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Understanding intellectual property is critical to running a startup or small business. Unfortunately, it’s also one of the most confusing and commonly misunderstood areas of the law.
In this post, we’ll define intellectual property, explain why it is so important, and the best ways to protect it.
What is Intellectual Property?
Intellectual property, also called IP or intangible assets, are things that include: (according to the Government of Canada)
- Your company’s brand name
- Logos
- Slogans
- Domain names (website addresses)
- New Products
- Inventions
- Product Designs
- Software/Formulas
- Customer Lists and Data
- Website Content
- Product Information
The simple way to identify your IP is if you can hold the asset in your hand, then it’s a regular asset. If you can’t hold it but are still able to create wealth with it then it is intellectual property. To find out more about how to identify your business’ IP assets you can refer to this guide provided by the Government of Canada.
5 Ways to Protect Your Intellectual Property
A patent is a grant from the government that gives you protection from others making or selling your invention. Your patent is good for 20 years from the date you file the patent. In terms of intellectual property, patents protect your:
- Products (e.g. your software)
- Secret Formulas (e.g. custom equations for the software you created)
- Devices to create your products (e.g. the special algorithm you invented to write your program)
- Your methods to create your products (e.g. your assembly process)
- An improvement to any of the above
The Government of Canada operates on a ‘first come, first served’ applicant process. So when you create a new invention (as defined above), it is important to file a patent application as soon as possible. In Canada, once your patent is obtained, it will be released to the public.
Filing your first patent is not an easy process and the Government of Canada recommends using a patent agent to file your patent (fees do apply). Patent agents are legal professionals (generally lawyers, but sometimes paralegals) who specialize in patent work and can make the process much faster and easier. It is possible to file a patent without a patent agent and some inventors choose to take the DIY route.
Patents filed in Canada are often filed simultaneously in the USA because Canadian patent protection doesn’t guarantee US patent protection. Without a US patent, a Canadian inventor can find themselves unable to operate in America. Fortunately, the US Patent Office also offers provisional patents, which are easier to file than standard patents and can serve as a placeholder until the inventor can complete their US patent application. The downside to provisional patents is that a complete patent application must be submitted within one year of submitting the provisional patent application.
Industrial designs refer to the visual appearance of a product. When you create your products in a certain way, how they look falls under the category of industrial designs. It has to be an original design, made by YOU. These designs cannot closely resemble another person's work or your application can be denied.
Industrial designs are not to be confused with trademarks because industrial designs are for your products’ look and not for things it does such as how it works, how you made it, or what it is made of. It is important to file for Industrial Design Rights as soon as you create the design for your products. When your design is published, you have only one year to file your application.
An example of this can be that your software comes in a circle-shaped box. Your industrial design rights will protect you from others making their box a circle. Your industrial design rights ensure the look of your box is not copied, but the method and the material it consists of are not protected. Someone can have the same process of making their software box and use the same materials as you, but if you filed for your industrial design rights first, you're entitled to keep your box a circle.
Trademarks are about the combinations of words, sounds, or designs used in the making of your business being different from any other competing product in the marketplace. Trademarks are important to have to build your company’s reputation and brand. Some of these include:
- Slogans/Taglines
- Logos
- Sounds (e.g. does your software company have a catchy jingle?)
Be aware trademarks do not cover the processes in which you make your designs, but the words, sounds and logos you used to differentiate your company. Trademarks last 10 years after registering.
Registered trademarks are generally enforced by the owner of the trademark. If you see someone copying your logo, it is up to you to send a demand letter or a cease-and-desist letter and initiate the enforcement process. There is a standard process for trademark infringement and it can be valuable to consult an intellectual property lawyer before taking action.
Copyright is protection created for original works and if others would like to do something similar, they will have permission from the owner to copy it, either the whole work or part of the work. It protects the owner from people stealing their intellectual property such as designs and materials without permission. Copyright is generally automatic for anything that you create, however, it can help to register your copyright if it is valuable since it makes it much easier to sell, license, and protect in court.
Plagiarism is when a person knowingly (or unknowingly) copies or reproduces a published piece, word-for-word or takes a massive amount of the work and takes credit as if the work was their own. Plagiarism is a criminal offence, so be careful. Copyrights last for the entire lifetime of the creator and 70 years after their death. After that, the material is considered part of the public domain, which means anybody can use it.
A trade secret is valuable business information that can bring a competitive advantage to a company and is protected exclusively by secrecy. These secrets can include the process in which you make your product, sales methods, customer profiles, supply lists, certain components to create software and more. In Canada, there is no official way to protect a trade secret, so it is up to the company to find ways to keep it confidential.
Trade secrets are extremely common. They are used because formal methods of protecting intellectual property have some serious drawbacks. Patents, for example, are difficult to register, expensive, and offer extremely narrow protection. A single modification to an existing invention can render a patent worthless. On top of that, patents are completely public, so competitors can copy patented inventions effortlessly, although they will have to modify the invention significantly to avoid being sued by the original inventor.
Some ways can be helpful to keep trade secrets safe:
- Non-disclosure agreements
- Confidentiality clauses
- Encryption
- Password protection
- Locks and Keys
- Employment Agreements
- Consulting Contracts
Goodlawyer offers an Advice Session to those who don’t know where to start, Contract Reviews for those who are ready to start protecting your assets, or speaking to an Intellectual Property lawyer to learn more and get reliable answers.
Read more about Small Business Basics topics that may be helpful to you and your small business.
