This document provides an overview of intellectual property (IP) and key considerations for businesses. It discusses the different types of IP including trademarks, copyrights, patents, confidential information, industrial designs, and personality rights. It then covers topics like choosing business names, hiring employees, incorporating the business, websites and social media, doing business with others, IP litigation, and monetizing IP. The goal is to help businesses understand IP, find and protect their IP, and avoid issues down the road.

2. Overview
By downloading this e-book, you have taken an important step
towards protecting the intellectual property (IP) in your business
and protecting your business from unwelcome IP infringement claims.
Unlike most other introductions to IP that approach the topic as a law professor
would, this practical little guide approaches the topic as a businessperson would. That
is, instead of introducing IP in the form of legal concepts like trademarks, copyrights and
patents, it introduces IP in the form of standard business activities: e.g. naming your business,
incorporating your business, hiring employees, entering agreements with others, selling the business
and so on.
Trademarks:
Business names, product names, logos, and in
some cases shapes, sounds, colours, and even
smells used to distinguish your business
from other trade sources.
Copyright:
Software, website content, manuals, music,
photos, etc.
Patents:
Inventions (machines, devices, drugs, etc.).
Confidential Information:
Customer lists, secret recipes, etc. This can also
include information about managing a business
where individual elements might not be
confidential (e.g. franchising).
Industrial Designs:
A shape of, or a pattern applied to a product.
Personality Rights:
Rights in a person’s image or voice, etc.
Every business, no matter how big or small, owns IP. Its IP is often its most valuable set of assets. The IP in a
business includes its name and the brand names of its products and services. It includes the creative
output of its employees. And it includes the information that it has accumulated over years of operation,
including proprietary customer lists, systems and methodologies.
Our goal is to help you understand what IP is, where to find it and what to do with it. That includes creating
IP in your business through branding and innovation; securing ownership of IP through contracts; managing,
administering and registering your IP; enforcing rights in your IP against others; monetizing your IP through
licensing and sale; and minimizing the risks of infringing others’ IP and defending against allegations of
infringement.
The most important takeaway from this guide is not how to distinguish a trademark from a copyright or
a patent but rather how to think about IP early on in your business so you can avoid disruptions or missed
opportunities down the road.
Types of IP
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3. Choosing the Right Business
Names and Product Names
Here are some of the key Legal factors to consider when choosing
a name for a business, product or service.
Clearance / Availability:
Choose a name that will not infringe existing trademark rights.
Trademark law prohibits the use of trademarks that are confusingly
similar to trademarks that were previously used by another. It is
always a good idea to investigate the use of similar trademarks
in your industry before adopting a trademark.
Protect-ability / Register-ability:
A trademark must be distinctive of a single trade source (e.g.
PEPSI). It can be suggestive, but not descriptive (or mis-descriptive)
or laudatory (e.g. THE BEST).
Protecting a Trademark
Use – Trademark rights (i.e. rights to exclude others from
using the same, or a similar name) are acquired through use
or registration. Consistent use in commerce is required to
maintain trademark rights – “Use it or lose it”.
Register – Registration gives you the right to exclude others
from using or registering a similar name with similar products
or services anywhere in Canada and is a powerful weapon
in litigation. Budget $1800 to $2300 to cover all anticipated
services for a straightforward application from filing
through registration.
Enforce – Trademark rights only exist so long as the trademark
is distinctive. So they need to be ”policed”. This requires you
to take steps to prevent others from using your trademark or a
confusingly similar trademark whether they pose a competitive
threat to you or not.
“Intellectual property is
harder to recognize than a tangible
asset like a vehicle. And it’s harder to
maintain and to prevent from being stolen.”
– John Simpson, Principal of Shift Law
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4. Hiring
Intellectual property is typically created by employees and contractors.
Here are some important IP issues to think about when hiring employees, contractors or consultants:
Will they be creating IP for the business? (e.g. websites, social media accounts, software, catalogues,
inventions, product designs, etc.)
• Contractual terms may be needed to assign rights in the IP they create, to you the employer – before they
start (and sometimes after they create it).
• Copyright law treats employees and independent contractors differently. Like tax law it looks to what
they are – not just what they are called.
How much do they need to know about the business to do their job?
• Do not share more about how the business works than is necessary – especially with non-employees.
