VARIOUS CANADIAN LEGAL CONCEPTS WITH RESPECT TO INTELLECTUAL PROPERTY By : Me Daniel Lafortune, lawyer LL.M (Montreal), LL.M. (London), Partner Lafortune Leduc, g.p.
THIS DOCUMENT ON INTELLECTUAL PROPERTY MATTERS IS OF A GENERAL NATURE ONLY AND IS NOT INTENTED TO CONSTITUTE LEGAL ADVICE VARIOUS CANADIAN LEGAL CONCEPTS WITH RESPECT TO INTELLECTUAL PROPERTY 1. INTRODUCTION 1.1. Specific rights. Intellectual property is very important in modern economies. The terms "intellectual property" are used to refer to specific rights granted by law with respect to creations of the mind, as opposed to general laws relating to property. 1.2. Intellectual properties protected under statutes. Patents, trade-marks, copyrights, industrial designs and integrated circuit topographies are protected under Canadian (federal) laws. 1.3. Distinctions. Patents cover new inventions (process, manufacture, machine, composition of matter) and improvements to existing inventions. A trade-mark is a word (e.g. "Coke"), a logo (e.g. the stylized "B" of the Birks stores), a picture or drawing (e.g. Mickey Mouse) used to distinguish the wares or services of one person. A copyright is a form of protection for literary, artistic, dramatic and musical works. Industrial designs are visual features of shape, configuration, pattern or ornament of a finished article. Integrated circuit topographies refer to the three dimensional configuration of electric circuits embodied in integrated circuit products or layout designs. 1.4. Other forms of intellectual property. Trade secrets, industrial secrets, confidential information and know-how are forms of intellectual property. These forms of intellectual property may be protected by general rules of law or by contracts (confidentiality agreements and non-disclosure agreements). Trade secrets, industrial secrets, confidential information and know-how may, as long as their secrecy remains, exist without any specific time limit. 2. PATENTS 2.1. Statutory monopoly. The Patent Act grants the patentee a monopoly on the manufacture, use and sale of his invention. In Canada, the owner of a patented invention has the exclusive right (i.e. he may exclude the others) to make, use and sell the invention from the day the patent is granted up to a maximum of 20 years after which the patent
application was filed (for patent applications filed on or after October 1 st, 1989; for patent applications filed before October 1 st, 1989, 17 years from the date of the grant). After expiry of the patent, or if the patent has lapsed for lack of payment of maintenance fee, anyone may make, use and sell the invention. 2.2. Patent. In order to obtain this monopoly, the invention must be protected by a patent. Patents are granted on a country basis i.e. an invention may be protected (by the statutory monopoly) in a country by a patent, but not in other countries. In short, obtaining a patent in Canada does not protect the invention abroad, but may be useful to invoke the convention priority under the Paris Convention for the Protection of Industrial Property i.e. the Canadian filing date of the patent application will be recognized by another member country if the patent application is filed in that country within a year of the Canadian (first) filing. 2.3. Conditions to be granted a patent. The patent is granted by the federal government (Patent Office) with respect to an invention which is new, useful and inventive. One cannot patent a scientific principle, an idea, a method of doing business or a medical treatment. The patent may only be granted for the physical embodiment of the idea. 2.4. Novelty. To be eligible for a patent, the invention must be a worldwide absolute novelty. The invention must not have been communicated or described in Canada or abroad before the date the patent application is filed. In Canada and in the U.S.A., the rule of novelty is subject to a one-ear period of grace before filing. 2.5. Utility. The invention must be useful i.e. the patent application must not describe an inoperative object. Also, a patent cannot be obtained for something that doesn't work. 2.6. Ingenuity. The invention described in the patent application must be a development or an improvement not obvious for workers (scientists or experts) of an average skill in the technology involved. One may obtain a patent for an improvement of an existing patented invention. If the original patented invention is still in force, manufacturing or selling the product with this patented improvement will require consent from the owner of the original patented invention. 2.7. Patent application. Preparing and prosecuting (i.e. corresponding with the Patent Office, making amendments to the application, etc.) a patent application is complex. Usually, the services of a patent agent are used. / 2
