Intellectual Property, Patents, Trademarks, Copyright, and Franchising 13 Intellectual Property, Patents, Trademarks, Copyright, and Franchising © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

CH 13 LEARNING OBJECTIVES Outline the importance of intellectual property rights to business Examine patent law protection Examine trademarks and their protection Examine copyright and industrial protection Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-1 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Introduction Intellectual Property 13.1 Introduction Intellectual Property Rights that arise as a result of creative efforts (inventors, artists, writers) Valuable business assets Exclusive federal jurisdiction Balance benefits and rights to intellectual property by owners with protection of public interest Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-2 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Introduction (Cont’d) 13.1 Introduction (Cont’d) Intellectual Property – Four Types Patent Exclusive right (monopoly) to a new invention 20 year time period with public disclosure Trademark Mark used to identify a product or service Copyright Ownership and control over copying of an original literary or artistic work Industrial design Right to produce an artistic work by industrial process Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-3 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Common Law Protection of Intellectual Property 13.2 Common Law Protection of Intellectual Property Alternative protection by confidentiality clauses Promise to keep information confidential Access to the courts for enforcement Governs – employees, businesses, partnership and joint venture Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-4 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

The Patent Process Figure 13-1 Essentials of Canadian Business Law, 1st Canadian Edition Slide 1-5 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Patents: The Patent Act 13.3 Patents: The Patent Act The Patent Process Key areas requiring accuracy and honesty: Specifications Detailed description of the invention Claims statement Description of what is new in the product or process and the various uses Drawing Brief Abstract Short description enabling later searches to determine the nature and uses of the invention Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-6 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Foreign Patent Protection 13.4 Foreign Patent Protection Original agreement in 1883 Inventor applying for a patent in his or her own country has 12 months to apply in a member country Uniform filing date allows backdating in other member countries to the date of the original application Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-7 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

13.5 Compulsory Licences Public duty or obligation by patentee to produce the invention to satisfy public demand – failure may result in revocation of the patent Patentee may assign the rights Compulsory licence Issued by the Commissioner of Patents Permits another party to work the patent for the general benefit of the public Granted after the patent has been in effect for 3 years Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-8 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

13.6 Infringement Unauthorized production or uses of products covered by patent Very broad application Patentee must prove: Production, importation or working of a patent without consent or royalty payment Remedies Money damages, injunction and accounting for all profits Defences Patent is invalid or expired Patentee allowed the infringement Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-9 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Trademarks Trade-marks Act Federal legislation Trademarks Trade name 13.7 Trademarks Trade-marks Act Federal legislation Trademarks Used to distinguish and identify wares/goods or services Trade name Name coined or chosen to describe a business Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-10 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

13.7 Trademarks (Cont’d) Protection by registration at the Intellectual Property Office (includes foreign trademarks) Must be distinctive and used Must not be a prohibited mark Service marks Service industries (banks, airlines) Certification marks Distinguish certain quality of goods or services (franchise operations) Distinctive guise Distinguish by a particular shape Trade name Name coined or chosen to describe a business Must not be confused with other name Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-11 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

13.8 Enforcement Owner of a trademark must take legal action to prevent unauthorized usage Remedies Injunction and accounting for lost profits Passing off (tort) Misrepresentation of goods or services as they appear to be those of another well-known business Reputation has value Confusion resulted in injury If a trademark loses distinctiveness the user may no longer claim exclusive rights Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-12 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

13.10 Copyright Ownership of original literary and artistic work, and control over copying Copyright Act – federal statute Sole right to publish or reproduce belongs to the original owner for their lifetime plus 50 years Registration is not essential but gives the public notice and is proof of ownership Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-13 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Copyright (Cont’d) Copyright Act 13.10 Copyright (Cont’d) Copyright Act Copyright of the arrangement and expression of ideas only, not the ideas themselves Registration allows marking by a symbol May be assigned in writing Infringement may be pursued by the owner Exceptions are set out in the statute Why is copyright so controversial? Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-14 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Performing-Rights Societies and Collective Societies 13.11 Performing-Rights Societies and Collective Societies Performing-rights Societies Assignees of performing rights to musicals and dramatic works Charge fees to organizations to perform works Fee schedules are filed with the Copyright Board Collective Societies Operate licensing schemes for performances Fee schedules must be approved by the Copyright Board Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-15 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Industrial Designs Industrial Designs Act 13.12 Industrial Designs Industrial Designs Act Registerable designs that are reproduced by industrial process Does not apply to some “artistic” products nor to features that are purely utilitarian ( eg. - hinges) Registration Grants exclusive rights to produce for a total of 10 years Similar process to patents Unauthorized manufacture is infringement Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-16 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Protection of New Technologies 13.13 Protection of New Technologies Integrated Circuit Topography Act Covers new technologies Ownership rights to integrated circuits Rights are similar to patents for a time limit of 10 years Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-17 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

Franchises Franchise – between franchisor & franchise 13.14 Franchises Franchise – between franchisor & franchise Strictly controlled by the franchise agreement (contract) Grants a license to use the franchisor’s business name, brand names, and operations Provides detailed operating systems and support for the franchise business Usual promises Confidentiality by the franchisee Restriction of franchises within geographical areas by the franchisor Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-18 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.

SUMMARY Intellectual property CH 13 SUMMARY Intellectual property Governed by federal statutes – registration set out by statute; unauthorized usage is infringement Patents - invention rights Trademark – distinctive marks Copyright – original literary / artistic work Industrial design – artistic work reproduced by industrial process Franchises – business arrangements for use of trademarks and trade names Essentials of Canadian Business Law, 1st Canadian Edition Slide 13-19 © 2005 McGraw-Hill Ryerson Ltd., All Rights Reserved.