protecting intellectual property and trade secrets (oct29.08)

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Protecting Protecting Intangible Business Intangible Business Assets Assets © Teresa Cheung Teresa Cheung LL.B. LL.M. (Intellectual LL.B. LL.M. (Intellectual Property) Property) [email protected] [email protected]

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What are intangilbe assets and the main types of intellectual property. How to protect intangible assets such as trade-secrets.

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Page 1: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Protecting Protecting Intangible Business AssetsIntangible Business Assets©©

Teresa Cheung Teresa Cheung

LL.B. LL.M. (Intellectual Property)LL.B. LL.M. (Intellectual Property)

[email protected]@wiresjolleyllp.com

Page 2: Protecting Intellectual Property And Trade Secrets (Oct29.08)

OverviewOverview

1.1. What are intangible business assets?What are intangible business assets?• Characteristics Characteristics • Examples Examples

2.2. Licensing intellectual propertyLicensing intellectual property• Protecting and exploitingProtecting and exploiting

3.3. Protecting trade secrets from Protecting trade secrets from competitors and potential competitors competitors and potential competitors (employees) in contract(employees) in contract

Page 3: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Intangible Business AssetsIntangible Business Assets

Characteristics:

intangible (information that can not be possessed)

can be easily reproducible recognized by law to be property owner can exercise rights:

(1) right to use (2) right to exclude others from use(3) right to transfer (to sell, license)

Page 4: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Intangible Business AssetsIntangible Business Assets

Characteristics:

can be valued in most cases:accounting of profitsassessment of damages

Page 5: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Intangible Business AssetsIntangible Business Assets

Intellectual Property:

patentscopyrightstrade-marks

Intangible Business Asset:confidential informationtrade secrets

Page 6: Protecting Intellectual Property And Trade Secrets (Oct29.08)

INTELLECTUAL PROPERTY LAW OVERVIEW INTELLECTUAL PROPERTY LAW OVERVIEW

Page 7: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Intangible Business AssetsIntangible Business Assets

Case study:

www.amazon.com

Page 8: Protecting Intellectual Property And Trade Secrets (Oct29.08)
Page 9: Protecting Intellectual Property And Trade Secrets (Oct29.08)

TRADE-MARKS ACTTRADE-MARKS ACT R.S. 1985 R.S. 1985

““trade-mark" meanstrade-mark" means ((aa) a mark that is used by a person for the ) a mark that is used by a person for the

purpose of purpose of distinguishingdistinguishing or so as to or so as to distinguish distinguish wares or serviceswares or services manufactured, manufactured, sold, leased, hired or performed by him sold, leased, hired or performed by him from from those manufactured, sold, leased, hired or those manufactured, sold, leased, hired or performed by othersperformed by others, ,

((bb) a certification mark,) a certification mark, ((cc) a distinguishing guise, or) a distinguishing guise, or ((dd) a proposed trade-mark) a proposed trade-mark

Page 10: Protecting Intellectual Property And Trade Secrets (Oct29.08)

How To Choose a Trade-markHow To Choose a Trade-mark

Choose an inherently strong mark – Choose an inherently strong mark – these marks are given the highest these marks are given the highest level of protectionlevel of protection mark is creative; do not describe the mark is creative; do not describe the

quality or features of the goods and quality or features of the goods and serviceservice

Eg. Google, Apple, Amazon, IndigoEg. Google, Apple, Amazon, Indigo

Page 11: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Choose a Distinctive Trade-markChoose a Distinctive Trade-mark

Trade-marks will not be Trade-marks will not be registeredregistered if: if: Name or surname of person who is living Name or surname of person who is living

or deceased within past 30 years (eg. or deceased within past 30 years (eg. Cheung)Cheung)

Descriptive or misdescriptive (eg. “Fast” Descriptive or misdescriptive (eg. “Fast” for car, “Apple” for juice)for car, “Apple” for juice)

Name in any language of the goods and Name in any language of the goods and services services

Confusingly similar to another trade-Confusingly similar to another trade-mark or trade namemark or trade name

Page 12: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Choose a Distinctive Trade-markChoose a Distinctive Trade-mark

A non-registrable trade-mark can be A non-registrable trade-mark can be registered if it has become registered if it has become distinctive at the date of filing an distinctive at the date of filing an application for its registration.application for its registration.

