Intellectual Property Rights

At the outset, a business person must carefully formulate and consider business plans and goals in order to determine whether it is necessary to create or otherwise acquire intellectual property rights. Of course, making such a determination is impossible unless one understands the nature and extent of the various intellectual property rights. Such an understanding is essential to determining whether the creation or acquisition of certain intellectual property rights will enhance or facilitate realization of the business goals. The following is a very brief discussion of the nature and extent of protection of the more common types of intellectual property rights, namely trademark, copyright, industrial design, and patent.

Trademarks

A trademark is a mark used by a trader to distinguish his/her wares and/or services from the wares and/or services of others in the marketplace. A trademark usually appears on wares, their labels or packaging, or is displayed in the provision or advertisement of services. Note that a trade name should be distinguished from a trademark. A trade name is the name under which a particular business is carried on by an individual, partnership or company. It may be the corporate name of the company carrying on the business. A trade name may or may not function as a trademark.

A trademark is often one of the most valuable assets of its owner’s business. Also, the right to use a particular trademark is often one of the most valuable rights which a trademark owner has to offer potential licensees and franchisees. As a trademark functions as an identification badge, so to speak, it can be a powerful attractant, useful in generating business. Consequently, a great deal of the goodwill of a business is often attributed to the trademark.

Rights in a trademark are generally created through use of the trademark in association with wares or services. In general, it is the first person to use a trademark in Canada who is entitled to register it and obtain exclusive rights, although it is possible to file a trademark application in Canada based on an intention to use the trademark or the existence of a corresponding foreign trademark registration or application and, thereby, establish priority.

It is not necessary to register a trademark in order to use it, but registration carries with it a number of important advantages.

The owner of valid and enforceable trademark rights has the exclusive right to the use of the trademark across Canada, if it is registered, and in the area wherein the owner enjoys an established goodwill or reputation in the trademark, if it is unregistered. These rights may be enforced by way of the common law tort of passing off, the  codification of such tort in s. 7 of the Trademarks Act and, if the trademark is registered, by a trademark infringement suit pursuant to ss. 19, 20 and 22(1) of the  Trademarks Act.

To take advantage of the rights afforded to registered trademarks under the Trademarks Act, a trademark registration must be renewed (by the payment of a renewal fee) every 15 years. Also, registered trademark rights are not available if the registration is expunged for non-use pursuant to s. 45, if the registration is expunged for invalidity pursuant to ss. 18 and 57 or if the registration is found to be invalid pursuant to s. 18. Trademark rights at common law exist so long as the trademark remains valid (i.e., it is properly and continually used by its owner and remains distinctive).

Copyright

Copyright, in its simplest terms, is the exclusive right of the owner of an original work to control the copying of that work.

Various types of “works” can be the subject of copyright protection, including artistic works, literary works, musical works, dramatic works, choreographic works, collective works, software programs, etc.

Copyright includes the exclusive right to produce, reproduce, perform, publish, translate, convert, adapt, publicly present, record or broadcast the work or any substantial part of it. The owner of copyright in a work may by law prevent anyone else from doing any of the foregoing. Section 3(1) of the Copyright Act contains a complete listing of the various rights that comprise copyright.

The rights set forth in s. 3(1) are restricted in a number of instances. For example, there are opportunities under the Copyright Act to obtain compulsory licences in the event that the author has died (s. 15) or in the event that a book has not been printed in Canada or is not in supply to
meet the Canadian demand (s. 16).

Generally speaking, copyright does not extend to the idea or basic subject underlying the work but only to the author’s particular expression of that idea. Thus, anyone may photograph or paint a picture of the Lions Gate Bridge, for example, but must not copy someone else’s photograph or painting of the famous site. Likewise, anyone is free to write a software program for maintaining and generating all documents necessary to run a fundraising campaign, but he/she must not copy someone else’s software program.

Copyright also does not apply to transient occurrences such as a live performance event, although a visual/sound recording or broadcast of the event would be protected. Additionally, copyright generally does not apply to titles, names, slogans, or other short word combinations.

There is no common law copyright in Canada. Copyright is governed entirely by the Copyright Act. Pursuant to the Copyright Act, copyright arises automatically in Canada and registration is not necessary. However, there are certain advantages to obtaining a copyright registration.

