Confidential information – customer lists, secret recipes, etc... and can include information about running the business where individual elements might not be confidential (e.g. franchising).
Industrial designs – shape of or pattern applied to a product.
Personality rights – rights in a person's image or voice etc.
What to do with IP
Create IP in your business through branding and innovation
Secure ownership of IP through contracts
Manage, administer and register your IP
Enforce rights in your IP against others
Monetize IP (sell, license, use as security for loans)
Avoid infringing others' IP / defend against allegations of infringement
Choosing a Name
Key legal factors to consider when choosing a name for your business, product or service…
approval of a business name or domain name does not give you the right to use it (a NUANS search or domain name search is not enough)
trademark law prevents use of confusingly similar TMs
good idea to investigate use of similar names in Canada |
Protect-ability / Register-ability:
must be distinctive of you as a trade source (e.g. PEPSI)
can be suggestive but not descriptive (or mis-descriptive) or laudatory of your business, product or service
Protecting Your Name
Trademark rights (i.e. rights to exclude others from using the same or a similar name) are acquired through consistent use of the name in commerce – "Use or lose".
Registering your name as a trademark is not necessary but can be very important, depending on the name and the nature of your business – application to register can be filed for "proposed use" before you launch.
Registration gives you the right to exclude others from using a similar name with similar products or services anywhere in Canada and is a powerful weapon in litigation (a "sword").
15 year term, renewable.
Registration is pro-active – prevents others from using or registering a similar name or suing you for infringement (a "shield").
Registration is required in some cases to prevent infringing social media use and infringing use of ad words
Budget $1400 to $2000 to register a trademark.
compare to many times that if you run into trouble
hire a qualified TM lawyer to help you
Register your name as a domain name and with various social media (e.g. @ThisIsMyTrademark on Twitter) as soon as possible – whether you register as a TM or not.
Important IP issues to think about when hiring employees, contractors or consultants:
Will they be creating IP for the business (e.g. websites, social media accounts, software, catalogues, inventions, product designs, etc.)?
Contractual terms may be needed to assign rights in the IP they create to you the employer – before they start (and sometimes after they create it).
Copyright law treats employees and independent contractors differently – like tax law, it looks to what they are not just what they are called.
How much do they need to know about the business to do their job?
Do not share more about how the business works than is necessary – especially with non-employees.
Use Non-Disclosure Agreements (NDAs) that clearly identify what is considered confidential.
Treat proprietary information as confidential: write it down, mark "Confidential", etc.
What IP are they bringing to the job?
Ensure that employee/contractor/consultant/partner has rights to use and disclose the IP that they bring to the job (e.g. photographs used by third party website developer, software codes used by programmer, customer database brought over by new employee or business partner etc.)... or that they - and not you - will be liable for infringement of any third party rights.
What IP are they leaving with?
Make sure that all IP remains with the company (e.g. corporation or partnership) when an employee leaves – including, especially, founders and partners.
IP should never be controlled by or registered to an individual (unless it's a sole proprietorship)
Websites & Social Media
Register your domain names with other gTLDs (.ca, .com, .biz, .net, etc.) and social networks – pro-active prevention against infringing use and cybersquatting.
Clear rights in all website content (photos, copy, layout) with the source (e.g. the developer, website consultant).
It is easy to find and hard to hide infringing content on the web (stock photos, text, personal images) and the consequences of infringement can be serious - $$$.
Doing Business With Others
Do not disclose more information about your business than is necessary.
Where necessary, use NDAs.
Do not let others use your trademark without expressed written terms giving you control over its use (otherwise, rights to enforce against others may be lost).
Ensure that they own rights in IP they bring to the deal or that you will not be liable if they infringe.
Clarify in writing who owns IP created in the relationship when the relationship is over.
Monetizing Your IP
IP can be sold, can be licensed to others and in some cases, can be used as security when borrowing money.
A small business's IP is often its most valuable asset (and a large portion of the value of the business as a whole).
Important to document and keep track of IP (including rights to use others' IP under license – e.g. software licenses) – can be done through a formal IP audit.
Investors, purchasers and lenders typically require a "paper trail" connecting all IP associated with the business to its owner – important to avoid surprises (e.g. copyright in the software is still owned by a contractor who left 5 years ago and now lives in Argentina).
Wherever there's a right there's a remedy.
The reality is that IP litigation is expensive.
The usual procedure:
letter denying infringement
rights owner commences a court action
an infringement action typically takes 2 to 3 years to trial
"default" or "summary" judgment if uncontested or no dispute
most actions settle early on or after discovery
sometimes rights owner brings a motion to get infringer to cease infringing in the meantime (must prove "irreparable harm" if infringement continues until trial)
Usually a game of chicken – show you're willing to go all the way to get a favourable settlement
Disclaimer: The information provided in this presentation is for educational use and is not intended to be used as legal advice.
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