, best known

for the Lindbergh heavy oil pro-

ject in northeastern Alberta, be-

gan its formal sales process.

The largest shareholder, hold-

ing 28 per cent, is mining and

energy financier Seymour Schul-

ich.

The stock tumbled 75 per cent

to 5 cents on the Toronto Stock

Exchange after the announce-

ment of the deal.

Pengrowth urged its sharehol-

ders to accept, even though it is

worth far less than the stock

price prior to Friday, saying it has

no other access to capital.

All of the company’s directors

and executives have agreed to

support the deal, the company

said.

Chief executive Pete Sametz

blamed the company’s dearth of

options on “lacklustre oil pricing

and increased political and regu-

latory uncertainty.”

Indeed, the deal caps a dismal

week for Alberta’s energy sector,

which has lamented a lack of ac-

cess to capital for development,

citing chronic delays in adding

export pipeline capacity to new

markets.

On Thursday, Encana Corp.

said it was changing its name to

Ovintiv Inc. and moving its

headquarters to the United

States to access more investment

from U.S. index funds.

Encana CEO Doug Suttles em-

phasized that the move was not

in reaction to political uncertain-

ty in Canada, and that no jobs

would be cut.

But conservative politicians,

led by Alberta Premier Jason

Kenney, blamed perceived anti-

energy-industry policies by Otta-

wa for the move.

For Pengrowth, Cona’s pur-

chase would close a difficult

chapter that saw its value dwin-

dle as the company completed

the Lindbergh project just before

oil prices began a years-long

downturn in 2014.

Pengrowth was once one of

the largest and most prominent

energy trusts, with naming rights

to Calgary’s Saddledome, home

of the NHL’s Flames.

In 2011, it enjoyed a market

capitalization of $4-billion. But it

struggled after its transition to a

regular corporation when Otta-

wa essentially put a stop to in-

come trusts. Since then, it has

shed several properties to focus

on its main operations – Lind-

bergh heavy oil and natural gas

in northeastern British Colum-

bia.

In late 2018, the company

sought new financing in the

high-yield debt market, but was

unsuccessful in securing any,

leading it to seek buyers.

Mr. Schulich, who previously

asserted Pengrowth was worth

far more than the market was va-

luing it, declined to comment on

the deal on Friday.

Waterous founder and former

investment banker Adam Water-

ous said he would wait until Pen-

growth shareholders vote before

commenting.

Cona is entitled to a break fee

of $45-million if the deal falls

through or if Pengrowth agrees

to a higher offer.

Shareholders are scheduled to

vote on the transaction on Dec.

18.

PENGROWTH ENERGY (PGF)

CLOsE: 5¢, DOWN 15¢

Pengrowth:Companywasonce

oneofthelargestenergytrusts

FROM B1

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