Copyright © 2004 McGraw-Hill Ryerson Limited 1 PART 8 – SPECIAL LEGAL RIGHTS AND RELATIONSHIPS  Chapter 33 – Intellectual Property, Patents, Trademarks, Copyright and Franchising Prepared by Douglas H. Peterson, University of Alberta

Copyright © 2004 McGraw-Hill Ryerson Limited 2 INTELLECTUAL PROPERTY Patents Trade Marks Franchises Copyright Industrial Designs

Copyright © 2004 McGraw-Hill Ryerson Limited 3 INTRODUCTION Intellectual Property Property of the mine Claims of ownership to certain types of industrial and intellectual property Rights people have in their ideas and how they are expressed Types Patent Trademark Copyright Industrial Design

Copyright © 2004 McGraw-Hill Ryerson Limited 4 INTRODUCTION Legislation Federal by way of the constitution International Canada a member of several international conventions Balance Between the inventor (owner’s) rights and the public’s rights Particular rights exist to promote certain activities

Copyright © 2004 McGraw-Hill Ryerson Limited 5 INTRODUCTION Types of Intellectual Property Patent – purpose is to encourage new inventions that benefit society Copyright – encourage literary and artistic endeavors Trademarks – protect marks and names (goodwill) associated with a persons goods and services Industrial Design – patent on ornamentation

Copyright © 2004 McGraw-Hill Ryerson Limited 6 PATENT – A RIGHT TO NEW INVENTION Historical development of the law Monopoly rights granted by Crown in letters patent Monopoly granted to encourage trades to import into England Canada Adopted U.S. model for procedure Retained common law for interpretation and expression 1989 moved laws closer to international standards of the European Patent Convention

Copyright © 2004 McGraw-Hill Ryerson Limited 7 THE PATENT ACT (PATENT) Patent is an exclusive right to: (a monopoly) Make Use Sell Authorize others to make, use, or sell An invention Requirements Must be a concrete thing that can be constructed Patent law protects the idea and theory behind the invention as well

Copyright © 2004 McGraw-Hill Ryerson Limited 8 THE PATENT ACT – PATENTABLE SUBJECT Four Classes A machine (multiple interactive parts) A process (method of manufacture or achieving result) An article of manufacture (useful device) Composition of material (a formulation) Term of Patent Not valid or enforceable until granted 20 years from the date of application

Copyright © 2004 McGraw-Hill Ryerson Limited 9 THE PATENT ACT - REQUIREMENTS NOVELTY (new) Any public disclosure, public use, or sale of the invention prior to filing for a patent is a bar to obtaining a patent One year grace period for the year preceding filing UTILITY (Useful) An invention must solve some practical problem, and it must actually work Must have industrial value Must have a practical use

Copyright © 2004 McGraw-Hill Ryerson Limited 10 THE PATENT ACT – REQUIREMENTS INGENUITY (unobvious) There must be some ingenuity or inventive step involved in the invention Changes to something that would be obvious to someone skilled in the art to which the invention pertains would not be patentable

Copyright © 2004 McGraw-Hill Ryerson Limited 11 PATENT PROCEDURE Registration system (application) When a search of patent records confirm the invention is original and unique The first to apply has priority Application can be made in other jurisdictions Must apply to Canadian patent office Patent application usually prepared by patent agent

Copyright © 2004 McGraw-Hill Ryerson Limited 12 PATENT PROCEDURE 2 Parts Specifications – the description of an invention contained in a patent Claims – what a patented invention can do “Patent Pending” Notice to the public that a patent application has been filed (grant of patent is pending)

Copyright © 2004 McGraw-Hill Ryerson Limited 13 EXCLUSIONS Receive protection under other areas of law Not meet the definition of a patent For policy reasons, not patentable

Copyright © 2004 McGraw-Hill Ryerson Limited 14 FOREIGN PATENT PROTECTION Union Convention of Paris (Paris Convention) 1883 File patent in one country have priority date of original application if filed within 12 months

