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Mobile Food Vending: A Beginner’s Guide
Have you ever thought about operating a food truck? In the U.S. at least, the food truck industry is now generating $2 billion-plus in estimated revenue with the industry’s overall revenue having grown 300% over the last three years.[1] Though the food truck craze likely peaked a few years ago, mobile food vending may still provide budding entrepreneurs exciting opportunities to get their feet wet. Some carts and concession stands can be purchased at an attractive price point, and even food trucks, which will likely require a larger investment upfront, can be run with modest operating costs. There is also something appealing (at least to the author of this blog post) about parking your colourful truck next to the sidewalk, playing your favourite music, and dishing out your choice of delicacy to a lineup (one would hope) of eager patrons. You may also like the idea of being part of the festival scene, which largely depends on mobile food vending to keep the good people of Calgary happy and fed. If meals on wheels speaks to you like ones and zeroes probably spoke to Bill Gates, listen up; you’ll need to clear some red tape before you can get started. Food Handling Permits If your mobile food vending operation is going to require you or your staff to handle food, you will need a food handling permit. Alberta Health Services classifies mobile food vending units according to the type of food that will be handled, the manner in which said food will be handled, and the extent to which such handling presents a risk to the public. Depending on how your mobile unit is classified (types A-F), you will need to meet certain requirements, such as a minimum number of sinks or a minimum amount of fresh water that you have to have available for use at all times. Additionally, if you are not planning on preparing food in the mobile food vending unit itself, you will likely need to set up a “Base of Operations,” which would entail designating a space for food storage and preparation and then receiving approval from Alberta Health Services. Business Permits Next, you’ll need some business permits from the folks at the City of Calgary. First and foremost, anyone offering mobile food services will need to obtain a municipal business licence. The next step will depend on what kind of vending unit you plan on operating and where, exactly, you plan on parking it. If you want to operate from city streets, you’ll need to licence your mobile unit as a “full service food vehicle.” This type of licence requires a safety code inspection, which is coordinated in conjunction with a business licence fire inspection and can be scheduled by calling 311. You will also need to have a commercial vehicle licence and an insurance policy with at least $2 million of coverage in place before a full service food vehicle permit will be issued. Those wanting to park their full service food vehicle at a special event will also need an additional special event inspection (also scheduled by calling 311). If you plan on operating only from private property, or if you want to operate a pushcart outside of the downtown core, you can instead apply for a “food service – no premises” licence type. This licence will not require the building safety and fire inspections that a full service food vehicle would, although you will still need an insurance policy with at least $2 million of coverage in place before a permit will be issued. Note that this type of licence allows individuals to operate downtown between the hours of 7 am and 3 am. Some examples of food service – no premises mobile vending units include: food trucks that only operate at festivals or only sell pre-prepared foods, pushcarts outside of downtown, bicycle vendors operating on roadways that do not meet the definition of pushcart, ice cream trucks, and catering trucks. It is also important to note that operating your business on private property (regardless of how you’ve licenced your mobile vending unit) will require the property owner’s written consent. Other Considerations Regardless of which licence type you ultimately decide on, there will, of course, be fees (see the City of Calgary link provided below). You will also need to ensure that you dispose of any grey water (waste water from cleaning dishes and the like) at an approved location. Those who want to operate on Stephen Avenue Mall, Barclay Mall or Eau Claire Market will also need approval from the Downtown Association. Given that your business may feature sharp objects and open flames, you may also want to think about liability and how you will structure your business (i.e. whether to incorporate). So there you have it, the basic steps you need to get your mobile vending unit business up and running. Ultimately, one of the great things about food trucks and mobile vending units is that the municipal and provincial governments have put resources towards streamlining the licencing process. If you’re a first-time entrepreneur, that means less red tape and more time to dial in your menu, your branding, and your food trucks awesome paint job. For more information on Food Handling Permits, visit: https://www.albertahealthservices.ca/assets/wf/eph/wf-eh-mobile-food-vending-units.pdf For more information on mobile food vending in the City of Calgary, please visit: http://www.calgary.ca/PDA/pd/Pages/Business-licenses/Mobile-Food-Vendors.aspx To view the City’s fee list, visit: http://www.calgary.ca/PDA/pd/Documents/fees/business-licence-fee-schedule.pdf Aleksandar Kukolj is a member of the BLG Business Venture Clinic, and is a 3rd year student at the Faculty of Law, University of Calgary. References [1] Sam Milbrath, “12 Impressive Facts on the Food Truck Industry” (May 17, 2018) online: https://www.food.ee/blog/12-impressive-facts-on-the-food-truck-industry/.
