Identifying and Protecting Intellectual Property Assets

Justine WhiteheadSTIKEMAN ELLIOTT LLP

Ottawa, Ontario

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What is “intellectual property”?

Certain creations of the mind can be considered “property”, because legal means exist to allow owners to exclude others from using the property

Intellectual property (IP) is an intangible asset

IP is protected to encourage creators, but public interest is also balanced in the statutory schemes

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Why should you care about intellectual property?

IP issues arise for employees and for entrepreneurs

Often a major portion of a company’s assets consist of registered and unregistered intellectual property

Identifying and protecting IP adds value to business

Issues involving the identification and protection of IP arise in a number of contexts:– Creation– Registration or other protection

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What is confidential information?

There is no statutory or commonly accepted definition: confidential information / proprietary information / trade secrets often used interchangeably

Confidential information is information which is not in the public domain and which provides the owner with a business advantage

If a product can be reverse engineered, its make-up generally can not be considered confidential

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“Hard Work” or “Springboard” Secrets

Absolute secrecy not always required

Publicly available information that requires expenditure of time and effort to compile can be protected:– Calgary Winter Olympics site case (Pharand Ski Corp. v.

Alberta (1991), 37 C.P.R. (3d) 288 (Alta Q.C.)– Clamato case (Cadbury Schweppes Inc. v. FBI Foods Ltd.)

[1999] 1 S.C.R. 142

Liability may be limited to value of head start and defendant may not be precluded from future use

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How is confidential information protected?

Before disclosure– Ensure adequate physical security measures

taken– Monitor relevant publications/speeches by

employees– Watch out for “dumpster diving”– Carefully consider and define the confidential

information to be disclosed when executing non-disclosure agreements

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How is confidential information protected?

Common law rights of action

Breach of contractual terms, whether express or implied

Breach of confidence

Breach of fiduciary duty

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Action for Breach of Confidence

To establish a breach of confidence, three elements must be shown:– The information itself must have the necessary quality of

confidence about it;– That information must have been imparted in

circumstances importing an obligation of confidence; and– There must be an unauthorized use of that information by

one party to the detriment of the party whom the confidential information belongs

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Ownership of confidential information

If an employee creates valuable confidential information, who owns it?– Courts generally presume employee owns, unless:

Express contract to the contrary Individual hired for purpose of inventing, or Individual is a fiduciary and thus has a higher duty of good faith

towards the company

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Is everything an employee knows confidential information?

– A company can protect objective knowledge (e.g. trade secrets or formulae)

– A company cannot stop a former employee from using his or her subjective knowledge (e.g. the skills and aptitudes that are transferable from job to job)

– Often not easy to distinguish between the two

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Patents - Introduction

A patent is a statutory monopoly granted under the Patent Act for inventions

Patents typically have a term of 20 years

The monopoly grants the right to exclude other from making, using or selling the invention

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What is protected?

Each patent application (“specification”) contains two distinct parts – disclosure and claims

Patent protection is afforded to the claims as set forth in the patent registration

Each individual claim is, in effect, a separate and distinct monopoly awarded to the inventor

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What is the test for patentability?

Novel – Watch out for public disclosure and prior art

Non-Obvious– An objective test using “person skilled in the

art”

Useful– Invention must work

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Ownership of Inventions

Inventor [the person who first independently thought of the invention and objectively manifested the idea]

Employee

Independent Contractor

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Industrial Designs

Industrial Design Act grants a statutory monopoly to protect the esthetic aspects of a manufactured article

Term of 10 years from date of registration

Exclusive right to make, use and sell items embodying the design

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Copyright - Introduction

What is “copyright”?– A property right in certain types of works, such as literary, artistic

and musical works– Copyright is separate from the rights in the tangible creation– Copyright owner has the exclusive right to produce or reproduce the

work or any substantial part thereof in any material form whatever

What is “original”?– Creative spark not necessary, but need more than mere “sweat of the

brow” – an original work is the result of an exercise of skill and judgment in

the production of that work

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What is protected?