Copyright © 2004 McGraw-Hill Ryerson Limited 15 COMPULSORY LICENSES Compulsory Licensing – granting a license to a person to work a patent without the consent of the owner of the patent Patent inventor has a public duty to do so in order to receive patent Allowed if: General benefit of public Failure to supply

Copyright © 2004 McGraw-Hill Ryerson Limited 16 INFRINGEMENT Infringement – unlawful interference with the legal rights of another Plaintiff must prove infringement has taken place Claim patent invalid Patent has expired Infringement is a question of fact

Copyright © 2004 McGraw-Hill Ryerson Limited 17 INFRINGEMENT (REMEDIES) Damages As in tort law Applies when infringement has injured the patent owner Accounting of profits An order to transfer profits made through infringement to the patent owner Applied for unjust enrichment by the infringer Injunction An order to restrain the infringer from continued infringement

Copyright © 2004 McGraw-Hill Ryerson Limited 18 TRADEMARKS (HISTORICAL DEVELOPMENT) Trademark – mark to identify one’s product or service Historical Development of the Law Mark of an owner where little literacy or records Evolution from tort of deceit Trade Mark and Design Act of 1868 Certification marks Further revision pending

Copyright © 2004 McGraw-Hill Ryerson Limited 19 TRADE MARKS ACT A Trade-Mark (™ or ®) is Distinctive mark Consumers associate goods/services with point of origin (producer) or standard of quality. A mark used to distinguish a person’s products or services from those of another A trademark is usually A word, words, a slogan A design letters numbers A symbol distinguishing guise Any combination of the above Colour may also be claimed as part of the mark as well

Copyright © 2004 McGraw-Hill Ryerson Limited 20 TYPES OF TRADE MARKS Service marks Used by service industries Banks, airlines, trucking companies Principle business is that of providing a service Certification marks Distinguish goods or services of a certain quality Common in franchise operations “Quality marks” or origin

Copyright © 2004 McGraw-Hill Ryerson Limited 21 TYPES OF TRADE MARKS Distinctive guise Product shapes or distinct packaging Trade name A name coined or chosen to describe a business The name under which a sole proprietorship, a partnership, or a corporation does business The adoption of a trade name can prevent the adoption of a trademark

Copyright © 2004 McGraw-Hill Ryerson Limited 22 REGISTRATION REQUIREMENTS Trademarks may be registered or unregistered Unregistered trademarks are often referred to as common law trademarks (™) Comes into existence when a business simply adopts and uses it Registered trademarks ( ®) Must be distinctive and used Prohibited marks Search requirements

Copyright © 2004 McGraw-Hill Ryerson Limited 23 REGISTRATION REQUIREMENTS OWNERSHIP COMES FROM Use of the trademark Filing an application to register a proposed trademark Making it known in Canada Distinctiveness: the mark must actually distinguish the goods or services in association with which it is used

Copyright © 2004 McGraw-Hill Ryerson Limited 24 TRADEMARK: GROUNDS FOR DENIAL Non-compliance with formal filing requirements Mark is not remittable Applicant not person entitled to registration Mark is not distinctive

Copyright © 2004 McGraw-Hill Ryerson Limited 25 TRADEMARK: PROHIBITED Trademark must not be: Primarily the name or surname of an individual who is living or who has died in the last 30 years Descriptive or deceptively misdescriptive of the character or quality of the wares The name in any language of any ware or service in connection with which it is used or proposed to be used Confusing with another registered trademark An official or prohibited mark

Copyright © 2004 McGraw-Hill Ryerson Limited 26 ENFORCEMENT Owner can prevent the use of the mark by another Owner may lose this right if: Trademark no longer used; or Becomes so successful the name becomes generic Civil and Criminal action available Injunction Accounting for profits made through infringement Criminal aspects Forgery of mark “Passing-off”

Copyright © 2004 McGraw-Hill Ryerson Limited 27 FOREIGN TRADE MARKS Canada member of international convention concerning trademarks Permits a user of a trademark in a foreign country to apply for registration there If application made in Canada within 6 months, application in Canada will be backdated to date of foreign application

