IP RIGHTS PRIMER

INTELLECTUA
L PROPERTY
A PRIMER FOR LAWYERS & START UPS
©Vandana Taxali, 2015. All right reserved.

What Are Intellectual Property Rights (subject matters of a licence agt)
• IP is original creative works reduced that can be legally protected. IP includes copyrights,
patents, trademarks, industrial designs (intangible rights) and trade secrets & confidential
information. It’s intangible and invisible so easier for others to use.
• Rights of exploitation (selling, assigning or licensing)
• Literary, artistic, or scientific works
• There are two classes of intellectual property rights:
• “Hard” intellectual property rights (patents, trademarks, copyright which are protected
by legislation)
• “Soft” intellectual property rights (confidential information, trade secrets and” know
how” which are not protected by legislation but are still intangible rights)
• When IP licenced = royalty or licence fee agreement that outlines the rights & obligations of
each party

What Are Intellectual Property Rights
Patent
• Gives the owner the exclusive right to manufacture, use and sell the invention (and
prevent others from doing so)
• Patents provide the most exclusivity & protection for 20 years from the filing of the
application
• Patents must meet four requirements:
• Patentable subject matter (any new and useful art, process, machine,
manufacture or composition of matter or improvement)
• Novelty (must not be disclosed prior to filing date of application (if by third party)
or prior to one year before the filing date of the application (if disclosure by
inventor).
• Non-obviousness (inventive ingenuity)
• Utility (functional purpose)

• Trademarks
• Gives the owner the exclusive right to the use of the trademark in Canada in respect
of the wares/services associated with it and prevent others from using the same or
confusingly similar marks
• Words, designs, symbols, colours, fragrances or “get-up” of package of product
• Copyrights
• Gives the owner the sole right to produce or reproduce the protected work.
• Copyright can subsist in original literary, artistic, musical or dramatic works
• Copyright includes the following rights (which may be licensed individually or
bundled):
• Perform the work in public
• Public the work, if unpublished
• Produce, reproduce, perform or publish any translation of the work
• Convert a dramatic work into a novel or other non-dramatic work;
• Convert any non-dramatic work into a dramatic work by way of performance in
public or otherwise;
• Make a sound recording, cinematograph film or other contrivance by means of
which a literary, dramatic or musical work can be mechanically reproduced or
performed;

Why Are IP Rights Important?
• Competitive Advantage – important for founders to offer something unique
• Exclusive Use – Copyright, trademark and patent registrations protects you from others
using your names, creations and inventions
• Additional Source of Revenue through Licensing
• Protection Against Infringement
• Note: If your business process if not protected by IP, you can still gain a competitive
advantage by protecting your trade secrets and confidential information

Why License (Monetizing Your IP)
• What is a Licence? - Licensing vs. Copyright Assignment
• Use legal language and a contract to provide restrictions
• Copyright ownership gives owner the right to credit and the integrity of the work
(changes/modifications)
• Expertise & Skills
• Owner of IP may not have the skills, capital or resources to exploit the IP, so they can
licence or provide a distribution agreement
• Provides additional revenues & commercialization opportunities
• Additional source of revenue without having to incur costs for development and
clinical trials
• Exit Strategy
• Return on investment and earn revenue without additional time and resource
investment

Examples of Licensing Arrangements
Author/Writer’s Literary Rights – acquire the right to sell the author's book within a geographic region;
Art License Agt – right to reproduce their art/photographs on merchandise in books, tv/film, album covers, coins and stamps
Merchandise Agreement - Licensing characters in a book or tv/film property on merchandise
Software Developer License – licence a particular software
Patent Owner/Inventor – licensing a technology, production process, drug formula or protocol
Trademark/Brand owner – for the right to reproduce their trademark on a product
Footage License Agt - Use of footage from movie clips in another film or tv property
Distributing & Licensing Agreement – a production may wish to license its production to a distributor to distribute the
production in other territories
Live Musical Performance – on television (synch licence)
Sound Recording Rights – reproduce a soundtrack (or master use rights) from a record company in tv or film
Musician – a producer wants to record their own version of the song
Music Licensing Library Service – licenses music from a musician/composer and re-licensed to a production company
Digital Music Streaming Services - Spotify, Pandora, Deezer, SoundCloud etc. which licence music so end user can stream
and listen

Standard Clauses in a License Agreement (Monetize IP by Licensing)
• Identification of parties
• Recitals
• Definitions
• License Grant (number of copies, territory, term, usage, market, exclusivity, scope, limits/conditions)
• Compensation & Royalties
• Audit & Statements
• Obligations of the Parties
• Term and Termination
• Dispute Resolution
• Representations & Warranties
• IP enforcement & maintenance

