28 Apr 2020

Q&A: Bhupinder Randhawa on Canada’s first tech hardware incubator

Bhupinder Randhawa is head of engineering and technology law and co-head of AI at Bereskin & Parr, which has become a founding partner of the Hardware Catalyst Initiative (HCI), Canada’s first incubator for tech hardware startups.

Bhupinder Randhawa: 'One consistent challenge for Canadian tech startups is that they find it much harder to raise funding and attract customers at home than in the US.'

How did you get into the law? 

I studied computer and electrical engineering at the University of Waterloo. After that I worked as an engineer at Canadian Pacific Railway and Alcatel Canada, where I developed real-time control systems for fully automated, driver-less rail transit systems. Law had been in the back of my mind since high school, and, frankly, I enjoyed school much more than working. So I went to law school at the University of Toronto, and learned that IP law, and patent law in particular, would allow me to combine my technology and law interests. I joined Bereskin & Parr as a summer student in 1996, eventually as a lawyer in 1999 and became a partner in 2005. 

What are your practice areas? 

My practice has a roughly even split between technology law and IP. On the tech side, I typically advise on technology transactions, such as technology development and licensing agreements, IP monetisation, and strategy relating to intellectual assets. On the IP side, my team prepares and prosecutes patent applications for Canadian clients to protect their technology around the world. We also serve myriad international clients for their Canadian patent and IP needs. I also undertake enforcement work, which largely relates to developing and implementing licensing programs, and can involve managing litigation that our clients are running in the US to protect their products, markets and profit margins. And what about your client base? My clients range from startups to large international companies. I very much enjoy seeing my clients grow, and growing the scope and complexity of the work that we do for them. Some of my clients have been with me since they were small companies 15 or 20 years, including some which have grown into worldwide leaders in their industries. I’ve learned about their technology, their competitors and their business strategies, allowing me to advise them at a level beyond the nuts and bolts of IP law and individual inventions. 

What is the genesis of the Hardware Catalyst Initiative (HCI)?

I got to know ventureLAB, the technology hub behind HCI, many years ago when I picked up the phone, called its chief executive and asked him how I could help with their mission to support the technology community. When I first started at Bereskin & Parr there was a very strong pipeline of work and I didn’t need to worry about business development. As a partner I was responsible for keeping myself busy, and during the 2008-2010 recession, the pipeline started to dry up. I built relationships with several innovation hubs. My relationship with ventureLAB has evolved and grown in the years since I started working with them. The HCI was born out of the need to address common challenges faced by Canadian hardware and silicon companies in raising capital, attracting and retaining talent, acquiring technology or tools and selling to global customers. Led by ventureLAB, the HCI team have been successful in obtaining $3.5m in funding from the Canadian government through the Federal Economic Development Agency for Southern Ontario, and more than $5.5m in resources and in-kind contributions from industry and corporate partners, including Bereskin & Parr. 

The conventional wisdom is that domestic investors and partners are more reluctant to take a risk with a new technology

What difference will it make? 

One consistent challenge for Canadian tech startups is that they find it much harder to raise funding and attract customers at home than in the US. The conventional wisdom is that domestic investors and partners are more reluctant to take a risk with a new technology or a new company, and that it is easier to make progress south of the border. For hardware companies, it’s even more difficult to get off the ground because of the cost the tools you need to build products and then test them so that they can be certified for sale to consumers. You could spend well into the six figures on equipment and many iterations of product testing just to reach a minimum viable product that is customer ready. The HCI has built a state-of- the-art lab with all the necessary specialist equipment to develop hardware products. It is a very impressive space, and as an engineer, I love being there. VentureLAB is already planning the next stage of the HCI which will focus on environmental testing, allowing HCI companies to test their products for real-life use and environmental certification. 

What help are you providing the startups? 

We have donated some money, but our primary contributions are time and mentoring, which we make available to HCI companies, as well as other companies working with ventureLAB, including: 

  • consultation to help them develop a strategic plan for their intellectual assets 

  • information about NDAs, employment issues, fundraising and the role of IP in that 

  • a review of their business plan and pitch deck

  • advice on how to handle confidential information and trade secrets 

  • advice on regulatory issues, particularly around marketing and advertising. 

Essentially, we sit down with the founders and advise them on how to build a moat of IP around their business, both in the short and long terms. We also look at how they can develop proprietary technology and IP that is suitable for monetisation. And we look at branding, including logos and company names. Often, by the time a company becomes very successful, its trademarks are as or even more valuable than its patents. I’ll be meeting the first cohort of startups in the next couple of weeks. Several of them are developing valuable IP now and need to consider how to protect it at the right point in their product development cycle. 

Do you take shares for fees? 

On very rare occasions we might look at that. But not very often, simply because we’re a law firm and we’re not really equipped to do the analysis. We always try to work out an arrangement with promising clients so that they can manage their legal fees, while still ensuring that they have strong IP rights. 

Are you optimistic about the future for tech startups in Canada?

Many successful tech companies have their roots in Canada. There is a natural brain drain to the US, but we have had clients move to the US and then move home. The environment in Canada is increasingly more startup friendly, and the HCI is a great example of that. 


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