Copyright protects the particular expression of an idea, and not the idea itself

What can be a “work”?– Literary, dramatic, musical or artistic endeavours– Computer software, tables are considered literary work– Protection extends to almost anything written, composed, drawn or

shaped including commercial advertisements, jingles, company logos

Work created outside Canada may be protected by copyright in Canada if the author was a citizen of or ordinary resident in a country that is a WTO member or that is a signatory to the Berne Convention or the Universal Copyright Convention

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Who owns copyright?

Usually the author of the original work

But if an employee creates a work in the course of employment, that work belongs to the employer

An assignment of copyright must be in writing

When the author is the owner of the work, an assignment is effective only for the life of the author plus 25 years, after which the copyright reverts to the author’s estate

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What are moral rights?

Right of integrity

Infringed where work, on an objective basis, is distorted, mutilated, or otherwise modified to the prejudice of the honour or reputation of the author

Right of paternity

Where reasonable in circumstances, to be associated with the work as its author, by name or pseudonym, or to remain anonymous

Moral rights non-assignable, but subsist for the same term as other copyright rights– Moral rights can (and should) be waived in any copyright assignment

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How long do copyrights subsist?

Generally, for the life of author plus 50 years

Some exceptions (e.g. photographs)

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Trademarks - Introduction

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Trade-mark/Trade Indicia

What is a “trade-mark”?– A trade-mark is a word, logo, phrase (or any

combination thereof)– A trade-mark identifies the source or origin of

products and services and distinguishes one merchant’s offerings from those of its competitors

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How do trade-mark rights arise?

Trade-mark rights are created by “using” the trade-mark, and maintained by continuing its “use”

“Use” for goods Appear on the goods (wrappers, labels, packaging),

or brought to attention of consumer another way At the time of sale In the normal course of trade

“Use” for services Appears in advertising relating to the services

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How are trade-marks protected?

A trade-mark registration lasts 15 years and is renewable in perpetuity

A registration gives an owner the right to the exclusive use of the trade-mark throughout Canada in association with the goods/services for which it is registered

Common law trade-mark rights support tort of passing off. To be successful, a plaintiff must show:– Reputation, or goodwill, acquired in the market place and attached to the

goods/services provided in association with the mark;– Misrepresentation by the defendant causing confusion as to the source of

the product; and– Actual or potential damage to the plaintiff due to the defendant’s conduct.

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Benefits of Registration

Registration grants right to exclusive use throughout Canada, even if the trade-mark is not actually used throughout Canada

Registration can also allow the owner to defend itself against a third party trade-mark infringement claim, if the owner is sued for using its mark as registered

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Benefits of Registration – Access to Statutory Rights of Action

Imitation (section 19)

YOPLAIT for yogurt vs. YOPLAIT for yogurt

Confusion (section 20)

YOPLAIT for yogurt vs. YOUPLAY for yogurt or YOPLAIT for butter

Depreciation of goodwill (section 22)

GOODTIME cars: all the quality of a FERRARI, without the exorbitant price!

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Who owns the trade-mark?

The entity that uses the trade-mark to distinguish its goods and services from others owns the trade-mark right

If one can prove prior use of a mark or a confusingly similar mark, ownership can be challenged

There can be instances of conflict between trade-mark rights and copyright rights (if a contractor designs a logo for you, make sure you get the copyrights to the logo assigned to you in writing)

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What is the difference between a trade-mark and a trade name?

Trade name: the name under which any business is carried on, whether or not it is the name of a corporation, a partnership or an individual

A trade name is used for the purpose of distinguishing the owner’s business (not necessarily its goods and services) from the businesses of others

Corporate name registration does not automatically entitle a company to use its name as a trade-mark

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What is the difference between a domain name and a trade-mark?

Domain names identify website addresses of businesses

Domain names are more user-friendly than having to enter a number-based IP (Internet Protocol) address

A trade-mark owner can stop others from using the same or a confusingly similar trade-mark as part of a domain name for a competitive product or service, if such use is likely to cause confusion in the minds of the public about the source of the goods/services

www.stikeman.com

Justine WhiteheadTel: (613) 566-0541jwhitehead@stikeman.com