Disclosure Considerations for Inventors

Written by Noah Smith
JD Candidate 2027

Many new ventures, especially those emerging from university labs, are often built around novel ideas and discoveries. Because these innovations often form the core of a startup's market advantage, protecting them from competitors is crucial. At the same time, founders need to generate interest, build partnerships, and attract funding, which inevitably requires sharing information about their work.

Finding the right balance can be difficult. Share too much and you risk losing control over your intellectual property. Share too little and you may never build the traction needed to turn your idea into a viable business.

Patents
For many early-stage companies, keeping information confidential as trade secrets is the most practical and affordable form of protection. As a startup grows, however, securing longer-term and more defensible intellectual property rights often becomes necessary. One of the most powerful means of accomplishing this is the patent.

A patent is a time-limited monopoly granted in exchange for public disclosure of an invention. In Canada, patents are governed by the Patent Act,[1] which defines an invention as any new and useful art, process, machine, manufacture, composition of matter, or improvement to one of these. To be patentable, an invention must be new (novel), useful, and non-obvious to a person skilled in the invention’s field.

If granted, a patent affords its owner exclusive rights to make, use, and sell the invention for 20 from the filing date.[2] This exclusivity can serve as a significant competitive moat and can also reduce concerns about revealing technical details to investors or partners, because disclosure has already been formalized through an application.

That said, patents are not the right choice for every business. They are expensive, often slow to prosecute, uncertain in outcome, and can be difficult to enforce. But leaving those broader considerations aside, even when patents are appropriate, founders must avoid the major and common pitfall of premature disclosure.

The Disclosure Challenge
To understand why premature disclosure is risky, it is important to return to the requirement of novelty. Under section 28.2 of the Patent Act,[3] an invention must not have been previously disclosed in a way that made the subject matter available to the public anywhere in the world. Public disclosure of an invention before filing can therefore destroy novelty.

This rule applies to various activities founders find themselves involved in. Pitch competitions, demo days, research posters, academic publications, marketing materials, and even informal discussions not protected by a non-disclosure agreement can all jeopardize novelty.

Once an enabling disclosure occurs, the opportunity to seek patent protection may be lost. This not only freely exposes the idea to competitors but also undermines long-term patentability in many major markets.

Grace Periods
Canada provides inventors a safety net in the form of a one-year grace period. If the inventor (or someone who learned the invention from the inventor) discloses information within 12 months before filing, that disclosure will not defeat novelty. The United States offers a similar one-year grace period under its patent statute, with some subtle nuances that are worth considering.[4]

The biggest key difference relates to priority claims. In the US, an inventor can preserve novelty either by filing within one year of their disclosure or by claiming priority to an earlier application that was itself filed within that one-year window. Canada does not offer this flexibility.[5] The Canadian grace period runs strictly from the Canadian application filing date, and a priority claim to an earlier foreign application will not extend it.

As a consequence, if a founder discloses their invention and then files a US provisional application within 12 months, they cannot wait another year to file in Canada relying on that US priority date. The Canadian application must always be filed within 12 months of the original disclosure.

Importantly, many major jurisdictions do not offer any grace period at all. Europe, China, and most other markets apply an absolute novelty requirement.[6] Under the European Patent Convention, any public disclosure before filing can be fatal. As a result, a single unplanned disclosure can eliminate the possibility of obtaining patent protection across much of the world.

Given these consequences, founders aiming for global markets need to take disclosure risk seriously.

Guiding Disclosure
Fortunately, there are several practical measures founders can take to protect the confidentiality of their innovations.

1. Selective Disclosure: Founders can be strategic about what they reveal and how. This may include avoiding technical detail in pitch decks, presentations, websites, or early marketing materials. High-level descriptions are often sufficient for investor or partner discussions.

2. Academic Publications: For university founders, academic publications are a particularly relevant risk. Journal articles, conference papers, and even research posters can destroy novelty. Founders may coordinate closely with their technology transfer office when these forms of disclosure are being considered.

3. Non-Disclosure: When a degree of disclosure is required, non-disclosure agreements can provide some protection. While NDAs are not a perfect remedy, they are an important safeguard to consider when sharing sensitive information with potential investors or collaborators.

4. Data Security: Inadvertent information leaks can happen through poorly secured data repositories or prototypes. Strong internal data-handling practices help prevent accidental disclosure and keep ideas in-house.

5. Record-Keeping: It is also important for founders to maintain clear records. Well-kept laboratory notebooks, dated design files, and version histories help establish inventorship and priority should issues arise.

6. File Early: While not always practical, filing an initial application locks in a priority date and significantly reduces the risk of losing rights due to later disclosures. Even a minimal filing can be enough to secure that date.

Conclusion
For many startups, managing the tension between promoting an innovation and protecting it is a critical early challenge. Understanding how disclosure affects patent rights, and recognizing the limits of grace periods, can help founders avoid irreversible mistakes. When in doubt, the safest approach is to file before you pitch, present, or publish.

Note: The above information does not constitute legal advice. No guarantees are made as to accuracy, completeness, or applicability to individual situations.​

References
1. Patent Act, RSC 1985, c P-4
2. Canadian Intellectual Property Office, “Patents – Learn the basics / Inventing the next big thing: Learn why patents matter” (last modified 1 October 2024), online: https://ised-isde.canada.ca/site/canadian-intellectual-property-office/en/patents-learn-basics-inventing-next-big-thing-learn-why-patents-matter
3. Patent Act, RSC 1985, c P-4, s 28.2.
4. United States, 35 USC § 102(b)(1).
5. McMillan LLP, “Don’t get caught by Canada’s patent-novelty grace period” (24 September 2024), online: https://mcmillan.ca/insights/publications/dont-get-caught-by-canadas-patent-novelty-grace-period/
6. European Patent Convention, 5 October 1973, 1065 UNTS 199, art 54(2).