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Are you sure you want to patent your software/app idea?
Why patent software-related inventions? Patenting software innovations may provide a number of advantages that copyright alone cannot. Some advantages of patenting software include:
To what extent can inventions covering software be patented? Convincing the patent office that an invention constitutes patentable subject matter continues to be a challenge, particularly for software patent applications. The Patent Act doesn’t include the terms ‘computer’ or software’; therefore, software must meet the general requirements for patentability in the Patent Act.[2] In Canada, in order to be patentable an invention must be novel, useful and unobvious. In other words, the invention must: not have been previously disclosed in the world; be functional and operative; show ingenuity; and not be obvious to someone skilled in the art.[3] Software innovations present additional challenges in convincing the Patent Office that they fall within the scope of “patentable subject matter”. Canadian courts have not had many opportunities to consider the patentability of software inventions. However, the issue of software patentability in Canada was recently examined in Canada (Attorney General) v Amazon.com Inc (2011 FCA 328, 2 FCR 459). The Federal Court of Appeal granted Amazon a patent for software that stored customer information to expedite future purchases (the “one-click” online ordering system), setting aside the Patent Offices’ rejection of the patent. In this case, the Federal Court of Appeal further explained that “patentable subject matter must be something with physical existence, or something that manifests a discernible effect or change”. Many software innovations satisfy these requirements, particularly when implemented on physical devices.[4] Following Amazon.com, the Patent Office issued new patent examination guidelines for computer-implemented inventions.[5] Specifically, the office stated that a purposive construction is needed to determine whether a computer is an essential element of the claims, thus distinguishing legitimate claims from disembodied inventions prohibited by Section 27(8) of the Patent Act. Hundreds of patents pertaining to computer-implemented inventions have been issued by the Patent Office since Amazon.com. Nonetheless, no bright-line test exists for determining whether a claim directed at software or a computer-implemented business method will be found to constitute patentable subject matter. Do you really need a patent for your software-related invention? Think twice before preparing a patent application. Your computer program, whether in source code or object code, remains protected under copyright. The major advantage of copyright protection lies in its simplicity. Copyright protection does not depend on any of the formalities, this means that it arises automatically. In contrast, a patent must be applied for, in principle, in each country in which you seek patent protection. In order to enjoy patent protection, an application for a patent shall comply with both formal and substantive requirements, and a patented invention shall be disclosed to the public. Due to these complex requirements for the grant of patents, the costs for obtaining and enforcing a patent may be costly. Unless you have important financial resources, it may be worth considering whether patenting your software-related innovation is the best way to protect your product. The possibility and feasibility of using other types of intellectual property, such as trademarks, industrial designs and trade secret protection, may also be considered.[6] Amber Blair is a member of the BLG Business Venture Clinic, and is a 2nd year student at the Faculty of Law, University of Calgary. References [1] Smart & Biggar | Fetherstonhaugh, “Obtaining Software Patents” (October 2004), online: Smart & Biggar } Fetherstonhaugh Information Sheet (PDF) <http://www.smart-biggar.ca/Assets/Software_Patents.pdf>. [2] Sean Gill & Grant W. C. Tisdall, “Patentability in Canada” (11 January 2016), online: Gowling WLG: Insights & Resources (blog) <https://gowlingwlg.com/en/insights-resources/articles/2016/patentability-in-canada/>. [3] Patent Act, RSC 1985, c P-4, s. 2, 28.2, & 28.3. [4] Cameron Gale, “Canadian Software Businesses Should Consider Patents Despite CIPO’s Misleading Messages”, (22 February 2019), online: Bereskin & Parr: Insights & Resources <https://www.lexology.com/library/detail.aspx?g=7e795fb0-a866-40d8-a777-52db6a0a6f0b>. [5] Canadian Intellectual Property Office, “Examination Practice Respecting Computer-Implemented Inventions” (8 March 2013), online: Government of Canada < https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03627.html>. [6] World Intellectual Property Organization, “Patenting Software”, online: World Intellectual Property Office Documents <https://www.wipo.int/sme/en/documents/software_patents_fulltext.html>. A Summary of Proposed New Rules for Cryptocurrency Exchanges
