Intellectual Property and Startups
Many small businesses are based around an idea, invention, process, or improvement, the value of which is often then bedrock of the company. The legal field of intellectual property deals with protecting ideas and inventions, but it is a complex and unintuitive area even for lawyers (some in the profession make entire careers in only part of IP law). This post may help you find the category that suits your work and give hints about next steps.
Trademarks protect names and logos. Trademarks are about protecting your public image, not your creative property. Trademarking “Xerox” prevents another business from using that name but not from using their photocopying technology. If you are attached to a name
Trademarks are federally registered under the Trade-marks Act. This affords national protection of names and logos once registration is complete. There is a $330 application fee. It is illegal to register a trademark consisting of certain prohibited features such as deceptive marks, words in other languages, or a similarity to official trademarks used by the Canadian government or the UN. An application may also be refused if it is confusingly similar to a previously filed trademark. You can do a search yourself in the Canadian Trademarks Database to look for similar trademarks before applying. Once filed, the Canadian Intellectual Property Office will do its own search of the database for registered or pending trademarks that are similar, examine the application for compliance with the Trademarks Act and Regulations, and then publish the trademark publicly for two months. During that time, anyone can file an objection to your trademark, at which point you enter in the formal opposition process. If the application is approved and no one opposes, the trademark will be registered. Trademarks must also be renewed periodically.
A Note on Symbols
Symbols like ® or ™ are commonly used to denote trademarks, but this is not a legal right and is not granted by the Canadian Intellectual Property Office. This is simply a business practice that has developed and does not necessarily equate with actual ownership of a registered trademark. There is also nothing stopping you from using the ™ symbol without actually registering the trademark, though unregistered trademarks are more difficult to enforce if legal challenges arise. It is recommended that you seek the advice of a trademark agent before proceeding with obtaining a trademark. The Canadian Intellectual Property Office keeps a list of registered trademark agents.
This is a form of intellectual property protection that arises automatically when you use secret information in your business. The problem in your case is that you are selling the information itself, as opposed to a by-product of that information (trade secrets are often the process by which a product is created). Also, if a competitor were to independently come up with the same process, trade secret law would not protect you.
Trade secrets are different from patents or trademarks in that they are not registrable. Technically, you do not “own” a trade secret, but rather you have rights to it that can be protected in contract. The most relevant protections for many businesses are non-disclosure and confidentiality agreements, which allow you to take legal action against others who disclose the information. The rights granted depend largely on the wording of the contract.
Patents are the best-known and strongest form of IP protection in Canada. Generally speaking, patents are available for physical things like inventions, improvements, and manufacturing processes. There is also precedent for patenting a business process and other potential forms exist. Whether a particular thing can be patented is often only known to experts in the field with substantial experience and evaluated on a case-by-case basis. The CIPO has a database of patent agents.
It is worth noting that applying for a patent is known to be an expensive process. The fees are higher than those for a trademark, and the cost of hiring the patent agent to create the patent is substantial. It is also worth noting that patents are publicly available, so your invention would be in the patent database. You would have a cause of action against anyone who profited from your process without your consent, but the process would be available to potential clients and competitors.
A registered trademark allows you to protect your name and image. Trade secret law, enforced through NDAs and confidentiality clauses, can protect against clients or competitors disclosing or using your property. A patent may or may not be possible, and it is the most expensive option and requires public disclosure of the process, but offer the strongest and clearest protections.
Kevin Lee is member of the BLG Venture Clinic and is a second-year law student at the Faculty of Law, University of Calgary.
 Trade-marks Act, RSC 1985, c T-13 [TM Act].
 Canadian Intellectual Property Office, “Complete list of fees for trademarks”, 28 Apr 2017, online: <http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr04194.html>.
 A full list can be found under the heading “What you can’t register”, see Trademarks Guide, Canadian Intellectual Property Office, Government of Canada (14 June 2019), online: <www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr02360.html> (TM Guide).
 Canadian Intellectual Property Office, “Canadian Trademarks Database”, 28 Apr 2017, online: www.ic.gc.ca/app/opic-cipo/trdmrks/srch/home?lang=eng
 TM Guide, supra note 9.
 Canadian Intellectual Property Office, “Find an intellectual property agent”, 15 Aug 2019, online: <www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr04549.html>.
 What is a Trade Secret?, Canadian Intellectual Property Office, Government of Canada (1 Dec 2015), online: <www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03987.html>.
 Amazon Inc v Canada (Attorney General),  4 FCR 541.
5 TIPS TO HELP YOU PREPARE FOR YOUR MEETING AND COLLABORATION WITH THE BLG VENTURE CLINIC
You have a business idea and need some assistance to draft documents. You have reached out to the BLG Venture Clinic (the “Clinic”) to set up an appointment. How can you best prepare for this meeting so you can ensure you receive the best possible service?
