Is it inevitable? No. Is it probable? Yes. If you are a Canadian inventor, and your work is of the highest importance, it will probably be commercialized in the United States. One way or another, this is the fate of many of the best Canadian inventions. Ask Henry Woodward, who sold US Patent 181,613 to Thomas Edison in 1874 -that was for the light bulb. Or talk to James Gosling, the Calgary tech geek who invented the Java programming language while working for Sun MicroSystems. Or even George Retzlaff, a CBC director in Toronto, who invented instant replay during a 1950 episode of Hockey Night in Canada and was actually prevented by the CBC from reusing it.
Every now and then, however, a Canadian inventor not only hangs on to an invention, but the intellectual property ends up in a Canadian listed public company. Perhaps without even being aware of it, millions of Canadians have had a financial stake in some of our greatest achievements. This is the criteria we put forward for this list. What are the greatest Canadian achievements that we all could have, in some way, owned a piece of in our RRSP’s (before the Canadian only ban was lifted on those savings plans)? Consolidated Edison (NYSE:ED), for example, is out. Even though The Company was founded on a Canadian invention, it’s strictly a US listing. Although Research in Motion has a NASDAQ listing, it’s also listed in Canada, so it’s in. Many Canadians have owned, and continue to own RIM in their RRSP’s. Now that we’re clear on the criteria, let’s get right to the list:
1. “Mr. Watson, come here. I want to see you.”
Although these famous words, spoken by Bell to his assistant Thomas Watson on March 10th, 1876 have secured their place in history, Watson was actually in an adjoining room when they were spoken. Later that summer, a less heralded -yet equally important- moment happened in Brantford, Ontario when voices could be heard clearly over a call placed over four miles away. This proved that the telephone could work over long distances. A decade later there were over 150,000 telephones in the United States and, with 1,497 shares, Alexander Graham Bell was the largest shareholder of The Bell Telephone Company. Bell Canada is now part of BCE Inc. and trades under the symbol BCE on the Toronto Stock Exchange.
2. The Dynamic Duo Join Forces
In 1989, Jim Balsillie graduated from Harvard with an MBA. He surprised some of his peers by taking a job with a small Kitchener tech firm called Sutherland Schultz. It was here his paths would cross with Mike Lazaridis, as Sutherland Schultz bought circuit boards from RIM. https://techwebpost.com/ After Lazaridis rebuffed take out attempts by Sutherland Schultz, Balsillie joined RIM as VP Finance. He invested $125,000 of his own money for a 33% stake in the fledgling company. It turned out to be a pretty good investment. Balsillie and Lazaridis would eventually become co-CEO’s and RIM would become one of the most successful and innovative companies in Canadian history, with revenues now near $15 billion.
3. Nortel Rises and Falls
It ended badly, very badly, for a staggering number of Canadians. At its peak, in 2000, Nortel had a market value of $350 billion. At one time, the stock represented 36% of the entire value of the Toronto Stock Exchange. It’s likely that no stock has ever been owned by more Canadians, either directly or through pension plans and mutual funds.
Out of nowhere, it seemed, cracks began to emerge. October 25, 2000, CEO John Roth warned, for the first time, that Nortel would not meet its sales targets. The stock fell from $96 to $71 that day. By 2002, half of the company’s 90,000 workers had been laid off. And then it got worse. Debt downgrades, missed reporting deadlines and financial restatements killed a meager rally in the stock. It spun out of control and never recovered. Nortel declared bankruptcy on January 14, 2009.
Now that we live in the post-Nortel world, what to make of this? It’s cold comfort to those who lost their jobs, homes, savings or all of the above, but some believe that Canada will continue to derive benefit from Nortel. In an editorial in the July 14th, 2009 Financial Post, Sue Spradley, North American head of Nokia Siemens Networks talked about Nortel’s legacy after Nokia Siemans had submitted a $650-million bid to buy certain Nortel assets. “Consider that over the years hundreds of companies have sprung from Nortel, generating immeasurable innovation and untold economic benefits for Canada.: she said. “Nortel’s labs were destinations for the brightest and best students that Canadian universities turned out. It was a magnet for the brightest and best from many of the world’s top universities as well. In fact, Nortel is largely responsible for the fact that Canada has one of the world’s most enviable telecommunications systems, and that it is a global incubator for the industry.”
At year end 2007, Nortel had approximately 3,650 US patents and approximately 1,650 patents in other countries. It is estimated that these patents could garner over a billion dollars in revenue. Some speculate that Research in Motion may be an aggressive bidder in this process; RIM Co-CEO Mike Lazaridis has called Nortel’s fourth generation LTE or Long Term Evolution technology a “national treasure.”. In fact, RIM today owns approximately 1,300 patents and nearly 10% of these cite Nortel patents. Click on the ad to learn more about Serenic (TSXV:SER)
4. Mike and Terry lose some Lawnmowers
Mitel. “Mike and Terry Electronics” or “Mike and Terry’s Lawnmowers”? While Michael Cowpland has shot down the latter explanation of the origin of the company’s name, the reasoning is based on an actual event. In 1973, Cowpland and Terry Matthews, who had met at Nortel forerunner Bell Northern Labs, intended to import and sell cordless electric lawnmowers. Only trouble was their first shipment was lost at sea. This must have been taken as some kind of sign to the now-legendary partners, because they immediately forgot about the lawnmower business and began to produce a telephony tone receiver product that was based on Cowpland’s Ph.D. thesis. By 1981, Mitel had reached the $100 million dollar annual revenue mark. In 1985 British Telecom acquired a controlling interest in Mitel, making Matthews a billionaire. Matthews then went on to form Newbridge Networks which was sold for more than 7 billion to Alcatel in 2000. Matthews, who emigrated to Canada in the 1960’s became the first billionaire in the history of Wales. Cowpland went on to found Corel which, at one point, was Canada’s largest tech company.
5. Roger That
In 1925, Edward (Ted) Rogers, Sr. invented the world’s first alternating current radio tube. This invention enabled radios to be powered by ordinary household electric current. This was a dramatic breakthrough in technology and it became the key factor in popularizing radio reception. Ted Sr. died young, at the age of 38. While his then five year old son didn’t turn out to be the inventor his father was, his business acumen commercialized his fathers invention to a greater degree than he could have imagined. Ted Rogers Jr. founded Rogers Radio Broadcasting Limited, which became the earliest proponent of the FM signal in North America. A couple years later, Roger’s CHFI-FM quickly became Canada’s most listened to FM radio station and also became the most popular and profitable FM radio station in Canada. Rogers’ interests in radio led him to cable television in the mid-1960s. In 2009, Rogers Communications (TSX:RCI.A) did nearly $12 billion in revenue.
6. Canada Lends an…Arm
If you were a taxpayer in Canada in the 1970’s and early 80’s you may have felt that the Canadarm was built to deliver a solid uppercut to your pocketbook. The Government of Canada invested $108 million in designing, building, and testing the first one. The program, which was carried out by The National Research Council of Canada, featured an industrial team that was lead by Spar Aerospace, which was ultimately acquired by McDonald Dettwiler (TSX:MCD). The project also included engineers from CAE Electronics (TSX:CAE), who built the display and control panel as well as the hand controllers located in the Shuttle aft flight deck. The Canadian taxpayer eventually shook off the effects of the Canadarm’s initial hit; the original investment resulted in nearly $700 million in export sales, including the sale and maintenance of 4 Canadarm systems to NASA, the sale of robotic components to Japan and Europe, the sale of simulators, and the development of robotic systems for the nuclear industry. It also helped stem the “brain-drain” establishing Canada as a world player in the fields of advanced manipulator systems and robotics.