Cryptocurrency exchanges, depending on how they operate and the crypto assets they make available for trading, may already be subject to securities and/or derivatives regulation. Canadian regulators are proposing new rules to govern cryptocurrency exchanges aimed to curtail the risks associated with those trading platforms. The consultation paper was published on March 14, 2019 and can be found here: https://www.osc.gov.on.ca/en/SecuritiesLaw_csa_20190314_21-402_crypto-asset-trading-platforms.htm At the time of writing this, it’s unclear when any new regulations would come into effect. Part 3 of the Proposed Regulations: Risks Related to Platforms Any start-up considering crypto assets, as a potential avenue for financing, need to be aware of the risks associated with these Platforms.[1] These include:
The regulators are looking to have Platforms that build consumer confidence, expand business in Canada and globally, foster greater market integrity, provide clarity, and protect investors.[2] These are objectives are similar to those of traditional exchanges such as the TSX and the TSX-V. Currently there are no Platforms recognized as an exchange or otherwise authorized to operate as a marketplace or dealer in Canada.[3] The consultation paper seeks input from the fintech community, market participants, investors and other stakeholders looking at how regulatory requirements may be tailored for crypto-asset trading Platforms operating in Canada. Comments are due by May 15, 2019 and include the following areas: 5.2.1 Custody and Verification of Assets The regulations contemplate requiring that Platforms obtain SOC Type II reports as well as yet-to-be determined standards specific to crypto assets if they are seeking registration as an investment dealer and IIROC membership. Traditional custodians that hold assets for clients typically engage an independent auditor to perform an audit of the custodian's internal controls and prepare an assurance report, such as SOC 1 and SOC 2 Reports, pertaining to the design of the controls (Type I Report) and a report assessing whether such controls are operating as intended (Type II Report). There have been challenges with crypto asset custodians and Platforms obtaining SOC 2, Type II Reports, in part due to the novel nature of crypto asset custody solutions and the limited period of time that Platforms have been in operation to allow for the testing of internal controls. 5.2.2 Price Determination Platforms will be required to foster price discovery for the crypto assets they offer for trading. Where the Platform or an affiliate acts as a market maker and provides quotes, the mechanisms for determining those quotes are expected to be available to participants. When trading as a market maker against its participants, a Platform will also be required to provide participants with a fair price. 5.2.3 Market Surveillance The regulations propose that Platforms not permit dark trading or short selling activities, or extend margin to their participants. The existing types of marketplaces have different regulatory responsibilities. Exchanges are responsible for conducting market surveillance of trading activities on the exchange and enforcing market integrity rules. All of the existing equity exchanges have retained IIROC to monitor trading activity and enforce market integrity rules. Alternative trading systems, by contrast, are not permitted to conduct market surveillance or enforcement activities and are required to engage a regulation services provider (RSP). IIROC currently acts as an RSP to all equity and fixed income marketplaces. 5.2.4 Systems and Business Continuity Planning Marketplaces are currently required to:
5.2.5 Conflicts of Interest Platforms will be required to identify and manage potential conflicts of interest and will be required to disclose whether they trade against their participants, including acting as a market maker, and the associated conflicts of interest. To the extent Platforms are required to become IIROC Members, they will also be subject to requirements in the Universal Market Integrity Rules aimed at mitigating the risks associated with trading against their participants. 5.2.6 Crypto-asset Insurance Dealers are required to maintain bonding or insurance against specific risks and in specified amounts. This requirement may not address the specific operational risks of Platforms. There may be significant difficulty and costs for a Platform to obtain insurance, in part due to the limited number of crypto asset insurance providers, and the high risk of cyber-attacks. Therefore, some Platforms have indicated that they are considering limited coverage that only extends to certain crypto assets, crypto assets in "hot wallets" or "cold wallets", loss as result of hacking, or loss from insider theft. 