Prove who owns new ideas and creations

New and unique intellectual property (IP) can become one of your most valuable assets. Therefore, it is important to understand and define if and how an inventor, a designer, an author, etc. can claim ownership of their created IP.

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Good practices to define IP ownership

Defining who owns IP can be a challenge, since the creation of IP is often a collaborative process. Avoid misunderstandings and future conflicts by following good practices.

Inventions (patents and industrial designs)

  • Use invention assignment clauses in partnership, employment and third party contracts to ensure inventions are identified and assigned as soon as they are developed or created.
  • Agree on and document the ownership of inventions in partnership, employment and third party contracts.

Outcomes if ownership is not agreed upon

In Canada, patents are granted on a first-to-file basis. Without contracts defining the ownership of an invention, an inventor (e.g. an employee or a contractor) could file and automatically become the first owner of a patent.

Brands (trademarks)

  • Use assignment clauses in partnership, employment and third party contracts to ensure the assignment of trademark rights, together with the goodwill of the business.
  • Agree on and document the expected ownership of trademarks and goodwill in partnership, employment and third party contracts.
  • Set guidelines outlining the quality and scope of the goods and services your partners will sell in association with any trademarks.

Outcomes if ownership is not agreed upon

Without contracts that define who can file and own brands, an employee or a contractor could register and become the owner of a trademark before you do. While using an unregistered trademark may provide rights under common law (in Québec, the Civil Code of Québec acts as a functional equivalent), should a dispute arise, you could be looking at a long, expensive legal battle over who has the right to use the trademark.

Unless license contracts specify the expected quality and scope, your licensed partners (manufacturers, licensees, franchisees) could use your trademark in ways that may damage its value.

Creations (copyright)

  • Use employment and contractor agreements to clearly define the expected copyright authorship and ownership of copyrighted materials.
  • If you are licensing copyright materials (e.g. a training guide, web text or a design), ensure that moral rights are waived in the transfer of the copyrighted materials.
  • Include a copyright statement (©, year of first publication, owner) prominently on the copyrighted work to serve as a public notice.

Outcomes if ownership is not agreed upon

Without legal ownership or rights under a license agreement, you may not be able to use the material even if you have paid the person who authored it.

Moral rights protect the integrity of the work so it can stay free from modification and the right to be or not to be named as the author of the work. If moral rights are not waived, you may be unable to modify the material and be obliged to name the author of the work for each copy.

Confidential business information (trade secrets)

  • Record the trade secrets and keep any trade secret information under lock and key and/or electronic encryption.
  • Maintain rigorous confidentiality through non-disclosure and confidentiality agreements with employees and external contractors.
  • Keep disclosures at a minimum, and only reveal your secrets on a need-to-know basis. If you do need to share trade secrets, keep a record of what information was disclosed, to whom and when.

Outcomes if ownership is not agreed upon

While recording the trade secret may prove your ownership, the value of a trade secret can be lost when the trade secret is shared. Seeking compensation when someone has breached a confidentiality agreement can be hard. You may need to prove that measures were taken to secure the confidentiality of the trade secret information.

Engaging in open innovation

Consider the effects of engaging in open innovation on your ownership of any resulting IP. Open innovation policies usually mean that employees and partners are encouraged to share ideas early on in the development stage. This may reduce your ability to seek and acquire the related IP rights.