Biggest Mistakes Start Ups Make Regarding Their IP
1) Obtaining Rights of Third Party IP
• Proper Agreements - If you’re using someone else’s IP, make sure you get an assignment or licence to
use it. Start Ups normally have founders (including work created prior to creation of corporation,
employees, contractors, educational institutions, government agencies and third party licensing of
technology and customers. Ensure you obtain the IP through properly drafted agreement.
The license includes, but is not limited to, a license under any and all trademarks, patents and
copyrights and any applications therefore which have been filed or may be filed in the future
with respect to the Property.
• Employees - For employees, ensure there is a clause in the employment agreement that provides IP
developed while working for the start up/company is the company’s property; OR
• Independent Contractors - For independent contractors who create an invention pursuant to a contract
with the start up, presumed that ownership belongs to the employer. However, it is still advisable to
clearly state the IP and parameters of IP in the agreement.
• Timing - Obtain assignments of copyright or IP in writing from all employees, independent
contractors, etc. prior to the start of any work
• Investors - Ensure you also obtain a waiver of moral rights along with the assignment of copyright/IP
• Not advisable to use NDA

2) Failing to obtain ALL the rights needed in order to utilize a technology
• Entrepreneur’s issue as they don’t have a lot of $ at the beginning but it’s important to
protect your IP as soon as possible (if you wait to protect your IP, someone else can
steal it)
• Licence to patents but also Know-How, Consulting & Training Agt
• Licence to Film & TV but also merchandise rights
• Licence to use Technology but also licence to trade-mark
• Check whether a patent has expired
• If licensing a patent, what other countries also have a patent for that same invention
• Does the patent depend on other patented technologies. If so, then you may need a
licence for that other technology as well.
• Look at other’s IP to make sure you’re not infringing. You may need to get a licence.

3) Registering and Protecting Your IP
• If it’s your own IP, they want to see the that you have registrations or at least
applications prepared.
• Have confidentiality agreements
4) Obtain IP Protection prior to meeting with Investors (not after)
• The first thing investors want to know is that you have the rights to your IP. Important to
obtain IP protection before meeting with an investor
• They want to see that you have taken all the necessary steps to protect ownership of your
IP and exploit the IP necessary to the success of your business
5) Issues with Joint Ownership
• Ensure any work done prior to formation of company is protected with an IP agreement
• Dealing with issues of what territories and where to register your IP
• Issues of which customer to pursue for infringement
• Assign any development work done by a founder to the company

6) Obtain Written Agreements to Protect Your Trade Secrets (for business
processed not protectable by IP)
• Confidentiality Agreement to protect certain information
Obtain confidentiality agreements from employees and contractors to protect the start
ups Trade Secrets.
• Non-disclosure Agreement (NDAs)
Used to protect unpatented creations or things not protected by IP
ensure you properly identify the discloser and recipient (including subsidiaries)
Clearly define what is included in the definition of “Confidential Information”
Does the confidential information included information provided orally as well as in written
form?
Set out the purpose of the confidential information
Identify the standard of care the recipient should take to protect the confidential
information
There may be exceptions to non-disclosure agreements such as to advisors, lawyers and
accountants
Check to make sure the time limitation are reasonable
• Employment Agreements
protection from solicitation of clients
clause preventing employees from contacting clients/suppliers for a specified period of
time

INTELLECTUAL PROPERTY WORKSHEET
Company Name
Domain
Social Media Handles
Product Name 1
Product Name 2
Product Name 3
Slogan/Tag Line 1
Slogan/Tag Line 2
Competitors (Internet searches,
NUANS, Service Ontario etc.)
Trade-mark Name Options

Intellectual Property Work Sheet - Know your IP and Protect & Maintain It
(use your Business Plan to help you decide what’s unique about your business that
shoes something valuable and unique)
1) Products & Services - List all your companies products and services (eg. Software,
computer code, documentation, packaging, customer lists, supplier lists etc)
2) Categories - Group into categories and identify whether it can be protected as a patent,
trade-mark, confidential information or copyright
3) Select Your Domain - When choosing a company name, brand name or trade name,
choose the domain name at the same time (.com, .org and .ca are the best)
4) Choose Company Name – do searches to check availability (Service Ontario, NUANS,
Social Media handles and Google Searches)
5) Slogans - Write down any brand names or slogans associated with your company name
6) Unique - Make sure your trade-mark is unique and different from any other trade-mark or
brand

Trade Secrets

What is a trade secret or confidential information
• Information that is generally not known
• Arises from duty of confidence identified in common law (case law)
• Duty of confidence arises when confidential information is disclosed and recipient has
agreed that the information is confidential
• Founders may use NDAs to protect their IP instead of spending the money on IP. It’s not
always a good idea. Advisable to apply for IP protection. Despite a tight greatly worded IP,
there’s still improvements or other holes that can come out of an NDA. An NDA doesn’t
always contemplate every scenario and protect fully.
• Trade secrets protects information that is valuable to a business and kept secret. Does not
need to be patentable or protected by other IP.

Who Should Sign an NDA
• Partners in a Joint Venture
• Licensees
• Employees
• Manufacturers
• Distributors
• Consultants
• Independent Contractors

Trade Secrets (developed through common law)
• Has commercial value
• Is not publicly available or in the public domain
• Is reasonable protected
• Is communicated to others in confidence

Examples of Confidential Info
• Ideas
• Customer & supplier lists
• Documentation, manuals, processes, methodologies
• Business operations & business plan
• Financial information
• Pricing policies
• Marketing plans
• Employee salaries

IP Rights vs. Confidential Information
• Protect your business processes and ideas through duty of confidence at common law or
through a confidentiality agreement if something is non-patentable or too expensive.

Strategies for Start Ups to Protect Your Confidential Information
• Identify and mark it
• Document access to confidential information
• Institute documentation destruction practices
• Visitor badges
• Review marketing materials
• Develop a company policy
• Have confidentiality agreement signed

Venture Capitalists & NDAs
• Most will refuse to sign an NDA
• Check reputation
• Research the firm
• Mark written materials as “confidential information” so that you can rely on common law duty
of confidence
• Be selective about what you share with investors and don’t share everything all at once

COPYRIGHT

What is Copyright?
• Statutory Right
• “Every original literary, dramatic, musical and artistic work includes every original
production in the literary, scientific or artistic domain, whatever may be the mode of
expression”.
• Right to produce, reproduce, perform, adapt, translate, publish, make a recording,
communicate by telecommunication, exhibit an artistic work, rights to communicate a work
by telecommunication to the public and the right to rent out certain works

What Can You Copyright?
• Copyright is automatic upon creation and fixed in a tangible form
• You can copyright:
• Literary
• Dramatic
• Musical
• Sound Recordings
• Communication signals in a fixed form
• Etc.
• You cannot copyright:
• Ideas (copyright does not subsist in ideas but the expression of those ideas in a fixed
form)
• Public domain works
• Factual information
• Brand names, slogans, titles, etc.
• Copyright notice not mandatory but provides protection in other countries
• © [Year of First Publication]. [Copyright Owner]. All Rights Reserved.

Advantage of a Copyright Registration
• Copyright is automatic. Registration is not mandatory.
• Advantage – presumption of copyright ownership to registrant
• Onus of disproving this is on the defendant
• If a defendant can prove that he/she was not aware that copyright subsisted in the work,
then plaintiff is only entitled to an injunction (not damages).
• Process extremely simple and just a matter of completing the copyright application form
and paying a government fee of approximately $50

Copyright Infringement
• It is an infringement if a person copies the whole or substantial part of a work
• Copyright is infringed if you sell, lease, distribute, exhibit by way of trade, import for sale or
hire copyright protected work(s) into Canada

Remedies for Copyright Infringement
• Injunction
• Order for the detention of imported infringing copies
• Damages
• Accounting of profits
• Recovery of infringing copies
• Costs

Moral Rights
• Two Rights :
• 1) The right to receive credit and be associated with your work
• 2) the right not to have your work changed or modified
• Moral rights may only be waived and not sold or licensed

Citizenship Requirements
• Author must be a citizen or ordinarily resident in Canada or
• A citizen in a country to which the Copyright Act applies or
• A published work must first be published in Canada or a country to which the Copyright Act applies

TRADE-MARKS

What Is a Trade-mark?
The foundation of a brand is a trade-mark. It can be protected indefinitely by renewing.
Patents and copyright have a fixed term of protection.
A trade-mark represents the good will, reputation, quality and expertise of the company.
Whenever you have a trade-mark on a product or service, the marketplace will be able to
judge that product or service based on the reputation of the trade-mark. The more distinctive
or unique a trade-mark, the better and that you will get trade-mark protection. Descriptive
trade-marks not advisable – it becomes common and not so unique in the marketplace.
• Word or words
• Phrase
• Design
• Picture
• Symbol
• Number(s)
• Shape of a product (distinguishing guise)
• Packaging or label
• Colour (eg. Pink insulation)
• Sound (eg. MGM lion roar)
• Distinguishing guise (shape or packaging of a product that has acquired distinctiveness)
• Three dimensional tags on a product
• (or any combination of the above)
• A trade-mark is used to distinguish the wares/services from a competitor

Word Mark vs. Design Mark
• A word mark consists of just the words
• A design mark consists of the logo and graphics (with or without text)
• Examples: company name, logo, slogan, brand names of products/services, shape or
product or packaging

