Intellectual Property Basics Every Canadian Business Owner Should Know

Copyright How It Protects Your Creative Work

Copyright automatically protects original creative works like written content, artwork, music, and software under Canadian law. Unlike patents or trademarks, you don’t need to apply for copyright protection, it exists as soon as the work is created. Still, registering your copyright through the Canadian Intellectual Property Office (CIPO) provides clear evidence of ownership if legal issues arise.

For businesses, registering and marking works with a copyright notice, using licensing agreements, and documenting ownership of creative output helps protect your investment in original content.

In Canada, copyright generally initially vests in the author, but there are important exceptions and contractual mechanisms that change this by default or by agreement:

1. Employees (Employer Ownership by Default)

Under the Canada Copyright Act (Section 13(3)), if a work is created by an employee “in the course of employment,” the employer automatically owns the copyright, unless the employment agreement provides otherwise. This is often referred to as a “work made in the course of employment” rule.

2. Independent Contractors (No Work-for-Hire Presumption)

For contractors, Canada does not have a true “work-for-hire” doctrine like the United States. In Canada, the copyright remains with the contractor (the author) by default. Even if the work is created under contract, the client does not automatically own copyright. To transfer ownership from a contractor to a client, the contract must include: (i) clear assignment of copyright, or (ii) a perpetual, worldwide, irrevocable license, if full ownership is not intended.  An agreement simply stating that the work is “work-for-hire” without a proper assignment clause will not suffice to transfer ownership under Canadian law.

Patent Protection for Your Inventions

A patent protects new inventions or processes that are useful, novel, and non-obvious. Think of patented technology, machinery, or unique chemical formulas. Filing a patent with CIPO gives your business the exclusive right to produce and sell the invention in Canada for up to 20 years.

To secure a patent, your business must submit a detailed application explaining the invention and how it works. Consulting a patent agent or a corporate lawyer early in the process is recommended to avoid missing key deadlines or application errors. Maintaining your patent with required fees helps ensure your innovations remain protected.

If you plan to expand internationally, it’s important to know that a Canadian patent only protects your invention within Canada. To protect your invention abroad, you’ll need to file patent applications in each country where protection is desired. One common approach is to file under the Patent Cooperation Treaty (PCT), which streamlines the initial filing process and allows you to pursue patent rights in over 150 participating countries through a single international application. Timing is critical—foreign filings typically must be made within 12 months of your initial Canadian filing to preserve your priority rights.

Trademarks Building and Protecting Your Brand

A trademark can be your business name, logo, slogan, or even unique sounds that identify your goods or services. Registering your trademark through CIPO protects your brand across Canada, not just where you currently operate.

Using unregistered trademarks provides some protection under common law, but registered trademarks offer stronger rights, including the ability to block others from using confusingly similar marks. This protection can extend not only to identical or near-identical names but also to marks that could cause confusion even when used in connection with different goods or services categories, particularly if your brand has acquired distinctiveness or is considered well-known. Regularly monitoring the market and using licensing agreements to manage use of your trademarks are critical steps in brand protection. Expanding your trademark registrations to cover multiple relevant classes of goods and services can help prevent others from registering or using similar names in related or overlapping industries.

Trade Secrets Keeping Business Information Confidential

Trade secrets include confidential business information like proprietary recipes, internal processes, or customer lists that provide economic value. Unlike other forms of IP, trade secrets are protected through contracts and company policies, not registration.

Once a trade secret is disclosed publicly, it generally loses its legal protection as secrecy is a defining characteristic of a trade secret. While you can still enforce confidentiality obligations against the party who breached their duties and caused the disclosure, it becomes extremely difficult, if not impossible, to enforce restrictions against third parties who subsequently receive and disseminate the information without any confidentiality obligations owed to you.

Simple Strategies to Safeguard Your Intellectual Property

• Register your rights: Secure your trademarks, patents, and copyrights where applicable.
• Use written agreements: NDAs, licensing agreements, and employment contracts help protect confidential information and define ownership of intellectual property.
• Monitor your IP: Regularly check for potential infringements or unauthorized use of your IP assets.
• Consult a business lawyer: Seeking professional legal advice can help you build a comprehensive IP protection strategy tailored to your industry.

Common Mistakes Canadian Businesses Make with IP

• Delaying trademark registration: Competitors can register similar marks, limiting your brand rights.
• Overlooking confidentiality protections: Failing to secure NDAs can lead to losing control over valuable information.
• Ignoring patent opportunities: Many innovations go unprotected simply because businesses miss early filing deadlines or don’t seek legal advice.
• Failure to confirm that contractor assign the copyright of their work products to you and that such works are treated as “works-for-hire”.

Next Steps to Protect Your Business

Intellectual property can be one of your business’s most valuable assets. Working with an experienced business lawyer can help you avoid costly mistakes and build a legal framework that protects your creative works, inventions, and brand.

At Gusto Law, we help Calgary and Alberta businesses understand and protect their intellectual property every day. Whether you need help with trademark registration, patent strategy, or protecting trade secrets, we’re here to guide you.

Contact us today to discuss how we can help safeguard your business’s future.

This article is for informational purposes only and does not constitute legal advice. For specific guidance, please consult a qualified business lawyer.