Intellectual Property Law in Canada

Introduction: What is Intellectual Property?

Intellectual property rights are rights in things that you create with your mind.  Most property rights protect physical things: if you buy a book, you own it as a physical object.  But the book as a literary work is separate from the physical object, and the author needs to have some way to protect his or her rights in that literary work.  That is why intellectual property rights were created: so people can protect, and profit from, the creations of their intellect and imagination.

If you have created something, the question becomes: what type of protection is available for this creation, and if more than one form of legal protection is available, what is the best one to choose?  This primer will give a brief summary of each of the major types of intellectual property rights, and help explain which types of creations they apply to, and what kind of protections they provide in Canada.

Copyright

Copyright is the right to copy or reproduce a work, performance, or recording.  If you write a book, you generally have the right to say how and when and where it can be published, and how the material in the book can be used.  The protection provided by copyright allows you to stop anyone else from copying your work, to be compensated for any profits you lose due to such copying, and to keep others from making unauthorized changes to your creative work.

In Canada, copyright is created by the Copyright Act.  Copyright only applies once the work is fixed in a tangible form.  You cannot have copyright over a story if it is just in your head, or if you have only told it orally; but once it is written down, or recorded, it is a fixed work and can be copyrighted.

Copyright in a work usually lasts until 50 years after the death of the author, at which point the work goes into the “public domain,” which means that it is no longer subject to copyright and can be used by anyone.

Copyright does not protect ideas, which belong to everyone.  Rather it protects the expression of those ideas.  The distinction between idea and expression is not always clear, and it is the focus of many court cases on copyright.  But basically, expression is the work and creativity that it takes to turn an idea into something useful or interesting.  An idea for a “love story” cannot be copyrighted, but a book or movie called Love Story is subject to copyright, because it takes work and thought to create it.

Copyright can be sold to someone else, which means that the copyright in a work can often be owned by someone other than the creator.  The copyright holder can also give someone a licence, which is a limited right to use the work under the conditions specified in the licence.

The first owner of copyright in the work is the person who creates it (or that person’s employer), not the subject; if you take a picture of someone, you own copyright in the picture, not the person in the picture.

An exception to copyright is the “fair dealing” provision, which gives people a limited right to quote part of a work if it is for the purpose of education or reporting or some other legitimate purpose specified in the Copyright Act.  A person reviewing a book may quote some passages from the book to illustrate the points he or she is making in the review, but he or she may not quote the entire book.

A copyright is registered by submitting an application and the relevant information about the work (title, author, description) to the Canadian Copyright Office.  However, copyright protection applies from the moment the work is created, and you can have copyright in an original work without registering it.  But it is always preferable to register a work.  While you can sue for violation of an unregistered copyright, it may be difficult to prove when the work was created.

Trade-marks

A trade-mark is defined by Canada’s Trade-Marks Act as a mark (a name, or a picture, or some other distinguishing mark) used by a person or business for the purpose of distinguishing their goods or services from other people’s goods and services.  trade-mark rights can be used to stop others from using your trade-marks to pass off their goods and services as yours, or to try to profit from the goodwill and reputation of your business.  trade-mark rights can also be used to compensate you for any profits you may lose as a result of unauthorized use of a trade-mark.

One violates a trade-mark by using the trade-mark as a trade-mark without permission of the trade-mark owner.

Unlike copyright, trade-mark rights do not protect creative work in and of itself; instead it protects the goodwill and reputation that attaches to a good or service.  Even something that is too unoriginal to be copyrighted, like a name or a common picture, may be subject to trade-mark rights if it is uniquely associated with a business’s goods and services; you may not be able to copyright the name of your business, but trade-mark rights may allow you to make sure that no other business can use that name.

Some things are subject to copyright and trade-mark protection at the same time.  The Disney company owns copyright in the cartoon character Mickey Mouse, and in Mickey Mouse cartoons.  But Mickey Mouse is also a trade-mark of the Disney company, because he is used by the company to identify its goods and services as being Disney goods and services.  No other company is allowed to use that name or that logo in connection with their products without Disney’s permission, because that use would confuse consumers into thinking they are getting a particular brand of goods and services when they are not.

For trade-mark rights to be violated, it is not enough for the competing trade-mark to have some points of similarity to the original; the competitor must share a “distinguishing feature” that would cause an average person to confuse the two trade-marks, and therefore the two products.

Also, for trade-mark to be violated, the competitor does not have to be in the exact same business as the owner of the trade-mark, but there must be some kind of reasonable likelihood that the public might think that the competitor’s products or services are being made by the real trade-mark holder.  If the two businesses are so different that no one could possibly think they are related, then there is no likelihood of confusion and no trade-mark violation.

To win in a trade-mark violation lawsuit, it is not enough just to show that the competitor is using your trade-mark without authorization and that confusion is likely to result; you must also show that there has been, or is likely to be, real damage to the goodwill or reputation of your business.  This damage can be anything from direct harm to the business to the generalized idea of “harmful association” (if the other business goes under, you would not want people thinking that you are associated with them).