1. BE PREPARED TO PROVIDE A SIMPLIFIED DESCRIPTION OF YOUR BUSINESS
In order for us to properly provide you with services, we will need to understand your business. The more simply you can articulate your business the better. Even if we are preparing a standard document for you, it is important for us to understand what your business is because it may be subject to certain regulations. Before your meeting with the clinic, try to describe the nature of your business in a paragraph.
2. BE PREPARED TO ANSWER QUESTIONS ABOUT WHY YOUR BUSINESS WILL BE SUCCESSFUL
During your meeting you may be asked, “why do you think your business plan will work?” We are not asking you this question to insult you. We are asking you this question to help us better understand your business. Perhaps you have discovered a way to provide an existing service more efficiently, or maybe you have created an entirely new product. Whatever the case, providing us with such information will be helpful in our understanding of your business.
3. PRIORITIZE WHAT SERVICES YOU ARE LOOKING TO RECEIVE FROM THE CLINIC
You may have long list of tasks that you need us to help you with. That is fine, however, it will be helpful for you and us if you prioritize what needs to be done first. Providing us with 1 or 2 tasks at a time will allow for a more efficient process in completing your checklist. The great thing about the clinic is that we can continue to work with a client for an extended period of time. Setting up a business takes time and rushing the process can lead to failure.
4. PLEASE BE PATIENT
Know that the process of preparing your documents will take some time. All the clinic participants are volunteers and do our best to prepare your documents in a timely manner. However, please note that the preparation of your documents is a multiple step process. After meeting with you we may have to conduct research or speak to the head of the clinic to clarify questions regarding your matter. Next, we will complete a draft of your document and send it to an advising lawyer for review. The expectation is that the advising lawyers will return the document with comments within 3 weeks after receiving it. Once we receive the advising lawyer’s comments, we may amend your document further before sending you the final product.
Again, our goal is to get you your product in a timely manner. Feel free to send us emails requesting an update on your file throughout the process. We would like to thank you in advance for your patience.
5. PLEASE REMEMBER THAT THE BLG CLINIC CANNOT PROVIDE LEGAL ADVICE
If you are looking for legal advice, then you will likely have to see a lawyer. Clinic members are not allowed to provide legal advice since we are still law students. However, we can provide you with legal information. The following provides an explanation of legal information and legal advice:
“Legal information: explains the law and the legal system in general terms. Such information is not tailored to a specific case.
Legal advice: applies the law, including statute and case law and legal principles to a particular situation. It provides recommendations about what course of action would best suit the facts of the case and what the person wants to achieve.”
An example of how this may impact the services you receive from the clinic can be explained in the context of preparing a Shareholders’ Agreement. While the clinic may help you prepare a Shareholder’s Agreement, or provide you with a list of the different type of restrictions that can be attached to shares, we cannot advise you on what restrictions you should attach to such shares based on meeting you had with potential investors.
If you are unsure whether your matter requires legal information or advice, still make an appointment. Even if your matter falls under the category of legal advice, there may be other matters that we are qualified to assist you with.
For more information contact the BLG Venture Clinic*
Suleiman Semalulu is member of the BLG Venture Clinic and is a third-year law student at the Faculty of Law, University of Calgary.
*Due to the evolving COVID-19 situation and the University of Calgary's decision to move all in-person classes to online delivery, the clinic has cancelled all drop-in hours and has limited appointments for the remainder of the 2019-2020 academic year. We ask you contact us directly at email@example.com for more information.
 Centre for Public Legal Education Alberta,”Legal Information vs. Legal Advice. What’s the Difference?” (2019): online: CPLEA < http://www.cplea.ca/wp-content/uploads/LegalInfovsLegalAdvice.pdf>.
Carbon Pricing in Alberta
Climate Change is a central issue for businesses. Mitigating and adapting to its effects is causing far-reaching transitions in sectors such as energy, land and agriculture, banking and finance, infrastructure, transport and industry. As a result, we are seeing provincial and national attempts to price greenhouse gases (GHGs) such as Carbon Dioxide.[i] These pricing mechanisms and their laws will impact businesses resulting in both opportunities and challenges. It is increasingly valuable for any business looking to work directly or indirectly with natural resources to understand carbon pricing. This is especially the case in Alberta.
Carbon Pricing in Alberta
1. Alberta’s Technology Innovation and Emissions Reductions (TIER) Regulation[ii]
The TIER regulation came into force on January 1, 2020 and applies to facilities that emitted 100,000 tonnes of CO2e or more per year of greenhouse gases (GHGs) in 2016, or a subsequent year.[iii]
As a start-up or small business involved in the natural resources sector, you may be thinking the scope of TIER does not apply to you. However, a facility with less than emitted less than 100,000 tonnes of CO2e may be eligible to opt-in to the TIER if it competes against a facility regulated under the TIER regulation or emits 10,000 tonnes of CO2e or more per year and belongs to a sector with high emissions intensity and trade exposure.[iv]
2. Why Opt-in? Benefits of being regulated:
By opting in, facilities may apply to become exempt from the application of the federal Greenhouse Gas Pollution Pricing Act (GGPPA) for fuels whose emissions are included in their site reporting. Currently, the GGPPA charge applies to fossil fuels used in Alberta, including those in the conventional oil and gas sector. However, the GGPPA includes provisions to exempt facilities subject to provincial policies that meet the federal benchmark criteria.[v] TIER meets federal requirements and therefore can protect regulated facilities from full costs of complying with the GGPPA, while achieving emissions reductions that is cost-efficient and tailored to Alberta’ industries/ priorities.