/ 3 2.8. Prior search. Before filing a patent application, it is recommended (but not mandatory) to obtain a (preliminary) search of existing patents in Canada and the U.S.A. (where most patents are registered and patents application are filed). 2.9. Patent application. A patent application consists of : 2.9.1. an abstract i.e. a clear and complete description of the invention and its usefulness; and 2.9.2. claims to be covered by the patent. 2.10. Publicity. Patent applications are generally made public 18 months after their Canadian filing date. Competitors (or any other person) may raise questions (or file a protest against the granting of the patent) with respect to the patentability of the invention. The Patent Office (the examiner) may raise objections to claims contained in the patent application. The applicant (through his patent agent) may respond to examiner's objections and requirements. 2.11. Scope of the monopoly. The monopoly granted by a patent will be infringed if a person (the infringer) makes, uses or sells (in the country having granted the patent) a product containing, using or made with the patented invention. 2.12. Non patented inventions. Inventions are not always protected by patents. Some persons try to protect their invention by keeping the invention secret and enforcing the secrecy through contractual agreements (e.g. confidentiality and non-disclosure agreements and covenants). The risk of not protecting an invention by a patent is that a third party may independently discover the invention and obtain patent protection. 2.13. Fees. Apart from filing fees, examination fees and grant of patent fees, the owner of a patent must pay yearly maintenance fees to maintain his patent in force. 2.14. Assignment and licence. A patentee may sell (assign) his rights in a patented invention, in whole or in part, or grant a licence (i.e. consent to use) over the patented invention.
/ 4 3. TRADE-MARKS 3.1. Description. A trade-mark is a word (e.g. "7 UP"), logo (e.g. the yellow letter "M" of McDonald's restaurants) or design (e.g. "Shell") used to identify the products or services of its owner from those of other persons. A trade-mark must be distinguished from a trade name. The trade name is the name under which one's business is conducted (e.g. the name of a corporation or of a business division, etc.). The trade name can be registered as a trade-mark under the Trade-marks Act only if it is also used as a trade-mark i.e. to identify wares or services. 3.2. No obligation to register a trade-mark. Contrary to patents, registration of trade-marks is not compulsory in order to obtain legal protection. However, registration under the Trade-marks Act enables its owner to prove (on a prima facia basis) ownership of the trade-mark (in a litigation, the registered owner does not have to prove ownership or the validity of the trade-mark; the onus is on the person attacking ownership and the trademark) and to ensure protection throughout Canada (even if not used in all the country). In short, registration of a trade-mark is highly recommended, although not mandatory. 3.3. Use. Ownership of a trade-mark results from its use in the normal course of business. 3.4. Trade-mark application. Trade- marks may be registered following filing of a trademark application in the Canadian Intellectual Property Office. To qualify for registration under the Trade-marks Act, a trade-mark must not be clearly descriptive of a feature of the wares or services sold or offered under the trade-mark, nor should the trade-mark be clearly misleading of the wares or services protected by it. To be registrable, the trade-mark must not create confusion with someone else's existing trade-mark. 3.5. Administration. A Canadian Trade-mark agent may file, on behalf of the owner, the application for registration. The examiner of the Canadian Intellectual Property Office may raise objections. Once objections (if any) are met, the application is published in the Trade-marks Journal. Oppositions may be made against registrations of the trade-mark. 3.6. Period of registration. Trade-marks are registered in Canada for a period of 15 years from the date of a registration. Registration may be renewed for a period of 15 years upon payment of renewal fees. More than a renewal is possible. Trademarks registered or not under the Trade-marks Act exist as long as they are used to distinguish one's wares and services and remain distinctive.