See section 12 of the See section 12 of the Trade-marks Trade-marks ActAct

Page 13: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Choose a Distinctive Trade-markChoose a Distinctive Trade-mark

How To Choose a Trade-mark:How To Choose a Trade-mark:

1.1. Conduct a NUANS searchConduct a NUANS search

2.2. Internet and Google searchInternet and Google search

3.3. For international and North For international and North American coverage: retain a American coverage: retain a specialized search firm specialized search firm

Page 14: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Examples of Famous Marks• WARES: (1) Stationery, school and office supplies namely,

binders, student planners, notebooks, portfolio covers, bookbags, pouches for carrying school materials, book covers, briefcases, pen and pencil holders, school bags, knapsacks, gym bags, calendars and pocket calendars; computer software in the field of health and fitness used to manage digital music, store and organize digital music, create custom CD's, download digital music from the internet, build, manage and transfer play lists, categorize music by tempo, log fitness data, namely times, paces, heart rate and injuries, create workout schedules and goals, download data from a watch to a computer; electrical, electronic communications and digital audio equipment and accessories, namely portable digital music players, calorimeters, and carrying cases for these items; radio link watches which contain a radio frequency transmitter, receiver and/or transceiver used to monitor heart rate, speed and distance, communicate with wheel sensors on bicycles and control digital audio equipment; watches which include altimeters, compasses, pedometers, chronographs, speed distance monitors with speed sensor, heart rate monitors.

Page 15: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Colour as a Claim• COLOUR CLAIM: Colour is claimed as a

feature of the trade mark. The border of the label is black. The background is pale gold. The three elliptical rings are a darker shade of the same gold. The words TIM HORTONS are red. The words ALWAYS FRESH are dark brown.

• WARES: (1) Donuts, donut holes, bagels, muffins, cakes, biscuits, cookies, pies, coffee beans and ground coffee, sandwiches, soups, chili, soft drinks, juice, and prepared non-alcoholic beverages namely, coffee, specialty coffees including cappuccino, hot chocolate, and tea.

• SERVICES: (1) Sit-down and take-out restaurant services

Page 16: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Certification Marks

Page 17: Protecting Intellectual Property And Trade Secrets (Oct29.08)

How Many Trade-marks Can Be Registered

To Protect This Product?

Page 18: Protecting Intellectual Property And Trade Secrets (Oct29.08)

TRADE-MARK:                                      

REGISTRATION: TMA562648 (Color is claimed)

TRADE-MARK:                                      

REGISTRATION: TMA290252 (shape of the box)

DISTINGUISHING GUISE:                                       REGISTRATION: TMA164635 (tread design)

TRADE-MARK:

                                     

REGISTRATION: TMA355239

TRADE- MARK:

TOBLERONE

REGISTRATION: TMDA051412

Page 19: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Why License Intellectual Property?Why License Intellectual Property? Expand existing market share (eg. franchising)

Expanding into new territories (eg. setting up international affiliates)

Co-branding arrangements (eg. “Intel Inside”, MBNA credit cards with universities)

Page 20: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Licensing Intellectual PropertyLicensing Intellectual PropertyGrant of License. Licensor hereby grants to

Licensee, for the internal use of the Licensee only, a non-exclusive, non-transferable, revocable and royalty-free license (the “License”) to use the Intellectual Property for the purpose of providing software development to clients exclusively located in the United States of America, with a focus on the provision of micro payment services in connection with corporate clients in retail. Unless prior written approval is obtained from the Licensor, the Licensee shall not use the Intellectual Property for any other purpose.

Page 21: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Licensing Intellectual PropertyLicensing Intellectual PropertyLicense Restrictions. The grant of License is subject to the following restrictions:1. Licensee shall use the Intellectual Property only in the United

States of America. 2. Licensee shall not use or distribute the Intellectual Property for

any purpose outside of the joint venture. 3. Licensee shall not market, distribute, export, translate, transmit,

merge, modify, transfer, adapt, loan, rent, lease, assign, share, sublicense or make available to another person or individual the Intellectual Property in any way, in whole or in part.

4. Licensee agrees to take all precautions to prevent third parties from using the Intellectual Property in any way that would constitute a breach of this Agreement, including without limitation, such precautions as Licensee would otherwise take to protect its own intellectual property and confidential information.