5.2.7 Clearing and Settlement All trades executed on a marketplace are required to be reported and settled through a clearing agency. Without exemptive relief, this requirement would also apply to Platforms that are marketplaces. However, currently there are no regulated clearing agencies for crypto assets that are securities or derivatives. The regulators are considering whether an exemption from the requirement to report and settle trades through a clearing agency is appropriate. In these circumstances, Platforms will still be subject to certain requirements applicable to clearing agencies and will therefore be required to have policies, procedures and controls to address certain risks including operational, custody, liquidity, investment and credit risk. The Regulators plan to revisit such exemptions in the future, as the space continues to develop and evolve. Some Platforms may operate a non-custodial (decentralized) model where the transfer of crypto assets that are securities or derivatives occurs between the two parties of a trade on a decentralized blockchain protocol (e.g. smart contract). These types of Platforms will be required to have controls in place to address the specific technology and operational risks of the Platform. Criticism Evan Thomas, a lawyer at Osler, Hoskin & Harcourt LLP who specializes in blockchain technology warns that “the cost, time and other practical difficulties of complying with many of the regulatory requirements contemplated by the paper would effectively shut out many innovative crypto asset trading platforms from the Canadian market.”[4] Colin Patterson is a third year student at the Faculty of Law, University of Calgary, and is a JD and CPA candidate. References [1] https://www.osc.gov.on.ca/en/SecuritiesLaw_csa_20190314_21-402_crypto-asset-trading-platforms.htm [2] https://www.osc.gov.on.ca/en/NewsEvents_nr_20190314_csa-consult-on-regulatory-framework-crypto-asset-trading-platforms.htm [3] Supra note 1 [4] https://www.theglobeandmail.com/business/article-canadian-regulators-propose-framework-to-govern-cryptocurrency/ So, You’re Ready to Incorporate You’re Business: Where to Start.
You’ve had a great idea for some time. You’ve considered it deeply. You’ve made a business plan, and now it’s time to turn your dream into a reality. But where to start? There are a variety of forms a business can take, but the corporate structure has tended to predominate for start-ups in Canada. [1] There is a good chance therefor you might settle on the corporate form for your new business. This post will not consider the pros and cons of different business structures. If you would like information that could help you choose a business structure, please contact the BLG Business Venture Clinic (the “Clinic”). [2] Incorporation, particularly in Alberta, is the subject of this writing. The purpose of this post is to shine light on resources that can help get you started and raise important considerations. Free Resources There are many free resources available online. It is important to ensure the information you find is trustworthy before relying on it to make business or legal decisions. The BLG Business Venture Clinic does not certify the correctness of the information in the resources that follow. The Government of Canada provides a “Business Start-up Checklist” which offers a wide variety of information, including direction to provincial and territorial business registration resources. [3] The business registration information is separated by province and territory. [4] This is important because a business can be incorporated in a province, a territory, or at the federal level. The Government of Alberta offers information on registry costs and categorizes registries by services offered. [5] To find a business registry that offers incorporation services in your area, registry locations can be searched by city or town. [6] Before you head to your local registry, there are a number of steps and information to gather. The Government of Alberta provides a list of steps to incorporate a business in the province. [7] They are as follows:
Considerations An entrepreneur could use the resources above, pay the NUANS report and incorporation fees and successfully incorporate a business in Alberta. The incorporation documents discussed are the legal foundation of a business and considerable thought should go into drafting their substance. For example, in the articles of incorporation or an appendix thereto, the drafter can add desired provisions. A provision in the articles can allow the board of directors to increase the number of directors by up to one third (1/3) of those elected at the last annual general meeting. [11] This increase can remain in effect until the following annual general meeting. [12] Another consideration is, “[t]he securities law regime in Canada