3.7. Prior search. Before starting to use a trade-mark, it is safe to conduct a search of existing trade-marks and trade names to ensure that no conflicting name is used by another person. / 5 4. COPYRIGHT 4.1. Scope. Copyright protects existing original works against copying. It does not protect the ideas, information and concepts embodied in the work. Copyright does not provide the author with an absolute monopoly over the expression of ideas. Copyright applies to : 4.1.1. literary works such as books, newspapers, magazines and pamphlets; 4.1.2. dramatic works such as films, motion pictures, videos, plays, screen plays and scripts; 4.1.3. musical works; 4.1.4. artistic works such as paintings, maps, photographs, sculptures and architectural works; 4.1.5. performer's performances; 4.1.6. communication signals; 4.1.7. sound recordings (CD's and tapes); and 4.1.8. computer programs. The owner of the copyright has the exclusive right to produce or reproduce, in whole or in part, the work or the subject-matter of the copyright. The copyright includes the right to perform in public the work and the right to publish it. Also, copyright includes the right to : - translate the work; - communicate the work by telecommunication; - rent a computer program; - make a sound recording out of a literary, dramatic or musical work; - publish a sound recording.
Consequently, the copyright owner has the exclusive right to control reproduction of his work (in whole or substantial part) in any material form. Titles, methods and short phrases are usually not protected by copyright. An idea may not be protected by copyright. Copyright is restricted to the protection of the expression of an idea (on a fixed manner, such as text, drawing, recording, etc.). 4.2. Copyright infringement. Here are some examples of infringement of a copyright : - one reprints an article, a book, etc. without the copyright holder's consent; - photocopying an article, without copyright owner's consent; - taping music heard on radio. 4.3. Fair dealing. An exception to infringement of copyright is fair dealing. Fair dealing with a work (quote of a work made by another) for purposes of private study, research, criticism, review or news reporting is not infringement. Case law under the fair dealing exception has narrowly interpreted the defence. Surrounding facts must support a finding that the use was fair. To assert this fairness, the Court has to determine how much of the work was copied and compare the importance of the copy to the work in which it was copied. At some conditions, other exceptions to infringement exist in the Copyright Act for nonprofit educational institutions, museums, non-profit libraries and archives. 4.4. Work in the public domain. A work which is part of the public domain does not have copyright protection. 4.5. No requirement to register. Copyright does not require a prior registration to exist. However, registration facilitates evidence of its existence, originality and ownership. 4.6. Length of copyright. In general, a copyright lasts for the life of its author plus 50 years after his death. In case of joint authorship, the term is calculated with respect to the life of the last author to die. When the copyright lapses, the work is part of the public domain. 4.7. Assignment or licence. Assignment (i.e. transfer of all or part of the ownership in the copyright) or licence (i.e. consent to use the work for certain purposes, under certain conditions and for a specific time) of a copyright requires a written document. / 6
4.8. Moral rights. The author of a copyright who may be the owner or not (because he assigned it or was an employee when creating the work) - has moral rights, i.e. the right to the integrity of the work and the right to be recognized (or not) as the author of the work. Moral rights may not be assigned, but may be waived in whole or in part. / 7 5. INDUSTRIAL DESIGNS 5.1. Scope of the Industrial Design Act. Industrial designs protect the features of shape, configuration, pattern or ornament applied to a finished product. For example, it may protect the shape of a pen. Industrial designs must be original and have features that appeal to the eye. The registration of a design does not protect the functional characteristics of an article. 5.2. Delay to file the application to register. Application to register an industrial design must be filed within twelve months of its first publication, failing which the exclusive right to the design will be lost. 5.3. Scope of the protection. A registered industrial design gives its owner the exclusive right to use the design with respect to any article for which the design is registered. As long as the registration has not lapsed, others will be prevented in Canada to make, import, sell, rent or offer for sale an article using a design or imitating an article for which the design has been registered. 