Page 22: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Other Intangible Business AssetsOther Intangible Business Assets

Confidential information

•Trade secret•Customer lists or book of business•Knowledge revealed to your employees, customers, joint venture partners, service providers, that is not in the public domain

Page 23: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Protecting trade secretsProtecting trade secrets Non-solicitation clause for clients, partnersNon-solicitation clause for clients, partners

The Partner agrees that The Partner agrees that during the term of this during the term of this Agreement and for one year following the Agreement and for one year following the terminationtermination of the Agreement, whether the of the Agreement, whether the termination was by the Partner or by the Service termination was by the Partner or by the Service Provider, and regardless of the reason for Provider, and regardless of the reason for termination, termination, the Partner shall notthe Partner shall not, either directly , either directly or indirectly, or through any other person, firm or or indirectly, or through any other person, firm or corporation, corporation, solicit any employeesolicit any employee of or individual of or individual working under contract for the Service Provider to working under contract for the Service Provider to leave the employment of the Service Provider to leave the employment of the Service Provider to become employed by the Partner or employed by become employed by the Partner or employed by any person, firm or corporation engaged in any person, firm or corporation engaged in competition with the Service Provider. competition with the Service Provider.

Page 24: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Protecting Trade SecretsProtecting Trade Secrets Non-solicitation clause for employeesNon-solicitation clause for employees

6.16.1 Clients and Customers: Clients and Customers: The Employee agrees that The Employee agrees that during the continuance of this Agreement and following the during the continuance of this Agreement and following the termination of employment, whether by the Employee or the termination of employment, whether by the Employee or the Corporation, with or without cause, the Employee shall not, Corporation, with or without cause, the Employee shall not, for a period of for a period of eighteen months following the terminationeighteen months following the termination or or voluntary withdrawal, either directly or indirectly solicit or voluntary withdrawal, either directly or indirectly solicit or approach any client or customer of the Corporation for his or approach any client or customer of the Corporation for his or her own benefit or for the benefit of any third person or her own benefit or for the benefit of any third person or organization.organization.

6.26.2 Employees:Employees: The Employee agrees that during the The Employee agrees that during the continuance of this Agreement and following the termination continuance of this Agreement and following the termination of employment, whether by the Employee or the Corporation, of employment, whether by the Employee or the Corporation, with or without cause, the Employee shall not, for a period of with or without cause, the Employee shall not, for a period of eighteen monthseighteen months following the termination or voluntary following the termination or voluntary withdrawal, either directly or indirectly through an agent or withdrawal, either directly or indirectly through an agent or third party solicit, approach any employee of the Corporation third party solicit, approach any employee of the Corporation for the purpose of leading such employee to leave his or her for the purpose of leading such employee to leave his or her employment. employment.

Page 25: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Protecting Trade SecretsProtecting Trade Secrets Non-compete clauseNon-compete clause

Covenant Not To Compete. (a) Employee agrees not to compete with Company in the restaurant equipment supply business while working for Company and for a period of 18 months after termination of employment within a radius of 50 kilometers of Toronto.

(b) For purposes of this covenant not to compete, competition is defined as soliciting or accepting employment by, or rendering professional services to, any person or organization that is or was a client of Company during the term of Employee's work with Company.

Page 26: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Protecting trade secretsProtecting trade secrets Non-disclosure clause for employee or contractor:Non-disclosure clause for employee or contractor:

Employee acknowledges and agrees that any Confidential Information that it receives Employee acknowledges and agrees that any Confidential Information that it receives from EMPLOYER is secret, privileged and confidential. Employee agrees that disclosure from EMPLOYER is secret, privileged and confidential. Employee agrees that disclosure of Employer's Confidential Information, in its original form or by way of summary or of Employer's Confidential Information, in its original form or by way of summary or analysis, could cause EMPLOYER irreparable harm and damage. Accordingly, Employee analysis, could cause EMPLOYER irreparable harm and damage. Accordingly, Employee agrees to hold Employer's Confidential Information secret and in strict confidence at all agrees to hold Employer's Confidential Information secret and in strict confidence at all times and not disclose such Confidential Information in its original form, or by way of times and not disclose such Confidential Information in its original form, or by way of summary or analysis, to any person, except as provided in this Agreement. Employee summary or analysis, to any person, except as provided in this Agreement. Employee agrees not to use Employer's Confidential Information for personal benefit or for the agrees not to use Employer's Confidential Information for personal benefit or for the benefit of third parties. benefit of third parties.

Upon completion of this Agreement: (a) Employee shall cease all use of Employer's Upon completion of this Agreement: (a) Employee shall cease all use of Employer's Confidential Information; (b) Employee shall promptly return to EMPLOYER all tangible Confidential Information; (b) Employee shall promptly return to EMPLOYER all tangible Confidential Information of EMPLOYER, including all copies, reproductions, summaries, Confidential Information of EMPLOYER, including all copies, reproductions, summaries, memos, correspondence or compilations, so that it no longer has any of such memos, correspondence or compilations, so that it no longer has any of such information in it possession or under its control in any format whatsoever, including information in it possession or under its control in any format whatsoever, including without limitation electronic and paper formats; (c) Employee shall cease any and all without limitation electronic and paper formats; (c) Employee shall cease any and all work in connection with and any further use of Employer's Confidential Information; (d) work in connection with and any further use of Employer's Confidential Information; (d) Employee’s duty of confidentiality under this Agreement and law survives the Employee’s duty of confidentiality under this Agreement and law survives the termination or completion of this Agreement.termination or completion of this Agreement.

