Intellectual Property and Startups

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
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.[1] This affords national protection of names and logos once registration is complete. There is a $330 application fee.[2] 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.[3] An application may also be refused if it is confusingly similar to a previously filed trademark.[4] You can do a search yourself in the Canadian Trademarks Database[5] 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.[6] If the application is approved and no one opposes, the trademark will be registered.[7] 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.[8] 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.[9]

Trade Secrets
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).[10] 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.

Patent
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[11] 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.[12]
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.

Summary
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.

REFERENCES
[1] Trade-marks Act, RSC 1985, c T-13 [TM Act].
[2] 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>.
[3] 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).
[4] Ibid.
[5] Canadian Intellectual Property Office, “Canadian Trademarks Database”, 28 Apr 2017, online:  www.ic.gc.ca/app/opic-cipo/trdmrks/srch/home?lang=eng
[6] TM Guide, supra note 9.
[7] Ibid.
[8] Ibid.
[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>.
[10] 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>.
[11] Amazon Inc v Canada (Attorney General), [2010] 4 FCR 541.
[12] Ibid.