3. How to Opt-in?
a. Opt-in key dates[vi]:
There are two pathways for a facility with emissions fewer than 100,000 tonnes of CO2e per year to opt-in to TIER:
Carbon Pricing in Canada is evolving. There are current constitutional challenges against the federal GGPPA which may impact what rules apply to your business. Additionally, consider that while TIER is the current carbon pricing regime in Alberta you may be subject to the GGPPA if you fail to opt-in.
It is beneficial to understand the applicable rules on carbon pricing. There are legal and business implications depending on what rules you are subject to. For more information on carbon pricing obligations and your business, it’s a good idea to consult with a qualified lawyer.
For more information on TIER and how it works, visit:
For more information on the GGPPA and how it works, visit:
Bradley Mills is a member of the BLG Business Venture Clinic and is a third-year law student at the Faculty of Law, University of Calgary.
[i] Norton Rose Fulbright, “Climate change and Canadian federalism: examining the constitutional dispute sparked by Parliament’s Greenhouse Gas Pollution Pricing Act”, online at: <https://www.nortonrosefulbright.com/-/media/files/nrf/nrfweb/knowledge-pdfs/climate-change-and-canadian-federalism.pdf?la=en-ca&revision=>
[ii] Technology Innovation and Emissions Reduction Regulation, 2002, (Alberta) online at: <http://www.qp.alberta.ca/1266.cfm?page=2019_133.cfm&leg_type=Regs&isbncln>
[iii] Government of Alberta, “Technology Innovation and Emissions Reduction Regulation, Information for industry on Alberta’s approach to reduce emissions from large industrial emitters”, online at: <https://www.alberta.ca/technology-innovation-and-emissions-reduction-regulation.aspx>
[v] Government of Alberta, “TIER Regulation Fact Sheet”, online at: <https://www.alberta.ca/assets/documents/ep-fact-sheet-tier-regulation.pdf>
[vi] Government of Alberta, “TIER Opt-In Fact Sheet”, online at: https://www.alberta.ca/assets/documents/ep-fact-sheet-tier-opt-in.pdf
Corporate Liability for Directors
The General Approach
Corporations are a separate entity from its directors and officers; therefore directors and officers are not normally personally liable for a corporate action,  whether in contract, fiduciary duty or tort. Unless the plaintiff (the corporation) can establish that a duty of care was personally owed by the directors, it cannot bring a case of negligence or breach of statutory duty against the directors. However, if a director was personally a party to the commission of the tort, he/she will be personally liable.
There are many statutory sources of liability for directors such as under corporation legislation, employment obligations, workplace safety legislations and tax legislations. Of all liabilities that directors face, those relating to tax remittance are more likely to happen.
According to section 227.1(1) of the Canada’s Income Tax Act (ITA), when a corporation fails to deduct, withhold, remit or pay tax as required, directors are jointly and severally, or solitarily, liable with the corporation to pay. Also in the ITA, section 242 provides that where a corporation commits an offence under this act, any director of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission is a party to and guilty of the offence. These offences can include failing to file tax returns, failing to remit taxes, failing to keep carry out compliance offers, making false statements on tax returns, and failing to keep records and documentation.
There are two significant defences available. The business judgement rule provides that courts generally do not second-guess the business decisions of directors and officers. A court will not substitute its business judgements. Director’s decisions only needs to have been reasonable in the circumstances which they were made. The decisions do not have to be the best course of action.
The due diligence defence is usually given by legislation imposing liability. The defence requires the director to show that he/she gave good effort to prevent the harm that occurred. This defence protects a director from liability if he/she can show that they were actively engaged in activities designed to prevent the harm in question.
Kara Cao is a member of the BLG Business Venture Clinic and is a second-year law student at the Faculty of Law, University of Calgary.
 Blacklaws v. 470433 Alta. Ltd.,  A.J. No. 725, 7 B.L.R. (3d) 204 (Alta. C.A.)
 Mentmore Manufacturing Co. v. National Merchandise Manufacturing Co.,  F.C.J. No. 521, 40 C.P.R. (2d) 164 at 171 (F.C.A.), per Le Dain J.
 Montreal Trust Co. of Canada v. ScotiaMcLeod Inc.,  O.J. No. 2194, 15 B.L.R. (2d) 160 (Ont. Gen. Div.)
 Bryce C Tingle, Start up and Growth Companies in Canada: A Guide to Legal and Business Practice, 1st ed (Canada: LexisNexis Canada, 2005) at 192 [Tingle, Start Up & Growth Companies].
 Ibid., at 193.
Blog posts are by students at the Business Venture Clinic. Student bios appear under each post.