The limitations regarding use and disclosure referred to in this Confidentiality The limitations regarding use and disclosure referred to in this Confidentiality Agreement shall not apply to any part of the Confidential Information that is (a) already Agreement shall not apply to any part of the Confidential Information that is (a) already known to Employee prior to disclosure by EMPLOYER; (b) in the public domain, or known to Employee prior to disclosure by EMPLOYER; (b) in the public domain, or subsequently disclosed to the public other than by breach of this Agreement; (c) subsequently disclosed to the public other than by breach of this Agreement; (c) independently developed by Employee without reference to the Confidential independently developed by Employee without reference to the Confidential Information; (d) disclosed by Employee with the prior written approval of EMPLOYER; (e) Information; (d) disclosed by Employee with the prior written approval of EMPLOYER; (e) lawfully disclosed to Employee by a third party without breach of this Agreement; or (f) lawfully disclosed to Employee by a third party without breach of this Agreement; or (f) required by law to be disclosed.required by law to be disclosed.

Page 27: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Protecting Confidential InformationProtecting Confidential Information

H.L. Staebler Company Limited v. AllanH.L. Staebler Company Limited v. Allan [2008] ONCA 576 [2008] ONCA 576 (August 2008)(August 2008)

Staebler is a large insurance broker selling commercial, Staebler is a large insurance broker selling commercial, personal and group benefits insurance in Waterloo, Ontariopersonal and group benefits insurance in Waterloo, Ontario

Operating for over 100 years; 2003 had over 50 employees, at Operating for over 100 years; 2003 had over 50 employees, at least 12,000 clients and $5.5 million in annual sales;least 12,000 clients and $5.5 million in annual sales;

2 employees worked for Staebler with written employment 2 employees worked for Staebler with written employment contracts – one had 75-100 clients, the other had 100 clientscontracts – one had 75-100 clients, the other had 100 clients

Employees were not to conduct business with any clients for Employees were not to conduct business with any clients for 12 months after termination, or to solicit customers for 18 12 months after termination, or to solicit customers for 18 months after terminationmonths after termination

At trial, Staebler was awarded $978,208 and $892,008 against At trial, Staebler was awarded $978,208 and $892,008 against the 2 employees and their new employerthe 2 employees and their new employer

Overturned at Ontario Court of Appeal - the non-compete and Overturned at Ontario Court of Appeal - the non-compete and non-solicitation were too broad and therefore unenforceable.non-solicitation were too broad and therefore unenforceable.

Page 28: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Protecting Trade SecretsProtecting Trade Secrets There are numerous cases involving There are numerous cases involving

enforcement of non-solicitation and non-enforcement of non-solicitation and non-compete clauses:compete clauses:

RBC Dominion Securities Inc. v. Merrill Lynch RBC Dominion Securities Inc. v. Merrill Lynch Canada Inc. et al Canada Inc. et al [2008] SCC 54 Supreme [2008] SCC 54 Supreme Court of Canada (local RBC office defecting in Court of Canada (local RBC office defecting in Merrill Lynch office virtually leaving the entire Merrill Lynch office virtually leaving the entire office empty of staff and clients)office empty of staff and clients)

Ash Temple Limited v. Croney, Gootveld and Ash Temple Limited v. Croney, Gootveld and Healthco (Canada) LtdHealthco (Canada) Ltd. [2000] Ont. C.A. . [2000] Ont. C.A. (dentist with influential contacts at dental (dentist with influential contacts at dental equipment supplier taking clients to equipment supplier taking clients to competitor)competitor)

Page 29: Protecting Intellectual Property And Trade Secrets (Oct29.08)

SummarySummary

So how do we protect intangible So how do we protect intangible assets?assets?

Patent ActPatent Act Trademarks ActTrademarks Act Copyright ActCopyright Act Confidential Information through Confidential Information through

contractcontract

Page 30: Protecting Intellectual Property And Trade Secrets (Oct29.08)

Teresa Cheung Teresa Cheung LL.M. (Intellectual Property) LL.B.LL.M. (Intellectual Property) LL.B.

[email protected]@wiresjolleyllp.com