Intellectual property for small businesses in Canada

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How can you protect your small business’ intellectual property in Canada?

Let’s discuss the main ways you can protect your IP. These are: patents, copyright, trademarks, industrial design patents, integrated circuit topographies, and trade secrets.

Patent

Patents are needed for new gadgets, processes, apparatuses, products, or compositions of matter that haven’t had any previous exposure to the world. To patent an invention, it has to be the first of its kind in the world, be useful and not obvious to someone familiar with that area of expertise.

You can’t patent for an idea, an abstract theorem, a method of doing business, a medical treatment or a computer program.

A patent gives you the exclusive right to produce, manufacture, use and sell the product. However, you’ll also have to disclose all information about the design to the world. You can also patent an improvement or a refinement to a product, but you’ll have to disclose design information here too.

Copyright

Copyright covers any creative work of expression (literary books/leaflets/periodicals, lectures/sermons, artistic, musical, dramatic, databases, computer programs or sound/video recording), and lasts the lifetime of the artist plus 50 years. This gives you the right to control and the right to be paid royalties.

Trademark

A trademark protects an identifying mark for 15 years once registered with Strategis Canada. However, the trademark can be renewed after the 15 year period. A trademark can be obtained for anything used to distinguish you from a competitor, like a word, phrase, logo, picture, shape, design, certification mark, or even the shape of words. With this protection, nothing confusingly similar can be used legally. However, depending on your success, it may be possible to lose your trademark name. For example, Zipper, Kleenex, Band-Aid and Xerox aren’t trade names anymore because they’ve become generic household names.

Industrial design

Industrial design can cover unique ideas, features, patterns, configurations, shapes, or ornaments of an object and is protected for 10 years. The design is usually an article made by tools, machines or hand. For example, the shape of a Coca-Cola bottle or of a snowboard are both industrial designs.

Integrated circuit topographies

Integrated circuit topographies (computer chips, microchips or semiconductor chips) are protected for 10 years. You can protect against reproduction, manufacturing, importation or exploitation of an integrated circuit.

Trade secret

A trade secret is a piece of knowledge that isn’t published and is kept confidential. Some examples of trade secrets are the formula for Silly Putty, a company’s customer lists and the recipe for Kentucky Fried Chicken. Non-disclosure agreements or non-compete contracts are signed to keep these secrets a secret, and anyone could be sued for all potential damages if they have loose lips. Trade secrets never expire.

Any of these intellectual properties can be licensed instead of registered by you. In this case, you may not have enough money to register the property and you may give the right to another person or company to manufacture or sell your invention in exchange for royalties. In fact, this is done quite often. Some people also share their patents and discoveries with others to further research and design activities.

Visit the Canadian Intellectual Property Office’s website for more info on intellectual property in Canada.

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Entrepreneurs: Don’t get sued

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When it comes to small business rules, regs and legalities in Canada, it can be confusing to know where to even begin to stay compliant. Thankfully, we’ve helped thousands of Canadian entrepreneurs stay on top of all the paperwork required to run a small business.

Permits and Licenses

As a business owner, it’s important to make sure from day one that you have all of the required licenses in place before opening your doors. Without them, you could be facing some pretty hefty fines. A license signifies that you are permitted to operate in your area, while a permit is a document that shows proof of compliance with certain laws. The permits and licenses that are required for your company will not only vary by industry, but also by city and province. You may require a municipal and provincial license to operate your business. Most businesses need a license of some sort to operate. License fees are required, so be sure to budget for this, especially for signs and company vehicles.

Industry Canada runs an online service called BizPal which helps you find the licenses required for your operation within particular areas of Canada. You may also be required to contact local authorities like Development and Building Approvals, Health Services, Fire Department, Gaming and Liquor Commission, Police Services, and Motor Vehicle Industry.

Business Number (BN)

A business number (BN) is something you’ll need for GST/HST, payroll, corporate income tax, import/export or other (registered charity, excise tax, excise duty, insurance premium tax, or air travellers security charge) business accounts with the Canada Revenue Agency. When registering your business, you will be assigned a business number. This business number will have 15 digits, consisting of two parts: the registration number and the account identifier. Your account identifier may be either RT (GST/HST), RP (Payroll Deductions), RC (Corporate Income Tax), or RM (Import/Export) and will be followed by a 4-digit account reference number. You’ll need your business number when making payments or enquiries related to your account. While the whole thing might sound complicated now, registering for your business number is easy — it can be done by phone, internet, fax or mail.

Rules and Regulations

Some of the most important regulations you’ll need to follow will be the local bylaws that may affect your business operations. Examples include smoking bylaws and alarm system bylaws. Bylaws may be updated and renewed often, so keep up to date on this information. For details about the regulations of your area, contact your provincial, town or rural municipal office.

Other regulations that must be followed include land use, zoning and building regulations. Be sure that your company complies with zoning and building regulations before committing to any land use or renting. Zoning is actually often a prerequisite to licence applications. Watch for any additional taxes you may have to pay for your business, including a business tax for companies operating in their own facilities. The Government of Canada provides some excellent guides to starting specific types of businesses, including many of the required rules and regulations, on their website.