5.4. Term. The registration of an industrial design is valid for a maximum of 10 years from the date or registration. After the initial 5 years, a maintenance fee must be paid to keep the protection. After the expiry of the term of 10 years (or 5 years if the maintenance fee is not paid), anybody in Canada may make, import, etc. an article using the design. 6. INTEGRATED CIRCUIT TOPOGRAPHIES 6.1. Scope of the Integrated Circuit Topography Act. The Integrated Circuit Topography Act provides for protection against copying of registered topographies. A topography is a design of the disposition of the interconnections and the elements for the making of an integrated circuit product or the elements and the interconnections for the making of customization layer or layers to be added to an integrated circuit product in an intermediate form. So, the legislation protects the three-dimensional configuration of
layers of semi-conductors, metals and other materials composing semi-conductor integrated circuits (mini-chips). The legislation protects the original design (i.e. developed through the application of intellectual effort) of a registered topography against unauthorized reproduction, importation or commercial exploitation or manufacture of an integrated circuit in which is incorporated the topography. Rights over a topography created by an employee in the course of his employment are vested in his employer. 6.2. Registration is required. To have rights under the Integrated Circuit Topography Act, the owner must have registered his rights over his integrated circuit topography. To be registrable, a topography must be original. A topography is original if it has not been produced by the mere reproduction of another topography, is the result of an intellectual effort and is not, at the time of its creation, common place among creators of topographies or manufacturers of integrated circuit topographies. 6.3. Delay to file the application to register. The application for registration must not be received more than 2 years of the date of first commercial exploitation (in Canada or abroad). 6.4. Term. The term of existence of intellectual property rights arising under the Integrated Circuit Topography Act is 10 years from the earlier of the date of filing of the application for registration or the date of the first commercial exploitation. / 8 7. LICENCES 7.1. Use of licences. Licences can be granted with respect to all types of intellectual property. A licence is a contractual authorization granted by the intellectual property owner to use part or all of his intellectual property. It is not an assignment of the ownership in the intellectual property. 7.2. Contents. When negotiating a licence, one must consider the possible features of the licence, such as: 7.2.1. exclusivity or non-exclusivity; 7.2.2. term of the licence (renewable or not); 7.2.3. territory (worldwide or not); 7.2.4. extent of the licence (for what subject matter);
7.2.5. monetary conditions (royalties, lump-sum, etc.); 7.2.6. reports to be remitted by licensee to licensor; 7.2.7. the possibility to assign the licence; 7.2.8. who must pay to defend or maintain the intellectual property rights which are licenced; 7.2.9. who must sue (and who will control proceedings) if there is an infringement of the licenced rights by a third party; 7.2.10. if licencee makes improvements to an intellectual property owned by licensor, will they be automatically assigned to licensor? / 9 8. TRADE SECRETS, INDUSTRIAL SECRETS, CONFIDENTIAL INFORMATION AND KNOW-HOW 8.1. Other intellectual properties. In today's business environment, technology product formulation, design formulation, databases, customer lists, know-how, advertising strategies, business plans and other confidential information are often valuable assets. Many persons (including corporations, partnerships, joint ventures, etc.) do not adequately safeguard such property. 8.2. Contractual methods of protection. Various contractual methods exist to protect this type of intellectual property. The most frequent are : - confidentiality and non-disclosure agreements and covenants; - non-competition agreements and covenants. When properly drafted, agreements (or covenants) can modify or enhance the Common Law and the Civil Law obligations and clarify legal uncertainties arising under the Common Law and the Civil Law. 8.3. Need of protection. Confidential information needs to be protected from competitors and current and former employees and business partners. 8.4. No definition. There is no statutory definition of trade secrets, industrial secrets, confidential information or know-how. This being so, a well drafted agreement or covenant dealing with such concepts will contain a contractual definition to avoid confusion. 8.5. Employment agreements or codes of conduct. As a condition of their employment, employees are frequently requested to sign an employment agreement or code of conduct which deals with ownership, use and disclosure of confidential information which belongs to the employer.
