Protecting your intellectual property

When you think about your company’s assets, the most obvious are the physical ones, such as inventory, machinery, land and buildings. But there’s another kind of asset that’s potentially much more valuable and important for the success of your business. These are your intangible assets, which include everything from your reputation to all the output from the “mind” of your company—in other words, your IP. 

IP is called “property” because you can own it, and your ownership gives you various rights as to who can use it, and how. It includes ideas and “creations of the mind,” which is a common definition of IP. Some examples are:

• inventions
• process improvements
• brand identifiers such as logos
• original literary and artistic creations
• software with original code you wrote
• unique designs your company developed

Your IP can have a significant monetary value attached to it and can be licensed or sold around the world, help you attract investors, provide collateral for loans, help you stand out among your competitors and ultimately drive your company’s growth.

This is why you need to secure your IP against misuse or theft by other parties. To do this, you can legally protect your company’s IP rights by registering your ownership in the markets where you do business. Until you do so, your IP (except for copyrights, as described later) is unprotected and your competitors or anyone else can do whatever they like with it.

Given all this, being aware of your IP rights and the need to protect them should be an important part of your international expansion plans. 

Given that your IP can be a valuable asset, it’s simply good risk management to protect it through formal registration. This provides several important benefits:

• Brand building
  Brand building is one of the most important benefits of IP protection. Through your patents, proprietary technology, trademarks and other forms of IP, you can create a unique brand and establish your customers’ trust in what it stands for. This will help you differentiate your products and services from those of your competitors, which is an important tool for building a successful business.
  
  
• Infringement prevention
  Since no one can legally use your registered IP without your permission, you can more easily prevent competitors from infringing on your IP rights. If they do, you have the means to stop them and be recompensed for any losses your business suffered.
  
  
• Creation of new revenue streams
  You can leverage the value of your IP to create new revenue streams. For example, you can generate income by licensing another company to use a patent or a design in markets that you don’t plan to enter.
  
  
• Access to financing
  You can use the value of your IP as collateral to obtain financing from your bank or other institution. This can be especially useful for smaller companies that need cash to grow and develop.
  
  
• Attracting investment
  Your IP’s value can attract investors with deeper pockets than your own. Again, this can help a smaller business or a startup to obtain cash for R&D and other purposes.
  
  
• Finding a business incubator
  Formally securing your IP can be a factor in obtaining the help of a business incubator. Toronto’s MaRS Discovery District, for example, offers services that provide business and management training as well as links to strategic partners and potential investors.
  
  

So, is it worth taking the trouble to protect your IP? In a word, yes. A growing body of research shows that companies that stake out their IP rights early in their existence, and are good at generating and maintaining new IP, do better than companies with less IP activity or fewer IP assets. According to a Statistics Canada survey released in February 2021,

• About one-fifth of Canadian businesses (18.2%) reported that they owned at least one type of IP during the period 2017–2019. This included IP owned outside Canada.
• More than half of businesses that owned IP credited it with improving their success in some capacity.
• The most commonly cited benefit was the increased value that IP brought to businesses (38.7%), such as competitive advantages, reputation and goodwill.
• Other reported benefits included increased revenues (31.1%), strengthened long-term business prospects (29.7%), and expanded markets (25.8%).

These numbers reflect the hard work that companies do to turn their ideas into tangible assets. Recent research by Ocean Tomo, the Intellectual Capital Merchant Banc, indicates that more than 90% of some companies’ market value can come from intangible assets such as brands, hardware designs, software apps, new pharmaceuticals and so on. ​

Since new and unique IP can become one of your most valuable assets, it’s important to understand how you can claim ownership of the IP you have created. For more information, refer to Prove who owns new ideas and creations on CIPO’s website.

You should also be sure to build an IP strategy into your business plan. This will help you use your IP to achieve your business objectives. For more information, visit Build an intellectual property strategy, Get new intellectual property rights in Canada and Protect IP outside Canada, all on the CIPO website.

Having established why your IP and protecting it are so important, let’s look at the types of asset you may need to protect. (The following list is based on the categories defined by CIPO).

Patents

A patent protects new, useful and non-obvious inventions, as well as improvements made to existing technology. Processes, machines, products and chemical compositions are examples of things that may be patented.

To be patentable, an invention must meet these criteria:

• New: It has to be the first of its kind in the world
• Useful: It must both work and have a worthwhile purpose
• Non-obvious: A skilled person in the trade should recognize it as a non-obvious development

A patent grants you the right to exclude others from making, using or selling the invention in the country where your patent was granted. A Canadian patent protects you for up to 20 years from the filing date. It’s not renewable.

Trademarks

Trademarks protect your brand. They identify your business, your goods and your services and distinguish them from those of your competitors. They can consist of one or many words, designs, tastes, textures, moving images, modes of packaging, holograms, sounds, scents, three-dimensional shapes, colours or any combination of these.

A registered trademark gives you the exclusive right to use the trademark in association with your products and services in Canada for up to 10 years from the registration date. Trademarks are renewable every 10 years.

Industrial designs

Industrial designs are about how something looks and how it appeals to the eye. More exactly, protecting a product’s unique appearance doesn’t depend on what it’s made of, how it’s made or how it works. Instead, registering the design is intended to protect the object’s shape, configuration, pattern or ornament, or any combination of these features.

In Canada, a registered industrial design gives you the exclusive right to use the design for up to 15 years. 

Copyright

A copyright prevents others from reproducing, publishing or performing your original works. It protects many forms of creative and original expression, including literary and dramatic works, artistic creations such as photographs, paintings, sculptures and musical works. It also protects computer programs and software, performances, sound recordings and communication signals. 

Note that unlike most other forms of IP, such a work is automatically copyrighted even if it isn’t registered. Registering the copyright is always a good idea as this increases the work’s security if someone challenges its ownership. In Canada, copyright protects a work for the life of the creator plus 50 years after his or her death.

Integrated Circuit Topographies (ICTs)

ICTs refer to the three-dimensional configurations of electronic circuits embodied in integrated circuit products or layout designs. In Canada, registration protects the original design of a registered topography whether it’s represented in an integrated circuit product or not. The protection lasts for up to 10 years. 

Trade secrets

This kind of IP can be almost anything that derives its value from secrecy. It can include such things as unpatented technology, formulas, recipes, methods and processes, and customer and supplier lists. As long as the secret is maintained, the IP is yours and yours alone. The Coca-Cola recipe, for example has been under wraps for more than a century.

The value of this form of IP depends completely on keeping it secret—there are no domestic or international registries for it. You have to secure it yourself, by means such as non-disclosure and confidentiality agreements, encryption, password protection or simply by locking it up physically.

CIPO provides a wide range of information about managing and protecting your IP. For example, you can learn how to:

• Build an intellectual property strategy
• Protect new ideas and creations
• Get new intellectual property rights in Canada
• Protect IP outside Canada
• Prove who owns new ideas and creations
• Stopping intellectual property theft
• Maintain a list of intellectual property
• Get financing and loans for your IP needs
• Assess the value of your IP assets