Product or Service Liability

Product or service liability refers to the extent to which your company is obligated to make compensation to your customers for loss related to personal injury, property damage or other harm caused by the product or service that you offer. Things that you could be liable for include negligent packaging or product design; failure of the product to be safely used for the purpose it was intended for; environmental damage; failure to adequately warn against misuse; or inadequate product or service testing. Service companies can experience liability due to failure to fulfill requirements or inadequate performance. Be sure to speak with a lawyer to develop strategies to protect yourself from potential lawsuits. Insurance policies often include a general liability policy that can help protect your company.

More about government compliance

For more info on things you’ll need to keep things above board, check out our online small business training, and these blog posts:

Types of business insurance

Intellectual property protection for small businesses

What you can do about small business fraud

Small business legal issues: Tips from entrepreneurs

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What’s an industrial design patent?

industrial-design-patentIndustrial design patents can cover unique ideas, features, patterns, configurations, shapes, or ornaments of an object, and is protected for 10 years. The design is usually an article made by tools, machines, or hand.

For example, the shape of a Coca-Cola bottle or of a snowboard are both industrial designs. Basically, an industrial design patent covers the way a product looks. It can cover the shape of an object, as well as 2D features like its colour or its patterns.

Registering an industrial design patent

You must register your industrial design within 12 months of publication, so it’s protected against imitation. To register an industrial design patent, you need to submit an application form with a photo or drawing of your property, followed by an assessment. This process can take up to a year, due to the amendments and additional information that might be needed, and usually costs around $400. The maintenance of the registration fee, however, can cost around $350.

To show you’ve got an industrial design patent, you can use a capital “D” inside a circle on the object in question, followed by your name.

You can read more about industrial designs at the Canadian Intellectual Property Office’s website.

Further reading about intellectual property:

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How to get copyright and trademark protection for your small business

Last week, we talked about how Canadian entrepreneurs can obtain a patent. This week, we’ll help you get copyright and trademark protection (you can learn about what exactly copyright and trademarks are here).

How to get a copyright in Canada

Informal copyright exists as soon as a song is sung or something is written down — in other words, as soon as it’s created. To mark the creation of a song, for example, people often will send themselves a copy of the song in the mail, keeping the envelope unopened. The date stamp on the postmark is proof of the date the letter was sent, and therefore proof of copyright. Formal registration is performed through constructive notice, which lets you claim statutory damages up to $20,000 for any copyright infringement.

The application process involves sending a completed form to CIPO’s Copyright Office, with a fee of $50 to $65. You might need to send copies of your work to the National Library of Canada. This process usually takes about four weeks. To show that you have copyright protection, you may use the copyright symbol: ©. You’ll be protected against the copying, reproduction, publishing and performing of your creative work. Once you get it, your registered copyright protects you in most other countries of the world.

How to get a trademark in Canada

We have some good news — the process for registering a trademark is way more simple than the process of getting a patent. You may want to hire an agent to help you with the process. To register your trademark, do your research to make sure nothing similar is already in use. You can do this on the Canadian Intellectual Property Office (CIPO) website.

If it’s all clear, your next step is to file an application to be published in CIPO’s Trade-marks Journal to see if anyone opposes it. The process usually takes about a year to get registered and costs around $450 to $500. Once registered, your trademark will be protected in Canada. You can show your trademark registration through the use of the following symbols: TM, ®.

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How to get a patent in Canada

small_business_patentIf you’re ready to get a patent, the first thing you should do is find an agent to help you to get your invention ready for the patent process. Be sure the agent you hire is registered with the Patent Office.

Next, do research to see if any patents already exist for an invention similar to yours, which can be done on the Canadian Intellectual Property Office (CIPO) website. If there’s nothing similar, you’re free to apply for a patent! You need to provide a summary of the invention, a complete description of the invention and its purpose, and drawings of your invention.

Then, your application must be filed within one year of any use or disclosure of the invention. Once you’ve begun filing for a patent with CIPO, you get a “patent pending” title, which lets you begin production before actually getting the patent. If the patent is accepted, you’ll pay an annual fee from $0 to $225.

With all of these fun legal fees, plus the registration and application fees, the whole process can cost upwards of $15,000 (and that’s just if you want to patent in Canada). Also, you must formally request an examination and pay an additional fee to request that the patent be granted. This process can take up to three years to complete, and the patent could still be rejected. If it does get rejected, you can file an amendment letter with the Commissioner of Patents to have your patent reconsidered.

What does all the paperwork and fees get you?

With a patent, you get 20 years of monopoly with your invention. However, patents are not renewable. Once those 20 years are up, the patent falls into the public domain, which means anyone can produce and sell your design. If you have patents internationally too, you must register again in each individual country.

One thing to keep in mind: with your design information available to anyone, there’s a chance that someone could copy your design, make a few tweaks and develop a similar product even before the 20 years of your patent are up. However, you can sue for patent infringement if someone has copied your patent directly.

If the lengthy process and disclosure requirements don’t have you reconsidering the advantages of getting a patent,they can also be incredibly expensive to defend and are usually less effective at protecting intellectual property than most other options, especially for technology. Check out last week’s blog post on intellectual property protection for small businesses to find out more.

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