• Use Non-Disclosure Agreements (NDAs) that clearly identify what is considered confidential.
• Treat proprietary information as confidential: write it down, mark “Confidential”, etc.
What IP are they bringing to the job?
• Ensure that the employee/contractor/consultant/partner has rights to use and disclose the IP that they
bring to the job (e.g. photographs used by third party website developer, software codes used by
programmer, customer database brought over by new employee or business partner etc.).
What IP are they leaving with?
• Make sure that all IP remains with the operator of the business (e.g. corporation or partnership) when an
employee leaves, especially, founders and partners.
• IP should never be controlled by or registered to an individual (unless it’s a sole proprietorship) or a
group or an unincorporated group of individuals.
Incorporating
Make sure that all IP owned by the sole proprietor or other individuals
prior to incorporation (e.g. trade name, brand names, domain names,
rights in NDAs, inventorship rights and licenses, etc.) is assigned
to the corporation as soon as possible.
If the corporation does not own the IP (even if it is authorized
to use it) it may not have rights to enforce against others
– or worse: rights in a trademark may disappear
altogether if the trademark is not used by
its owner.
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5. Websites and Social Media
Register domain names with other gTLDs (.ca, .com, .biz, .net, etc.) and social networks – pro-active
prevention against infringing use and cybersquatting.
Clear rights in all website content (photos, copy, layout) with the source (e.g. the developer,
website consultant).
Shelter your business from exposure to infringement liability as much as possible through contracts
and Terms of Use (to developer, and to users for user generated content).
It is easy to find and hard to hide infringing content on the web (stock photos, text, personal images)
and the consequences of infringement can be serious - $$$.
Doing Business With Others
Business partnerships can have tremendous advantages. Ideally, you and your partner have similar visions
for the business and access to different strengths that contribute to a common objective.
If you are both aligned and have a shared passion, it may seem unlikely that your interests could diverge.
In any case, it’s essential to define in writing how you plan to manage your partnership and the intellectual
property that results. Here are some points to keep in mind when doing business with others.
Do not disclose more information about your business than is necessary.
Where necessary, use NDAs.
Do not let others use your trademark without expressed written terms giving you control over its use
(otherwise, rights to enforce against others may be lost).
Ensure that they own rights in the IP that they bring into the relationship and that you will not be liable
if they infringe third party IP rights.
Clarify in writing who owns IP created in the relationship when the relationship is over.
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6. IP Litigation
If someone is infringing your IP rights, your best response will depend on a number of factors that an experienced
IP lawyer can discuss with you. It is often best to start by having your lawyer send the infringer a cease-and-desist
letter (or “demand letter”) requesting that they stop their infringing activities or face legal consequences.
A good demand letter will set out in clear terms your demands, the factual and legal basis for your demands
and the factual and legal basis for a lawsuit if the infringer does not comply with those demands. The letter
should detail the rights that the infringer has violated, how you acquired those rights and any damages that
may result from the infringement.
If a demand letter does not yield the desired result, it may be necessary to commence an infringement action.
Most actions settle early on. But if it goes all the way, an action will typically take 2 to 3 years or more to proceed
to trial.
There are other procedural options that will lead to a determination of the dispute before going all the way to
trial. There are strategic implications that come with each of these options that are important to discuss with an
experience IP litigation lawyer.
Questions?
Do you have questions about intellectual property and what it means for your
business? Call us at (647) 361-7533 or send us a note here and we’ll get back to
you within one business day.
About Shift Law
Shift Law is a highly regarded intellectual property and IP litigation boutique. We combine in-depth experience
in trademark and copyright law with a highly accessible, nimble and creative approach to provide our clients
with solid strategic advice, practical solutions and smart, aggressive representation when they need it.
Monetizing your IP
A company’s ability to innovate, compete, and grow sustainably depends on the development of intellectual
property assets. Assets like these can also be leveraged to generate additional revenue, thereby strengthening
profits and reducing risks.
IP can be sold and, in some cases, it can be used as security when borrowing money.
A small business’s IP is often its most valuable asset (and a large portion of the value of the business
as a whole).
It is Important to document and keep track of IP (including rights to use others’ IP under license
– e.g. software licenses) – this can be done through a formal IP audit.
Investors, purchasers, and lenders typically require a “paper trail” connecting all IP associated with the
business to its owner – important to avoid surprises.
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