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Putting your interests first

Intellectual Property Issues Every New Business Should Consider

Have you recently come up with a brilliant business idea that you think may be the next big thing? If so, before you go around telling everyone about your great idea, you may want to consider the following intellectual property issues.

Are you the sole owner of the idea and intellectual property or are there any co-ownership issues?

If you developed or worked on the business idea while employed by another company, you need to determine whether the idea or product you developed or intend to develop belongs to you or to the company. Typically, if you are in an employee-employer relationship, any intellectual property that you develop during the course of your employment belongs to your employer. This is particularly true if the business idea was developed during work hours, used work resources or is in the same field or area of business that your employer services. Each situation is fact dependent but if any of the above apply to you, you should consider the potential IP issues that may apply to you. If on the other hand, you developed the product or idea outside of work and engaged the assistance of a friend or independent contractor for part of the work, the part developed by your friend or independent contractor may belong to them instead of you, unless you have a signed agreement stating otherwise. If identified early, co-ownership issues can usually be resolved amicably and with minimal costs. However, if you simply wait until your idea or product takes off, things can get messy, as the co-owner may become reluctant to sign over his or her interest to you at a reasonable price or sometimes at all.

What is the difference between copyright and a patent?

Generally speaking, copyright protects the actual product from being replicated but not the idea. Patents on the other hand protect the functionality of the product, thus preventing others from creating another product with similar functionality. If you are considering obtaining a patent for your product, it is extremely important that you refrain from disclosing your product or idea to others unless they have signed a confidentiality agreement. Failure to do so can prevent you from obtaining a patent on the grounds that your idea is no longer novel. While Canada and the US allow for a one-year grace period, the rest of the world generally does not. Patents only apply in the country in which you have obtained the patent. Therefore, if you obtain a patent in Canada, it protects your idea or product within Canada. It does not however prevent someone else from creating and selling a similar product in the US or any other country for that matter. That said, if an individual or company from another country develops a similar product and then attempts to sell it in Canada, you would be protected by your Canadian patent. Obtaining patent approval can take 3 to 5 years; however, once obtained it can be applied retroactively to the date the application was filed.

What is a trademark?

Unlike patents, trademarks are developed with use. Therefore, the more you use them, the stronger they will be. If you don’t use your trademark for a period of three years, you can risk losing it even if it has been registered. Additionally, if you don’t police people’s use of your trademark you may also risk losing it. Just like patents, you have to register your trademark in each jurisdiction you want to enforce it in. If you don’t register your trademark, you can still sue another entity for using your name, slogan or symbol under the common law remedy known as passing off. However, this is much more challenging to prove as you must demonstrate that you have developed a reputation through the use of your name, logo or slogan, from which the other party is attempting to profit.

It is easy to get excited over a business idea and to want to share it with everyone around you to see if it is worth pursuing from a commercial standpoint. However, in order to protect your own interests, before sharing your ideas with others you should have them sign a confidentiality agreement. All great ideas start out small. Protect them early before they become big.


The material contained in this article/video/blog is for your general information only and is not intended to be, nor should it be taken as legal advice.

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