requires that certain restrictions on the transfer of shares be included in the articles of a company if certain exemptions from prospectus and registration rules are to be available.” [13] One of these exemptions is the “private issuer” exemption which “is one of the easiest and least complicated to use in the very early stages of a growth company’s financing.” [14] Aside from the documents discussed above, a corporation should consider having by-laws ready to sign upon incorporation. The by-laws of a corporation deal with a variety of internal elements including processes, powers, and roles. Ensuring a corporation has by-laws in place from the start can avoid uncertainty and potential issues. There are boiler-plate by-laws available online, but they often are ill suited to a particular corporation. Certain boiler-plate provisions “will be removed as a condition of any future financing.” [15] They should be avoided at the outset instead of requiring amendment later. Aside from issues to avoid, the by-laws should be drafted to appropriately reflect the needs of the corporation. This means including the right provisions and the correct balance of powers. Conclusion Resources are available to incorporate a business on ones own. There are however considerations and drafting of language that may warrant the services of a lawyer. Finances are often tight during the start-up phase and it may be tempting to avoid the cost of legal fees. However, there are options that may help control costs. The BLG Business Venture Clinic is one resource that can help do just that. The Clinic offers free legal assistance, provided by law students. The assistance offered includes drafting of documents discussed in this post and the writing of memos on specific issues or questions a business might have. It is recommended that clients of the Clinic have the work reviewed by a lawyer. A review of prepared documents should however cost less than having a lawyer draft the documents themselves. Neil Thomas is a member of the BLG Business Venture Clinic, and is a 2rd year student at the Faculty of Law, University of Calgary. References [1] Bryce C. Tingle, Start-up and Growth Companies in Canada: A Guide to Legal and Business Practices, 3rd ed (Canada: LexisNexis Canada Inc, 2018) p 58 [Tingle]. [2] University of Calgary, “We’re here to help – Contact us!” (2017), online: BLG Business Venture Clinic <thttp://www.businessventureclinic.ca/contact.html >. [3] Government of Canada, “Business Start-up Checklist” (September 28, 2018), online: Government of Canada <https://canadabusiness.ca/starting/checklists-and-guides-for-starting-a-business/business-start-up-checklist/>. [4] Ibid. [5] Government of Alberta, “Find a business registry” (2019), online: Alberta <https://www.alberta.ca/find-business-registry.aspx>. [6] Government of Alberta, “Level 2: advanced registrations” (2018), online: Alberta <http://servicealberta.ca/Find-a-business-advanced-registrations.cfm>. [7] Government of Alberta, “Alberta Corporations” (2018), online: Alberta <https://www.servicealberta.ca/712.cfm>. [8] Ibid. [9] Ibid. [10] Government of Alberta, “Incorporation forms” (2019), online: Alberta <https://www.alberta.ca/incorporation-forms.aspx>. [11] Business Corporations Act (Alberta), RSA 2000, c B-9, s 106(4). [12] Ibid. [13] Tingle Supra note 1 at p 63. [14] Tingle Ibid; Prospectus and Registration Exemptions – Consolidated Version for Periods Relating to Financial Years Beginning Before January 1, 2011, NI 45-106, s 2.4. [15] Tingle Ibid. NON-COMPETE CLAUSES
What are they? A non-compete clause is a provision designed to limit a former employee’s ability to work for a competitor or open a competing business. Non-compete provisions are sometimes included in employment contracts, but they can also form a standalone agreement. Non-compete clauses are very common, especially among start-up companies. After all, the last thing a company wants when an employee resigns or is terminated is for that employee to launch a competing business or head straight to the nearest competitor. Employees may have intimate knowledge of their former employer’s trade secrets, operations and business plans, and may have gained access over the course of their employment to valuable information relating to customers, clients, new products and marketing strategies. Are they enforceable? Despite their popularity, non-compete clauses can be difficult to enforce. From a public policy perspective, the courts want to ensure that individuals are not unfairly prevented from earning a living. This has resulted in courts frequently striking down non-compete provisions that are deemed to be “an unreasonable restraint on trade”.