A patent network that includes Canada’s federal and provincial governments has plunged into chaos, according to a report.

According to the report by the Canada Patent Foundation, which tracks Canadian patents, the network has fallen by nearly 20 per cent over the past five years.

The foundation’s chief executive, Daniel McQueen, said the network was “deteriorating” due to increased competition from overseas.

He said the government and private companies were not adequately preparing for the changes that have taken place in the last five years, including the expansion of the internet and digital innovation.

“There has been an increase in innovation and competition, but we have also seen a rise in protectionism, the weakening of intellectual property rights and the erosion of Canadian sovereignty,” he said.

Mr McQueen said the foundation was not surprised that there was a slowdown in innovation.

“It is true that there are things that have been left to the private sector to do,” he told CBC News.

It is a challenge that the Canadian patent system, in its current form, is unable to deal with, he said, and added that the federal government’s proposed changes to the patent system would be an “absolute disaster”.

“The only way we’re going to deal and deal with this is through a public-private partnership, so I think it is going to take some time,” Mr McQueen added.

The patent network consists of about 4,000 entities, including Canada’s provinces and territories.

The foundation said in its report that the network had been “unraveling” since the beginning of the millennium.

“Over the past decade, there has been a huge shift in the marketplace, and this has resulted in a sharp drop in the efficiency and availability of patent networks across Canada,” the report said.

“These declines have been largely driven by the fact that the marketplace has become more competitive, and the availability of products has increased, while the costs of filing have decreased.”

In the report, the foundation pointed to three key trends.

First, patent licensing fees increased by about $500 million over the last decade.

Second, patent applicants increasingly rely on online technology to compete with one another.

Third, there is a “growing need” for “situational information” and patent-related applications to be filed electronically.

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