Small Businesses and Intellectual Property
Small businesses, and all businesses, should be aware of the law surrounding trademarks, patents, copyrights, and trade secrets. Specifically, they should be aware of the acts that govern these areas of the law and what can and cannot be registered under these acts. As well, they should be aware of the benefits to registering. Many businesses face issues with unregistered trademarks, copyrights, patents, or trade secrets and this article aims to provide information to help alleviate these issues before they arise.
Trademarks
Trademarks in Canada are governed by the Trademarks Act. A registered trademark is a way of protecting a business’ image. Registering a trademark gives the business legal title to said image. Common business assets that are trademarked are business names, brand names, logos, slogans, and domain names.
A trademark is a sign used by a business to distinguish their goods of service from those of others. An ordinary trademark includes words, designs, textures, moving images, etc. A trade name is the name of a business. A trade name can be registered as a trademark under the Trademarks Act only if it is also used to identify goods or services. Therefore, if the name of the company is different from the name people know the business by, it would not be a trademark. However, if the name of the company and the name people know the business by are the same, the business can apply to register the trade name as a trademark.
A common question people have is, “do I need to register a trademark?”. When a trademark is registered, the business gets the sole right to use the trademark across Canada for 10 years and the trademark can be renewed every 10 years after that. However, you do not have to register your trademark necessarily, although it is highly recommended. If you do not register your trademark, by using the trademark for a certain length of time, you may have rights under common law. However, if there is a dispute that arises with an unregistered trademark, there could be a long and expensive court proceeding to determine who has the right to use it. Therefore, it is recommended to register trademarks.
Under the Trademark Act, there are trademarks that are unregistrable. Some of these include, names, including surnames, deceptive misdescriptive marks, places of origin, words in other languages, descriptive marks, and trademarks that are identical, or likely to be mistake for, prohibited marks.
The trademark application can be found here. This information as obtained from the Government of Canada's "Trademarks guide". For more information, please visit their site or contact the Business Law Clinic.
Patents
Patents are governed by the Patent Act in Canada. A patent gives an inventor the right to stop others from making, using or selling the invention from the day on which the patent is granted for a maximum of 20 years. The first applicant to file a patent application is entitled to obtain the patent. Therefore, an inventor should file their application for a patent upon completing the invention to ensure they receive the patent. An invention is eligible for a patent if it the invention is new, useful, and inventive. Further, the invention must also be a product, a composition, a machine, a process, or an improvement on any of these.
The patents application can be found here. This information as obtained from the Government of Canada's webpage about patents. For more information, please visit their site or contact the Business Law Clinic.
Copyright
In Canada, copyright is governed by the Copyright Act. Copyright gives the sole right to produce or reproduce a work. Copyright applies to all original literary, dramatic, musical, and artistic works that meet the conditions set out in the Copyright Act. These categories include books, pamphlets, computer programs, movies, plays, scripts, paintings, drawings, and songs. The information on your website, information on your products or services, and articles or podcasts can also be protected by copyright.
It is recommended to register for copyright, as the certificate of registration is evidence that the copyright exists and who owns said copyright. Copyright lasts for the life of the authors and for 70 years following the death of the authors. Some exceptions to this include Crown copyright, which applies to government publications, and joint authorship (where the copyright lasts until 70 years after the last author dies).
The copyright application can be found here. This information as obtained from the Government of Canada's "A guide to copyright". For more information, please visit their site or contact the Business Law Clinic.
Distinguishing Trademarks, Patents and Copyright
A trademark may be words, sounds, colours, scents, or modes of packages that distinguish the good or service of one business from another. Patents cover a new and useful invention or novel improvement to an existing invention. A copyright protects literary, artistic, dramatic or musical works and other subject matter know as a performer’s performance.
This information as obtained from the Government of Canada's webpage "Patent, copyright, trademark - Do you have these business assets?" fFr more information, please visit their site or contact the Business Law Clinic.
Trade Secrets
Surprisingly, there is no governing Act in Canada for trade secrets. The law around trade secrets has developed as a criminal offence under the Canadian Criminal Code and through litigation in the common law. The Criminal Code s 391(5) defines a trade secret as ‘any information that has economic value from not being generally known, that is not generally known in the trade or business that may use or uses that information, and reasonable efforts have been taken to maintain its secrecy under the circumstances.’ The common law may also offer protection for trade secrets, or information if it is secret, has a commercial value, and “reasonable measures” were taken to keep this information secret.
Information that would fall into this category may include:
1. Keeping information vital for a patent or industrial design secret before the application for the patent or industrial design is complete
2. Instead of pursuing the long and costly patent process, trade secrets can be relied on by businesses or inventors to protect their work. Protect an invention through means other than patent protection
3. Trade secrets can help protect other valuable information that does not fall under formal Intellectual Property rights
The third point of other valuable information is where the courts can be used to assist businesses if there is a breach or misuse of their trade secret information. If the information is secret, it can be protected, but when its secrecy is revealed, either the criminal law or civil law may provide some relief.
Section 391(1) of the Criminal Code creates an offence for obtaining, communicating or making available a trade secret “by deceit, falsehood or other fraudulent means,” and knowing that that this is an offence under the Criminal Code. This includes whether the trade secret was obtained by reverse engineering or through “independent development.”
Through common law, an owner of a trade secret who has faced loss due to the can seek damages. The leading case is Cadbury Schweppes (1999). The courts consider the following factors in their determination:
· the measures taken to maintain secrecy
· the value of the information
· the cost in money or time of creating or developing the information
· the ease with which the information could be acquired or developed by others independently
· the degree to which the owner regards and treats the information as confidential
· the degree to which the recipient regards and treats the information as confidential
· whether the recipient ought to have known that the information was confidential
· whether misuse of the information resulted in detriment to the owner
However, given the expense of litigation, the decisions on trade secret damages usually involve large corporations.
What can you do?
The Canadian Intellectual Property Office recommends storing trade secret information in the following ways:
· When you disclose business information to others, asking them to sign a non-disclosure or confidentiality agreement
· Ensuring confidentiality clauses are contained within employee agreements
· Using passwords or encryption methods to store and access sensitive information
· Physically locking secret information in a safe
Keeping secret information secret can be challenging in this digital age where information is more accessible but also more vulnerable. Developing protocols around storing and accessing sensitive information is important for your business.
For More Information....
Contact the UVic Business Law Clinic at (250) 472 -4522 or blc@uvic.ca for further information. Law students provide legal information to BLC clients during the fall and spring semesters.
Disclaimer
Please note that nothing in this post constitutes legal advice. This article is for information purposes only. If you are looking for legal advice, please contact a lawyer.