[1] However, there are a number of surrounding factors that courts consider in assessing the reasonableness and validity of a non-compete clause. Understanding these considerations can help employers craft effective non-compete provisions that are as minimally restrictive as possible. To design a non-compete that will protect the company and withstand a legal challenge, consider the recommendations below. Limit the scope The more limited a non-compete is with respect to duration and geographic scope, the more likely courts are to enforce it. In Kohler Canada v Porter, the provision in question restricted a manager from competing anywhere in North America for one year after termination of employment “in a line of business…in which the employee worked”. The court struck down the provision for being too broad.[2] Moreover, the geographic scope should be clearly and unambiguously defined. In Shafron v KRG Insurance Brokers (Western) Inc., the court refused to uphold a non-compete clause they deemed unenforceable due to ambiguity.[3] The contract in question sought to prevent a former employee from working anywhere in “the Metropolitan City of Vancouver”, which is not a legally recognized geographic area. As a consequence, the court held that the entire agreement was invalid. Employers should also embed in the agreement itself the rationale for the geographic and temporal scope.[4] Courts may consider such factors as the duration of the employee’s tenure, the size of the market in a geographic region, and the nature of the information to which the employee had access or how closely they worked with clients.[5] Being transparent about the factors that inform the scope of the non-compete can help a court assess whether or not it is reasonable. Further, a company may choose to tailor a non-compete clause in terms of the specific jobs its employee will be prevented from taking, or the competitors they will be prevented from joining for a period following the termination of their employment.[6] This way, the company can protect itself in the areas in which it is most vulnerable, without unduly hampering the employee’s ability to find subsequent employment. This means that non-compete clauses must be specific to the employee, having regard for the roles and competitors where that employee most poses a risk to the company. Don’t impose non-compete agreements on everyone While it may be tempting to bind every employee to a non-compete agreement, such indiscriminate application can actually weaken the protection afforded by such provisions. If every employee is required to sign a non-compete agreement regardless of how tangential their role is to the company’s main business, the courts may view this as demonstrating a company’s unreasonableness.[7] In assessing whether a non-compete clause is necessary or reasonable, courts will consider whether a departing employee had influence over clients or customers and how much damage the employee could do in the same market as the company.[8] A receptionist leaving the company likely doesn’t pose the same risk that a software engineer or salesperson does. A company’s use of non-compete agreements should reflect that. Consider a non-solicitation agreement instead A non-solicitation agreement can be used to prevent a departing employee from poaching the company’s clients, investors, suppliers and other employees. While non-solicitation agreements can also be struck down if they are too broad, they are more likely to be enforceable than are non-compete agreements. Non-solicitation agreements may be as (or more) effective as non-compete agreements at protecting a company. A salesperson leaving to join a competitor’s team can do far less damage if they are not allowed to take clients with them. Although non-solicitation clauses should be customized just as non-competes are too avoid being struck down for over breadth, there are a few good rules of thumb. First, limit them to one year or less. Second, the clause should be drafted to prevent an employee from soliciting only those individuals with whom they developed a relationship over the course of their employment. Attempting to prevent the employee from contacting anyone the company does business with has greater potential to be viewed as unreasonable, particularly in smaller markets. Melanie Bowman is a member of the BLG Business Venture Clinic, and is a 2rd year student at the Faculty of Law, University of Calgary. References: [1] Bryce C. Tingle, Start-up and Growth Companies in Canada 3rd ed (LexisNexis Canada Inc., 2018), at 131. [2] Kohler Canada Co. v Porter [2002] OJ No.2418, 26 BLR (3d) 24 (Ont SCJ). [3] Shafron v KRG Insurance Brokers (Western) Inc.,2009 SCC 6, [2009] 1 SCR 157. [4] Supra, note 1 at 132. [5] Lisa Stam, “Is My Employee’s Non-Compete Agreement Enforceable?” (21 February 2018), online (blog): Employment and Human Rights Law in Canada < https://www.canadaemploymenthumanrightslaw.com/2018/02/employees-non-compete-agreement-enforceable/> [6] Supra, note 1, at 132. [7] Ibid. [8] Supra, note 5. |
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