In most cases, copyright in a work, whether registered or unregistered, subsists for the lifetime of the author, the remainder of the calendar year in which the author dies plus a period of 50 years following the end of that calendar year.

Industrial Designs

An industrial design may be any feature of shape, configuration, pattern or ornament, or any combination of those features that, in a finished article, appeals to and is judged solely by the eye. For example, industrial design registrations may be obtained for the shape, configuration, pattern or ornament applied to furniture, household utensils, toys, vehicles, etc. or patterns or ornamentation applied to fabric. It is important to note that no industrial design protection is available for features applied to a useful article that are dictated solely by a utilitarian function of the article or for methods or principles of manufacture or construction.

The industrial design, a blending of the artistic and the utilitarian, has always existed somewhere between the world of patents and the world of copyright, sharing features of each. Like a patent, an industrial design registration provides an absolute monopoly. That is, independent creation is not a defence to infringement of an industrial design registration as it is in the case of copyright infringement. The standard of originality required for a valid design registration is closer to thecopyright standard for originality than the patent requirement for invention. The boundary between patent and design has never been a battleground-a product or article can clearly enjoy concurrent design and patent protection. The two forms of protection ate complementary. On the other hand, the interface between copyright and industrial design is complex and, at times, problematic.

An individual artistic creation, such as a statue or sculpture, not reproduced more than 50 times, is protectible under the Copyright Act and need not be made the subject of an industrial design registration.

Industrial design rights do not exist at common law and arise only upon the registration of an industrial design pursuant to the Industrial Design Act. Furthermore, industrial design protection cannot arise unless an application to register the design is filed in the Canadian Industrial Design Office within one year after publication of the design. “Publication” includes the public use or sale of an article displaying, bearing or embodying the industrial design.

The right granted by an industrial design registration is an exclusive right somewhat akin to that of a patent for an invention. There are some distinctions, however, that may be significant in the event that enforcement of the right by lawsuit is contemplated. Before commencing a lawsuit for industrial design infringement, intellectual property counsel should be consulted. Section II (I) of the Industrial Design Act prohibits the making, importing for the purpose of business or trade, selling, renting, or offering or exposing for sale or rent, any article in respect of which the design is registered and to which the design is applied, without the permission of the owner of the design. An industrial design registration protects not only the specific design registered but also any design not differing substantially therefrom.

Industrial designs registered after January 1, 1994 have a 10-year term, but a maintenance fee is due after five years to keep the registration in good standing.

Patents

A patent is a statutory, limited monopolistic right which enables its owner to legally exclude others from making, selling or using the invention claimed in the patent.

Patent rights do not exist at common law and flow solely from the granting of a patent pursuant to the Patent Act.

Section 2 of the Patent Act defines an invention as “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.” Most novel, useful and non-obvious products, processes and apparatus involve subject matter that could qualify as an invention. There are some exceptions, however, to what constitutes patentable subject matter. Such subject matter exceptions tend to differ between jurisdictions.

In addition to being patentable subject matter, a patentable invention must be useful, novel and non-obvious.

In most countries, a patent cannot be obtained if the technology has been previously sold, used or publicly disclosed or if the technology would be obvious to a person skilled in the field based on publicly available information. In such instances, the technology would lack novelty or would be considered obvious and, consequently, would not qualify as an invention. It is still possible to obtain a valid Canadian patent if all prior public disclosure arose directly or indirectly from the inventor and occurred less than one year prior to’ the filing date of the Canadian application. A similar one year grace period applies under U.S. patent law.

As mentioned above, a patent gives the owner the right to prevent others from making, selling or using the claimed invention (i.e., infringing the patent) by suing the infringer for damages or an accounting of profits. Ownership of a patent does not necessarily entitle the patent owner to make, sell or use his or her own invention.

For patents arising out of applications filed before October 1, 1989, the term of patent protection is 17 years from the date of grant. For applications filed on or after October 1, 1989, the patent term is 20 years from the application date. In Canada annual maintenance fees are required for patent applications and patents, commencing on the second anniversary of the application filing date.

The above information is subject to copyright and was extracted from a CLE BC presentation made at Vancouver, B.C. in April, 2005. The said information does not constitute legal advice and must not be used as a substitute for the advice of a lawyer qualified to give advice in the particular area(s) of law to which such materials relate.