intellectual primer for small business oct 2011

Enterprise Toronto Small Business Forum

Intellectual Property: A Primer for Small BusinessesPresented by:Rubsun Ho

[email protected] @rubsun

October 18, 2011

© 2011 Cognition LLP

What’s a legal session without a disclaimer?

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.


About Cognition

Founded in recognition of the fact that traditional legal services model was too expensive for startups and growth companies

Virtual model means lower overhead and lower rates

Former In House lawyers (e.g. Canadian Tire, RIM, Nortel, Sun Microsystems, etc.) who also practiced on Bay St (e.g. Gowlings, Stikemans, Oslers)

32 lawyers in Toronto & Ottawa


Intellectual PropertyA 15 Minute Overview Employment and Contractor Issues Contractual Relationships Trademarks Patents Copyright


You Have an Idea...

“A couple of friends and I are going to develop some software in our free time”

“I can’t quit my job because I’ll still need the income while we get our software off

the ground”


IP Issues in Employment

One of the first due diligence checks is to examine the chain of IP ownership

Generally, an employer owns IP created by an employee in course of employment

Copyright Act says copyright created by employee in the course of employment is owned by employer

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”

Don’t burn any bridges with old employer – you may need their signoff in the future


You Decide to Incorporate

“Going Rogue Inc.”

We design and market software and applications to make individuals

incompetent and unfit for public office.


You Decide to Hire Some Consultants

You hire two guys from Destroy a Party Inc., a market leader in the design of

political incompetence software.


You Decide to Hire Some Consultants

Unless otherwise agreed, default position with a contractor is that the contractor owns the IP

Ensure you have a written agreement where contractor assigns ALL IP rights to your company (including all derivative rights) and waives moral rights.

Be careful of disclosing confidential information to consultants, especially trade secrets.

Ensure that the consultant isn’t really an employee in disguise, or your company will be liable for statutory deductions and fines

You Secure Some Funds and

Hire Employees


Employment agreements should explicitly reserve IP rights to the employer

Agreement needs to be signed PRIOR to start of employment

Some employment agreements may ask an employee to list any pre-existing IP he or she owns

Ensure that employee doesn’t use any IP appropriated from previous employer

Watch for Non-competes


Your Software Gets Traction…

…and you find an organization that loves the incompetence software and is willing to distribute your product to the mass market

1st Step: NDA Ensure that it is mutual Pay attention to definition of

confidential information – does it need to be marked?

Check to ensure that confidential info is destroyed or returned on termination

Watch for “residuals” clauses


Your Software Gets Traction…

…and you find an organization that loves the incompetence software and is willing to distribute your product to the mass market

2nd Step: Commercial Agmt Anything customized? Who owns IP? Beware IP Indemnities Ensure that they are responsible for

actions of their own employees and subcontractors in maintaining confidentiality


You’re Ready for Product Release

You decide that a great product name for your incompetence software is “Misunderestimated DX”

However, a trademark search discloses that W Inc., a giant in the political incompetence industry, already uses the

mark “Misunderstimate”

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.


Trademarks

Trademarks: words, logos or symbols that identify your products or services and distinguish them from those of others.

Should be distinctive and not descriptive or it may be objected to

Must be in use to maintain registration Search www.uspto.gov and www.ic.gc.ca (as well as NUANS

search) You develop trademark rights just from usage in advertising and

selling the related product or service Mark any usage with a TM or SM

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 ®

Ensure that you develop and enforce trademark usage guidelines

Registration - $1500 - $2500 plus more for international


You Decide You Need a Patent

Everyone is telling you that you need a patent to raise financing.

You’ve heard that W Inc. has a number of patents how to be incompetent.

You think you have a unique method to make people incompetent, and don’t

want competitors copying your methodology.


Patents

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.

The invention has to be useful, novel (i.e. innovative) and non-obvious.

Typically lasts for 20 years. Could take 4-5 years to be granted. Can be used for offensive or defensive

purposes.


Patents

Cost: $10K - $25K, plus $5K+ for each extra country

Cost of a patent infringement suit: $2M to $5M Prior art search: www.uspto.gov Don’t always know what has been filed but not yet

published In US/Canada: one year from disclosure of invention

to file for patent. In Europe, you can’t file after invention has been disclosed.

Canada: first to file. US: first to invent (until March 2013).

Provisional patent: establishes filing date and gives you 12 months to amend it. Cost: $3K to $5K


Your Company is Growing Rapidly Your developers are stretched thin.

Thankfully, there is all kinds of open source code available to help them work faster

Marketing is on a tear, pushing out YouTube videos and various multimedia campaigns.

You’ve found a great new image to promote your product.


Copyright

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.

The work must be original. Absent a contractual arrangement, the author

owns the copyright (an employer is deemed the author of any work created by an employee)

Registration is not necessary, but can be helpful. Use of copyright notice not necessary but helpful:

(C) [Year of first publication] [Owner]


Copyright

Copyright doesn’t protect the idea, but the expression of the idea.

Open source software is still subject to copyright and must be licensed

Any music and images used for promotional purposes is likely subject to copyright and must be licensed.

Century 21 Canada Limited Partnership v. Rogers Communications Inc. – Zoocasa found liable for scraping content from Century 21 website and reproducing it

Thank you.www.cognitionllp.com

Rubsun [email protected], ext. 102 rubsunho @rubsun

intellectual primer for small business oct 2011

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