Intellectual Property 101
Intellectual Property (IP) is a complex beast that most entrepreneurs and even inventors are none too comfortable with. There’s confusion on everything from roles (inventor vs. owner vs. author) to what IP means and how to protect it.
So, today we’re going to cover some of the basics, but this is by no means an exhaustive resource in itself, and we recognize that layered on top of this conversation are a lot of arguments made about bureaucracy, accessibility, bias, and reform. These are all important elements to the conversation, but today we’re really just focusing on step 1: what is it, how does it impact me, and how can I learn more?
What is Intellectual Property?
The Canadian Intellectual Property Office (CIPO) states that intellectual property (IP) includes intellectual assets such as, “inventions, new technologies, new brands, original software, novel designs, unique processes, and much more,” and provide a handy tool for business to assess if they have intellectual assets.
IP doesn’t seem to have a concise definition, but is instead an umbrella term for how to manage and protect those intellectual assets though patents, trademarks, copyright, and/or industrial design, to name a few. Some of these mechanisms require lengthy paperwork, others are automatically granted depending on circumstances.
Here’s a quick breakdown of five types of IP that you’ll often see, as defined by CIPO:
Patent: New or improved product, composition, machine or process. This one needs to be registered.
Industrial design: how something looks (also needs to be registered).
Trademark: “words, sounds or designs used to distinguish the goods or services.”
Copyright: the right to copy, i.e., “to produce, reproduce, publish or perform an original literary, artistic, dramatic or musical work.” (source)
Who owns the IP?
IP rights give the owner the rights to exclude/control who can use their intellectual assets. So, if someone else wants to use the asset they need to get their permission. For e.g. owning a patent gives you the rights to control who can make, use, sell or import an invention, whereas owning a trademark gives you the rights to use and control who can use a “mark’ in relation to goods and services.
While IP ownership applies to all forms of IP, patents seem to cause the most confusion, so let’s talk about that.
First things first, inventorship applies only to patents, and inventorship does not equal ownership (yes, those are both real and legal terms).
What defines an inventor? In order to be legally defined as an inventor, the person(s) must conceive and describe the invention in detail so that someone else could build the invention based solely upon what was described. While most inventors actively contribute to the building of an invention, they are not required to build it in order to be an inventor.
The inventor is not the person who proposed the problem that the invention solves for or the person who provides background information or passive or routine tasks involved in the work.
Clear as mud?
If you’re unsure who to list as your inventor(s) you wouldn’t be alone. In fact, one of the most common reasons that patents are invalidated is that the team listed someone who isn’t an inventor or didn’t include someone who is. So, it pays off to really understand who the legally defined inventor is.
What defines an owner? Ownership can be a person(s) or organization, and is defined as the entity that owns the intellectual property associated with the invention (or other intellectual asset). The inventor and the owner may not be one and the same, for e.g., when a university or company employs a technologist and writes in the contract that all inventions made on company time and/or with company materials belong to the entity and not to the technologist.
In other words…
An inventor is someone who creates (or co-creates) a patentable invention; it is also someone who fits within strict guidelines of a legal term. The IP owner depends on what agreements are in place in your country of residence and/or employment contract.
And why is IP protection important?
Many organizations and people, including The World Intellectual Property Office (WIPO) and CIPO talk about the benefits of protecting your IP in terms of the financial and competitive implications this has.
According to Stats Canada, small to medium sizes enterprises that register their IP are four times more likely to export, two times more likely to be high growth, and 27% more likely to seek financing. On their website, Invest Northern Ireland elaborates, stating that IP protection allows you to:
set your business apart from competitors
be sold or licensed, providing an important revenue stream
offer customers something new and different
form an essential part of your marketing or branding
be used as security for loans
Of course, not everyone agrees with the value of IP protection. For instance, there is much debate on the tug of war between patents and open-source, as well as arguments for and against abolishing patents altogether due to bias, costs, and complexity, to name a few.
But, patenting is only one piece of the IP puzzle, and let’s pretend, for the sake of argument, that patenting was reformed–easy to access and difficult to exploit.
How much does IP protection cost?
This depends on what kind of protection you are looking for, and if you work with a registered patent, ID or trademark agent when it comes to filing for formal IP protection (typically recommended). For example:
Patents: While it varies by country, in Canada your typical first patent can cost between CAD $10-20K*–a very real and cumbersome cost for many small to medium enterprises. This will last you 20 years in the country of filing, and again, depending on the jurisdiction, you will have to pay a recurring maintenance fee.
*This includes the cost of hiring an IP professional to draft and submit your application as well as represent you in front of the patent office. It is also the cost of just one patent. You need to secure patent protection in all of the countries that make sense for your business, depending on where your product will be made, used, sold and imported.
Industrial Design: In Canada, the cost that the time was writing was just under $500 to apply and around $350 in annual maintenance fees (source).
This does not include the cost of hiring an IP professional to draft, submit and represent you in front of the patent offices. Similar to patents, you need to secure ID protection in all of the countries where it makes sense for your business.
Copyright: Copyright is typically automatic (lifetimes + 50 years after death) but can be registered for a fee of around $50 (source). Most people can file these on their own, making this number an accurate reflection of the actual cost.
Trademark: This is an interesting one as you can register your trademark if you want to ensure sole ownership (10 years + renewal), but time also grants trademark protection, so if you’ve been around for a while you may want to look into that.
If you go the registration route, the application, in Canada, costs CAD $350-450, depending on how you register, but there are additional costs to be aware of as well, and similar to Industrial Design, this doesn’t account for the cost of hiring a trademark agent (check it out).
Where can I learn more?
Glad you asked! Unfortunately, we are not experts at Volition, but we are here to help you find your answers, so feel free to reach out any time. Otherwise, a few resources to get you started:
