Intellectual Primer For Small Business oct 2011

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The strategic management of intellectual property assets can give SMEs a proprietary market lead, improve their competitive positioning and enhance their enterprise value. It is, therefore, important that small businesses have a proactive approach to stimulate the creation and management of their IP assets. Learn the basics of Intellectual Property (IP) for your small business and how to protect and leverage your IP assets for business success. This session will remove the mystique around patents, trade-marks and copyright and explore how you secure them and what they might cost.

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  • Check employment agreement Don’t develop anything related to your employer’s business or prospective business. If you do, don’t use the employer’s equipment or work on it during working hours. Analogize to having an affair.
  • Century 21 case: Zoocasa was found in breach of copyright and in breach of terms of use of Century 21’s website. No fair dealing defence.
  • Intellectual Primer For Small Business oct 2011

    1. 1. Enterprise Toronto Small Business Forum Intellectual Property: A Primer for Small Businesses Presented by: Rubsun Ho [email_address] @rubsun October 18, 2011
    2. 2. What’s a legal session without a disclaimer? <ul><li>The information provided in this presentation represents a general overview and understanding of intellectual property issues. It is not intended to be used as legal advice. Any application of the contents of this seminar in the context of a specific business should entail further legal consultation and consideration. </li></ul>© 2011 Cognition LLP
    3. 3. About Cognition <ul><li>Founded in recognition of the fact that traditional legal services model was too expensive for startups and growth companies </li></ul><ul><li>Virtual model means lower overhead and lower rates </li></ul><ul><li>Former In House lawyers (e.g. Canadian Tire, RIM, Nortel, Sun Microsystems, etc.) who also practiced on Bay St (e.g. Gowlings, Stikemans, Oslers) </li></ul><ul><li>32 lawyers in Toronto & Ottawa </li></ul>© 2011 Cognition LLP
    4. 4. Intellectual Property A 15 Minute Overview <ul><li>Employment and Contractor Issues </li></ul><ul><li>Contractual Relationships </li></ul><ul><li>Trademarks </li></ul><ul><li>Patents </li></ul><ul><li>Copyright </li></ul>© 2011 Cognition LLP
    5. 5. You Have an Idea... <ul><li>“ A couple of friends and I are going to develop some software in our free time” </li></ul><ul><li>“ I can’t quit my job because I’ll still need the income while we get our software off the ground” </li></ul>© 2011 Cognition LLP
    6. 6. IP Issues in Employment <ul><li>One of the first due diligence checks is to examine the chain of IP ownership </li></ul><ul><li>Generally, an employer owns IP created by an employee in course of employment </li></ul><ul><li>Copyright Act says copyright created by employee in the course of employment is owned by employer </li></ul><ul><li>Employment agreements tend to have very broad assignments of IP to employers, especially if a related business and/or if using the employer’s “tools” </li></ul><ul><li>Don’t burn any bridges with old employer – you may need their signoff in the future </li></ul>© 2011 Cognition LLP
    7. 7. You Decide to Incorporate <ul><li>“ Going Rogue Inc.” </li></ul><ul><li>We design and market software and applications to make individuals incompetent and unfit for public office. </li></ul>© 2011 Cognition LLP
    8. 8. You Decide to Hire Some Consultants © 2011 Cognition LLP You hire two guys from Destroy a Party Inc., a market leader in the design of political incompetence software.
    9. 9. You Decide to Hire Some Consultants © 2011 Cognition LLP <ul><li>Unless otherwise agreed, default position with a contractor is that the contractor owns the IP </li></ul><ul><li>Ensure you have a written agreement where contractor assigns ALL IP rights to your company (including all derivative rights) and waives moral rights. </li></ul><ul><li>Be careful of disclosing confidential information to consultants, especially trade secrets. </li></ul><ul><li>Ensure that the consultant isn’t really an employee in disguise, or your company will be liable for statutory deductions and fines </li></ul>
    10. 10. You Secure Some Funds and Hire Employees <ul><li>Employment agreements should explicitly reserve IP rights to the employer </li></ul><ul><li>Agreement needs to be signed PRIOR to start of employment </li></ul><ul><li>Some employment agreements may ask an employee to list any pre-existing IP he or she owns </li></ul><ul><li>Ensure that employee doesn’t use any IP appropriated from previous employer </li></ul><ul><li>Watch for Non-competes </li></ul>© 2011 Cognition LLP
    11. 11. Your Software Gets Traction… <ul><li>… and you find an organization that loves the incompetence software and is willing to distribute your product to the mass market </li></ul><ul><li>1 st Step: NDA </li></ul><ul><ul><li>Ensure that it is mutual </li></ul></ul><ul><ul><li>Pay attention to definition of confidential information – does it need to be marked? </li></ul></ul><ul><ul><li>Check to ensure that confidential info is destroyed or returned on termination </li></ul></ul><ul><ul><li>Watch for “residuals” clauses </li></ul></ul>© 2011 Cognition LLP
    12. 12. Your Software Gets Traction… <ul><li>… and you find an organization that loves the incompetence software and is willing to distribute your product to the mass market </li></ul><ul><li>2 nd Step: Commercial Agmt </li></ul><ul><ul><li>Anything customized? Who owns IP? </li></ul></ul><ul><ul><li>Beware IP Indemnities </li></ul></ul><ul><ul><li>Ensure that they are responsible for actions of their own employees and subcontractors in maintaining confidentiality </li></ul></ul>© 2011 Cognition LLP
    13. 13. You’re Ready for Product Release <ul><li>You decide that a great product name for your incompetence software is “ Misunderestimated DX” </li></ul><ul><li>However, a trademark search discloses that W Inc., a giant in the political incompetence industry, already uses the mark “Misunderstimate” </li></ul><ul><li>While W Inc. does not produce software, because it is such a leader in the incompetence space, your product may be confused with their organization. </li></ul>© 2011 Cognition LLP
    14. 14. Trademarks <ul><li>Trademarks: words, logos or symbols that identify your products or services and distinguish them from those of others. </li></ul><ul><li>Should be distinctive and not descriptive or it may be objected to </li></ul><ul><li>Must be in use to maintain registration </li></ul><ul><li>Search www.uspto.gov and www.ic.gc.ca (as well as NUANS search) </li></ul><ul><li>You develop trademark rights just from usage in advertising and selling the related product or service </li></ul><ul><li>Mark any usage with a TM or SM </li></ul><ul><li>Registration is not necessary, but gives you rights across the country, can give indefinite ownership, allows enforcement over social media channels (e.g. Twitter) and provides clearer ownership ® </li></ul><ul><li>Ensure that you develop and enforce trademark usage guidelines </li></ul><ul><li>Registration - $1500 - $2500 plus more for international </li></ul>© 2011 Cognition LLP
    15. 15. You Decide You Need a Patent <ul><li>Everyone is telling you that you need a patent to raise financing. </li></ul><ul><li>You’ve heard that W Inc. has a number of patents how to be incompetent. </li></ul><ul><li>You think you have a unique method to make people incompetent, and don’t want competitors copying your methodology. </li></ul>© 2011 Cognition LLP
    16. 16. Patents <ul><li>A patent is a temporary right, granted by a governmental body, that gives the holder a limited right to exclude others from selling or offering a similar invention. </li></ul><ul><li>The invention has to be useful, novel (i.e. innovative) and non-obvious. </li></ul><ul><li>Typically lasts for 20 years. </li></ul><ul><li>Could take 4-5 years to be granted. </li></ul><ul><li>Can be used for offensive or defensive purposes. </li></ul>© 2011 Cognition LLP
    17. 17. Patents <ul><li>Cost: $10K - $25K, plus $5K+ for each extra country </li></ul><ul><li>Cost of a patent infringement suit: $2M to $5M </li></ul><ul><li>Prior art search: www.uspto.gov </li></ul><ul><li>Don’t always know what has been filed but not yet published </li></ul><ul><li>In US/Canada: one year from disclosure of invention to file for patent. In Europe, you can’t file after invention has been disclosed. </li></ul><ul><li>Canada: first to file. US: first to invent (until March 2013). </li></ul><ul><li>Provisional patent: establishes filing date and gives you 12 months to amend it. Cost: $3K to $5K </li></ul>© 2011 Cognition LLP
    18. 18. Your Company is Growing Rapidly <ul><li>Your developers are stretched thin. Thankfully, there is all kinds of open source code available to help them work faster </li></ul><ul><li>Marketing is on a tear, pushing out YouTube videos and various multimedia campaigns. </li></ul><ul><li>You’ve found a great new image to promote your product. </li></ul>© 2011 Cognition LLP
    19. 19. Copyright <ul><li>Copyright is a form of protection allowing the owner of the rights in a work to prevent others from copying, displaying or performing the work. </li></ul><ul><li>The work must be original. </li></ul><ul><li>Absent a contractual arrangement, the author owns the copyright (an employer is deemed the author of any work created by an employee) </li></ul><ul><li>Registration is not necessary, but can be helpful. </li></ul><ul><li>Use of copyright notice not necessary but helpful: </li></ul><ul><li>(C) [Year of first publication] [Owner] </li></ul>© 2011 Cognition LLP
    20. 20. Copyright <ul><li>Copyright doesn’t protect the idea, but the expression of the idea. </li></ul><ul><li>Open source software is still subject to copyright and must be licensed </li></ul><ul><li>Any music and images used for promotional purposes is likely subject to copyright and must be licensed. </li></ul><ul><li>Century 21 Canada Limited Partnership v. Rogers Communications Inc . – Zoocasa found liable for scraping content from Century 21 website and reproducing it </li></ul>© 2011 Cognition LLP
    21. 21. Thank you. www.cognitionllp.com Rubsun Ho [email_address] 416-348-0313, ext. 102 rubsunho @rubsun

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