/ 10 8.6. Confidentiality agreements. Confidentiality agreements may also be executed by employees, business partners or anyone else (such as a prospective purchaser) having access to a person's confidential information. As already mentioned, the definition of confidential information to be protected should be included in confidentiality agreements. The following exceptions to the definition of confidential information are usually included in a confidentiality agreement or covenant: - information already known by the recipient of the confidential information; - information in the public domain; - information which can be independently developed by the recipient of the confidential information without use of the latter; - information which must be divulgated pursuant to a Court order or a statutory obligation. 8.7. Conditions of validity of non-competition agreements. Although it is not necessarily their main purpose, non-competition agreements may be used to protect a person's confidential information from a departing employee, business partner or former shareholder. To be valid and not against the public interest (public order), a noncompetition agreement must be reasonable with respect to the liberty of trade, the liberty of work of the person bound by the non-competition agreement and the commercial interest of the person wishing to prevail himself of it. This reasonableness is analysed with respect to : - what is prohibited; - the geographic scope of the prohibition; and - the length of time of the non-competition obligation. 8.8. Other preventive measures. In addition to entering into agreements with persons having access to the confidential information, additional preventive measures should ideally be used to prevent unauthorized use or disclosure of confidential information : - have a written code of conduct serving as a notice to all employees as to what is considered as confidential information owned by their employer; - restrict the access to confidential information; - have routine and regular intellectual property audits;
- have written corporate policies with respect to intellectual property rights, namely with respect to inventions and developments. / 11 9. INFRINGEMENT 9.1. Presumption. Registered intellectual properties are presumed valid, but their validity may be challenged. For examples : - one can challenge a patent for lack of novelty in view of prior art; and - one can challenge a copyright by showing that it is a reproduction of a work in the public domain. 9.2. Jurisdiction. Civil infringement proceedings may be instituted before the Federal Court of Canada or in the appropriate provincial Court. 9.3. Injunction. The injunction is the remedy to prevent future infringements. 9.4. Interlocutory injunction and final injunction. In the context of an intellectual property infringement, the plaintiff (i.e. generally the intellectual property owner) may seek an interlocutory injunction. An injunction is an order from a Superior Court enjoining a person (i.e. the infringer) to cease to commit infringement acts pending final judgment. Interlocutory injunction will not be issued unless i) there is a serious issue to be tried, ii) irreparable harm will be suffered by the applicant, if the interlocutory injunction is not granted and iii) the balance of convenience favours the applicant. These criteria to issue an interlocutory injunction do not apply for a final injunction. A final injunction is issued by the Court when after having heard all relevant evidence, it decides that there has been an infringement and the Court issues an order to prohibit future infringement. 9.5. Damages. A sum equivalent to the damages caused by the infringer may also be claimed by the intellectual property owner. Damages may be for the loss of sales, loss of profits, injury to reputation, loss of market share, etc. 9.6. Punitive damages. Except in the Province of Québec, punitive damages may be granted by the Court for harsh, vindictive, reprehensible and malicious conduct.
9.7. Disclosure. The intellectual property owner may also obtain disclosure of all sales and other accounting information relating to an infringement. With such information, he may claim, in addition to damages, the profits made by the infringer. 9.8. Delivery of infringing copies. The plaintiff may also make a claim to obtain delivery of infringing copies. 9.9. Anton Piller Order. Another civil remedy is the Anton Piller Order. The Anton Piller Order is an extraordinary procedural remedy which, in short, is a seizure of incriminating evidence made without prior notice to the defendant. The purpose of the Anton Piller Order is to ensure conservation of evidence. The Anton Piller Order requires that three pre-conditions are met : - there is a strong prima facie case for an injunction; - the applicant faces serious damages if the Anton Piller Order is not issued; - there is a real possibility that the defendant will destroy or hide incriminating documents or other things, such as infringing copies, if the defendant receives an advanced notice of the Anton Piller Order. / 12 The entry and search is conducted by plaintiff s solicitor together with a limited number of persons. The defendant may contest the Anton Piller Order. The plaintiff will be liable to the defendant of any unauthorized execution of the Anton Piller Order or if Anton Piller Order is set aside. 9.10. Criminal and administrative remedies. Criminal and administrative remedies are also possible. For example : Section 42 of the Copyright Act provides for penal sanctions against a copyright infringer who acted knowingly in committing one of the offences provided in Section 42(1) of the Copyright Act. The penal sanctions are in addition to civil and administrative remedies. A person found guilty under Section 42 of the Copyright Act is liable to fines and imprisonment, and the Court may issue an order with respect to the disposal of infringing copies or plates; said order may be the destruction of the infringing copies or plates or their delivery to the copyright owner.
The Copyright Act gives to the copyright owner the right to have the Canadian Customs prohibit the importation of copies of a work in which he owns copyright. / 13 Under the Copyright Act, it is possible to obtain from the Court an order directing the Minister of National Revenue to detain infringing copies of a work before their release by Canadian Customs. DANIEL LAFORTUNE, LL.M. (Montreal), LL.M. (London)