Copyright © 2004 McGraw-Hill Ryerson Limited 28 FRANCHISES Franchise A business relationship that licenses the use of trade names, trademarks, and operating procedures to operate a similar business Contractual agreement to operate business on set principles with licensed use of intellectual property Common terms of contract Exclusive license to use trade name and trade marks within defined area No other franchise to be granted in defined area Manuals and training to be supplied to franchisee

Copyright © 2004 McGraw-Hill Ryerson Limited 29 FRANCHISES Common terms of contract – cont’d Oversee construction of premises Supply product/ingredients used in business Confidentiality requirements Inspection of records and operations Contributions to advertising Franchise fee plus royalties Topical legislation

Copyright © 2004 McGraw-Hill Ryerson Limited 30 COPYRIGHT Copyright – the right to copy Copyright extends to 4 categories of works Literary works (including computer programs) Artistic works Musical works Dramatic works General right of owner to protection from copying of the work

Copyright © 2004 McGraw-Hill Ryerson Limited 31 HISTORICAL DEVELOPMENT OF THE LAW Largely irrelevant before printing press Printed work: Does published equal “public”? First legislation in Britain – 1709; in Canada – 1868 By 1924 – virtually all literary and artistic work covered Live performers and broadcast signals covered – 1997

Copyright © 2004 McGraw-Hill Ryerson Limited 32 THE COPYRIGHT ACT Bundle of rights The right to produce The right to reproduce The right to translate The right to publish The right to publicly perform (in some cases) The right to adaptation and exhibition The right to authorize someone else to exercise those rights

Copyright © 2004 McGraw-Hill Ryerson Limited 33 THE COPYRIGHT ACT Existence of copyright is automatic in Canada Must be registered to gain international protection Ownership - the creator or employer owns the work unless there is an agreement otherwise Creator retains moral rights - not to have the work changed to diminish or degrade it

Copyright © 2004 McGraw-Hill Ryerson Limited 34 TERM OF COPYRIGHT Exists automatically as soon as in a material form Usually lifetime of the author plus 50 years Voluntary registration recommended (©+date+owner) Work must be: Original – work originates from the author Fixation – expressed in some fixed form

Copyright © 2004 McGraw-Hill Ryerson Limited 35 MORAL RIGHTS The author’s rights to have work properly attributed and not prejudicially modified or associated with products Moral rights include the following Paternity Integrity Association

Copyright © 2004 McGraw-Hill Ryerson Limited 36 INFRINGEMENT Doing an act that only the owner has the right to do, without the consent of the owner Unauthorized performance, publication, reproduction, translation, recording, broadcasting, exhibiting in public, etc. Need not be entire work, substantial is enough

Copyright © 2004 McGraw-Hill Ryerson Limited 37 DEFENSES Fair Dealing – permits the copying of works for the purpose of Private study, research Criticism, or review News reporting Computer software – permits the owner of the program to make a copy for adaptation for use on another computer and a copy for backup purposes

Copyright © 2004 McGraw-Hill Ryerson Limited 38 PERFORMING-RIGHTS SOCIEITES/COLLECTIVE SOCIETIES Obtain by way of assignment performing rights to musical and dramatic works They then grant performing licenses for a fee to organizations A system of collecting fees when works are reproduced or performed

Copyright © 2004 McGraw-Hill Ryerson Limited 39 INDUSTRIAL DESIGNS Shape, pattern, or ornamentation Applied to industrially mass-produced (50+) ‘Patent’ on style of ornamentation (Design Patent) Functional/utilitarian features not registrable Registration of a unique shape, pattern or ornament under the Industrial Design Act Requires registration before it valid or enforceable Original registration is valid for 5 years Optional renewal for an additional 5 years

Copyright © 2004 McGraw-Hill Ryerson Limited 40 SUMMARY Protection covered by statutes Each act protects a special property right and confirms ownership Types Patent – monopoly right in return for public use of invention Trademark – exclusive use of marks that distinguish ones services or goods Copyright – “right to copy” artistic and literary works Industrial Design – “design patent”