Use to Maintain Rights
• You must use the trade-mark consistently in order for you to rely on trade-mark rights
• You can put the trade-mark on packaging at the time of the sale. Ensure you properly mark
your good/services and give notice of your trade-mark ownership
• For a service, you can use the trade-mark in the advertising of the services or when
providing the services
• You can file a trade-mark application based on use or proposed use
• Police your marks and monitor your trade-mark
• Don’t forget to renew
• Use properly
• Licence carefully
• Ensure you get the domain and social media handles for your trade-mark

Advantages of Trade-mark Registration
• Exclusive right to use the mark across Canada for 15 years (renewable every 15 years)
• Formalize protection of trade-mark
• Registration certificate is evidence of ownership
• Helps with international protection
• Rights enforced across Canada and not limited to the geographical territory where it’s being
used
• Trade-mark rights can help with domain name disputes and social media
• Process
• File application
• Examination
• Rejection (appeal to Federal Court) or Approval
• If Approval, then Advertisement
• Opposition (If refused, can appeal to Federal Court) or Allowance (Registration)
• Process can be time consuming and take two years
• Eg. IndieGoGo filed a trade-mark application October 23, 2013
• They have been using it since January 14, 2008
• They obtained the trade-mark registration on January 15, 2015

Common Law rights for Trade-marks (Protection if you don’t register)
• Registration is not mandatory and trade-mark rights can be established under common law
(case law)
• However, protection under common law is limited to the geographical area where the brand
is being used

Trade-marks that Cannot be Registered
• Names and surnames
• Clearly descriptive marks (unique is better)
• “deceptively misdescriptive” marks
• Words that denote a geographical location commonly known to be the place of origin of such
goods or wares
• Words in other languages
• Words or designs that are considered confusing with a previously registered trade-mark or
pending trade-mark

Remedies for Trade-mark Infringement
• Injunction
• Damages or accounting of profits
• Destruction of infringing materials
• Possible criminal prosecution
• Costs

SHOPIFY
• Trade name (company name) : SHOPIFY
• Trade-mark: Shopify
• Domain name: www.shopify.ca
OCAD UNIVERSITY
• Trade names: OCAD, OCAD U, OCAD UNIVERSIT’y,
• Trade-marks: OCAD UNIVERSITY, OCADU, OCAD, ONTARIO COLEGE OF ART &
DESIGN
• Domain Name: www.ocadu.ca
• No trade-mark application for “Imagination Catalyst”
KLEENEX
• Trade name (company name): Kimberly-Clark Worldwide, Inc.
• Trade-marks: Kleenex, Soft Touch, Beyond Forests, Someone Needs One (Proposed Use)
• Domain name: www.kleenex.com

INDUSTRIAL DESIGNS

What is Industrial Design?
• An original design of article (features of shape, configuration, pattern or ornament and any
combination)
• Must be appealed to by the eye
• There must be some form of ornamentation
• Protects visually appealing aspects of industrial products eg. Shape of purse, chair,
pattern on as sweater, etc.
What is the Process for Registration?
• Registration must be applied for within one year from the date of first publication in Canada
• Offering or making the design available to the public constitutes publication

Advantages of Registration
• Exclusive use to use the industrial design to an article for the purpose of sale
• Registration is valid for 10 years from the date of registration
Remedies for Infringement
• Damages
• Injunction
• Recovery of infringing material
• Accounting of profits
• Fines for criminal offences under the Industrial Design Act
• If infringer not aware of the registration, then remedy limited to injunction (and no
damages)

PATENTS

What Are Patents
• “Any new and useful art, process, machine manufacture or composition of matter or any new
and useful improvement in any art, process, machine, manufacture or composition of matter”
• What Is Patentable?
• Must be new or novel – wasn’t known or reported before
• Useful or have some utility – has to have practical application
• Non-obvious – not obvious from prior inventions or information already available
• Patent Application Process
• Remedies for Patent Infringement

Intellectual Property Rights Summary
Copyright Trade-mark Patent Industrial Design Confidential
Information
Term Generally, life of
author plus 50
years
15 years
(renewable for 15
year periods)
Up to 20 years
(not renewable)
10 years Indefinite as long
as per contract
Territory Canada Canada
(registration)
Canada Canada
Rights
Protected
Copying &
reproducing
Use against similar
or confusingly
similar marks
Use, sales,
manufacture
Original design of
an article (shape,
configuration,
pattern,
ornament)
Disclosure of
information
What is
Protected
Literary, artistic,
musical, dramatic,
sound recordings,
communication
signals in fixed
form
Logo Design
Trade name used
in association with
wares/services
Slogans
Shape of
product/packaging
Inventions Exclusive use to
use industrial
design to an
article for the
purpose of sale
Commercially
valuable
information that is
not in the public
domain

Vandana Taxali, Entcounsel
Get in Touch
(416) 865-0800
vandana@entcounsel.com
@medialegal

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