Intellectual Property Protection in Canada
If you’re a creative, or you hire creative employees or contractors, your business is probably generating intellectual property (IP). If you ever sell your business, IP can make up a significant part of your valuation – regardless of your company’s size or industry. To protect your own interests, your should always handle your IP with care.
What is Intellectual Property?
Intellectual Property is any legal right to an idea, invention, or creation in industrial, scientific, and artistic fields. IP law covers everything from colours to symbols, names, images, designs, prototypes, and written documents. You might not be aware of all the IP assets created by your business; let’s run through an example.
Imagine yourself as a small business owner who just developed the newest and potentially hottest piece of at-home workout equipment (like the Shake Weight, but way more hip). To develop your bright idea, you hire a team of engineers and industrial designers to blueprint the product and code the software – after all it talks to you, tracks your blood pressure, sugar levels, and heart rate, then orders your post workout meal from Skip the Dishes. While there’s no question that the invention is novel and patentable, what’s less obvious is that the custom designs and software that make up the product are also pieces of IP.
Overall, protecting your intellectual property helps maintain your business’ competitive interests. This article covers the five basic categories of intellectual property protection in Canada: copyrights, patents, trade secrets, trade marks, and industrial designs.
First up is copy right protection. A copyright usually protects works of art, music, theatre, and literature from being copied, performed, or broadcast without the creator’s permission.
Copyright also includes written documentation and software. When a piece of work is copyright protected, it essentially means that you have the right to copy it and distribute it how you please. As a copyright holder, you get to specify when, where, how, and to whom you want to sell or license your work.
Copyright automatically applies to all original content as it satisfies the conditions of the Copyright Act. That means the creator does not have to the register their work to get copyright protection. However, an owner can register their copyright and get a certificate from the Canadian Intellectual Property Office. A copyright certificate is a helpful document if you ever try to enforce proprietary rights as evidence in court. Like most areas of IP, policing and monitoring is the responsibility of the copyright owner.
In Canada, copyright protection lasts for 50 years after the IP creator’s death. Afterwards, works become part of the public domain, meaning anyone can use them. While this protection holds true over most works, there are some exceptions.
Patents apply to newly developed technologies and improvements to products or processes – think of it as a reward for ingenuity. Patents offer a time-limited, legally-protected, and exclusive right to make, use, or sell an invention.
In Canada, patents last for 20 years from the date of filing. The first person to file a patent application is entitled to patent protection. Make sure nobody else beats you to it by filing a patent as quickly as possible after completing your invention.
To be eligible for patent protection, your invention must be:
- New: The first in the world;
- Useful: Functional and operative; and
- Inventive: Showing ingenuity that’s not obvious to someone of average skill who works in the field of your invention.
Trade secrets include any valuable business information that derives its value from its secrecy. If you’ve designed original products, created the perfect recipe, or have a gold mine of customer data, these are considered trade secrets and can be incredibly valuable to your business.
One of the most famous trade secrets is the Coca Cola formula—a well-guarded mystery for over 100 years. Coca Cola understands the business value of their formula very well and goes to extremes to keep it a secret.
In Canada, there is no formal intellectual property process for protecting trade secrets. To protect and benefit from a trade secret, a business must:
- Obtain business value from the secret;
- Keep the business information a secret; and
- Take all possible measures to ensure that the business information remains a secret.
If the information remains a secret, trade secret protection can potentially last forever. Once the secret is out, the business value is usually lost, which ends the trade secret protection.
There are several ways to keep your valuable business information a secret:
- Non-disclosure or confidentiality agreements: When disclosing your business information to anyone, have them sign a non-disclosure agreement.
- Confidentiality clauses: Include confidentiality clauses in employment agreements.
- Encryption: Encrypt computer hard drives holding valuable business information.
- Password protection: Use passwords to digitally secure business information.
- Lock and Key: Use a safe to physically secure business information.
A trademark is a combination of letters, words, sounds or designs used to distinguish one company’s goods or services from other companies. Trademarks are uniquely important; over time, your trademark represents not only the goods and services you offer, but also your company’s reputation and brand value.
By registering your trademark in Canada, you gain legal protection against the misuse of your brand and get exclusive rights to the brand for 15 years. Afterwards, you can renew the term.
There are three types of trademarks:
- Ordinary marks are made up of words, sounds, and designs that distinguish the goods or services. For example, suppose you start a courier business named Giddy-up; if you meet the legal requirements, you could register “Giddy-up” as a trademark for the service that you offer.
- Certification marks can be licensed to individuals or companies to show that certain goods or services meet a defined standard. For example, the Woolmark design, owned by Woolmark Americas Ltd., is used on most of the brand’s apparel;
- Distinguishing guises refer either to the shape of goods and their containers, or methods of wrapping or packaging goods that demonstrate they were made by a specific individual or firm. For example, if you manufacture butterfly-shaped candy, you could register the shape as a distinguishing guise.
Industrial designs refer to aesthetic product features like the shape of a car hood, the pattern of a knitted sweater, or the angle of a curved monitor. Such distinctive and eye-catching features give products a competitive edge in the marketplace.
If you register an industrial design in Canada, you gain exclusive, legally enforceable rights over the design for up to 10 years. During this time, you can sell your rights or license others to commercially use your design.
To be eligible for registration, designs must be completely original and cannot closely resemble any other designs. Like other IP legislation in Canada, the Industrial Design Act protects owners and helps people share what they know in an orderly way.
Mind Your IP
As a small business owner, it’s important that you recognize and protect the intellectual property in your company to avoid jeopardizing your business interests. If you value your intellectual property, implementing the right precautions can help you retain ownership of your creations.