There are two types of trade-marks: Common-law trade-marks and registered trade-marks.  Unlike copyrights and patents, which are purely statutory rights, trade-mark rights are recognized at common law and can be created without reference to the legislation.  If you use a trade-mark in connection with your business, you have rights in that trade-mark.  However, common-law trade-mark rights are not easily enforceable in court; you can sue for violation of a common-law trade-mark, but you have to prove that there is goodwill or prestige associated with the mark – which is difficult if the mark never became well-known – and even if you can prove this, the trade-mark rights only apply to the specific place where this goodwill or reputation exists, and not anywhere else.

Therefore it is usually preferable to register a trade-mark.  This is done by filing an application with the Canadian Intellectual Property Office (CIPO).  The government will accept an application to register a trade-mark if the trade-mark is neither misdescriptive nor clearly descriptive; that is, it must not give a misleading impression of what the goods or services are, but it also must not be just a literal description of the product.  A registered trade-mark is given trade-mark protection across Canada.

Patents

A patent is a limited right granted by the government to an inventor.  It gives the inventor the sole right to make, use, sell, and licence out that invention for a limited period of time.  The Patent Act of Canada sets this time period at twenty years. A patent is not over the physical form of an invention, but the methodof creating the invention; if you invent something, your patent is not over the working model of it, but the detailed plan for creating it.

Whereas copyright protection applies from the moment you create something, patent protection only exists once the patent application is granted.  In order for an invention to be patented, it must have three characteristics:

1) It must be novel: something that was genuinely unavailable before the inventor came up with it.  Even if someone else previously thought of the idea, your invention is still novel as long as the other person did not come up with equally serious, detailed, workable plans for creating it.  The invention does not have to be something that never existed before in any form; it just has to possess some feature or method that is new.

2) It must be non-obvious: you cannot patent something that required no work or special knowledge to create.  If the invention could have been created without effort by anyone with a degree of technical skill, you cannot patent it.

3) Finally, it must possess utility: it must actually do what you claim it does, and fulfil the purpose for which it was invented.  The test for utility is simply whether, by following the instructions you have provided, one can produce the result you intended.

Once a patent is granted, there is a “presumption of validity” in favour of that patent: if someone wants to challenge the patent, claiming they came up with the same thing first, the burden is on them to prove that they did indeed come up with it first.  To be liable for infringement of your patent, a person does not have to copy your invention in every detail; as long as the competing invention borrows the main features that make your invention unique, it counts as patent infringement.

There are some areas of overlap between copyright and patent.  Both protect your work from being copied; both give you the exclusive right to profit from your work.  Something like a new computer program may be eligible for both copyright and patent, because it is both a new and useful invention and an original creative work.  There are major differences, however, between copyright and patent.  Copyright protection lasts for fifty years or more; patent protection for only twenty.  Copyright can protect any creation, useful or useless, while patents can only be granted to creations that have some kind of specific use.  But while copyright applies only to expression and not ideas, patent will protect unique ideas and concepts.

Whether to choose copyright or patent protection depends on what kind of work you have created, and what you most need protected: if it is the expression you want to protect, copyright is the better option, whereas if you want to protect the basic idea you have come up with for an invention, it makes sense to patent your plan for creating that invention.  The costs of obtaining a patent is much more expensive than registering a copyright.

Trade Secrets

A trade secret is a piece of information – a code, a formula, a device or a piece of news – that derives economic value from being confidential.  Trade-secrets are protected by having people agree to keep the information confidential before access is given to the information.

Rights in trade secrets are mostly created by contract; a contract of employment will often contain a confidentiality agreement, which requires the contractee not to tell other people about what goes on within the company. If you give away a trade secret, you may be liable for any economic harm which comes to the company as a result, as long as they can demonstrate that the economic harm came to them as a direct result of that breach of confidentiality.

Giving away trade secrets only creates liability if this is illegal; if a competitor acquires information through legal means – say, if you have no legal or contractual obligations to keep it a secret, and you tell the competitor the information – then there is no liability, even if it creates economic harm.

An invention can be kept as a trade secret.  But if something is a trade secret, it cannot be patented, because patents have to be available to be seen by the public. If you invent something, then, the decision to make is whether you want to protect it by patenting the formula or method you have created, or by just keeping it a secret.

The advantage to protecting something by trade secret, rather than patent, is that a trade secret gives you exclusive rights for as long as you can keep it a secret, whereas once a patent expires, the invention can be used by anyone.  The disadvantage to trade secrets is that once the secret is out, there is very little you can do to stop anyone from using it, though there may sometimes be a way to take action against the person who gave it away.

Conclusion

The type of intellectual property protection you should look for will depend on the type of work you have created and the type of protection you are seeking.

Feel free to contact Gil Zvulony if you have any intellectual property questions.

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