39 Confidential And Proprietary Information
Michael Hrycay
Learning Objectives
Discuss why information that might be confidential or proprietary
Introduction
When you start your employment at a company, you may be asked to sign a non-disclosure agreement (NDA). This means that you agree never to reveal to anyone outside the company information that is specific to what the company does. This chapter will discuss types of confidential or proprietary information, and why it is so important that it is not revealed to the public.
Innovation starts with an idea—your idea. You discover a problem to solve or a gap to fill. Sometimes it starts with a fleeting thought that keeps coming back, or it’s a tug that won’t let go. Then it starts waking you up at night or it just won’t let you sleep. Your idea demands attention. It wants to go places, and you decide that you’re the one to take it there. What if you also decide to treat that idea as a valuable business asset right from the beginning? That’s what intellectual property (IP) is all about.
What is intellectual property?
IP is all around us. The inventions and products that we use every day all had their beginnings as IP. IP is what you create, invent or develop as a result of your intellectual activity. IP is valuable, and just like other types of property you own, it comes with legal rights.
Why does intellectual property matter?
There is no monopoly on good ideas. People discover new things every day. As you develop your idea into something tangible—whether that means building your business or designing and creating a product to manufacture or sell—someone else might be doing the same thing. Protecting your creation helps protect your ability to reap the benefits of your hard work. Inventing something new is a process. You do research. You try things. Some work, some don’t. When you invent, you learn. And you create IP. Virtually every innovation has some type of IP, right from the moment you start bringing your idea to life. Many businesses—both big and small—use their IP to introduce innovations to Canadians and bring new products into the marketplace. What if your “original creation of the mind” is next? Start giving your IP the attention it deserves.
Types of intellectual property
IP rights protect you as a creator. There are 4 main types of IP rights, and more than 1 might apply to your creation.
What if you wrote a song that is catching fire on Internet radio? You own the copyright to that work. Copyright means the sole right to produce or reproduce a work—or a substantial part of it—in any form.
Copyright Simply put, copyright means “the right to copy,” and copyright law prohibits others from copying specific types of works without your permission. Copyright is the exclusive legal right to produce, reproduce, publish or perform an original literary, artistic, dramatic or musical work, including computer software programs, sound recordings and communications signals. Regardless of their merit or commercial value, Canadian law considers all original creative works to be copyright material. Unlike with other IP rights, you own the copyright to your work as soon as you create it. In Canada, a certificate of registration of copyright can be used as evidence that copyright exists and that the person who registered it is the owner. Visit Canada.ca/copyright to learn how you can register your copyright. You can apply to register a copyright at any time after you create something. In most cases, copyright expires 50 years after the creator’s death.
Trademarks
What if you have a name for your new business that’s clever and catchy and that describes the essence of you and your product? You have created a trademark for your company. A trademark is what identifies your goods or services in the public mind.
A registered trademark is a way of protecting your corporate or brand identity. Everything that sets your business apart—its name, product and service names, slogans, logos, taglines, modes of packaging, moving images, holograms, colours, scents, tastes, textures and even sounds—produces a brand image that your customers come to know. By registering your trademark, you gain the exclusive right to use the mark across Canada for 10 years. Registration is renewable every 10 years after that. Trademarks that are not registered still offer some protection but can be challenging to enforce. Registering your trademark will help you protect your brand from imitation and misuse.
Why bother? Having a registered trademark can boost investor confidence, build your reputation and become a revenue source through licensing or franchising. What if your company name eventually becomes better known than your product? If you own it, you can leverage it. And why shouldn’t you? It’s your identity.
Patents
What if you are creating a new inkless, erasable marker that works on paper, whiteboards and glass? It might be eligible for a patent. Patents protect original inventions and can be applied to products, processes, machines, chemical compositions and improvements to any of these.
Patents give inventors exclusive rights to their inventions for up to 20 years, which can give them a competitive advantage in the market. You can generate revenue by manufacturing and selling your invention without it, but having a patent allows you to take action against other people who use, make or sell your invention without permission.
Why not just keep your information a trade secret? Things that are hard to conceive but easy to deconstruct are prime patent material. Patents can boost the confidence of investors and shareholders, because they demonstrate your commitment to protecting your invention. With a patent, you can also enter into licensing agreements that allow someone else to exploit your patent for a fee. You can also sell your patent. But you can’t license or sell something that you don’t own.
Industrial designs
What if you are developing a cool new item of wearable technology? You may be able to protect its novel look as an industrial design. Industrial design is about how something looks. It protects the visual features of shape, configuration, pattern or ornament, or any combination of these features applied to a finished article. In other words, it protects the appearance of a product.
Industrial designs can give a product a competitive edge in the marketplace. To sell a product, there are multiple factors to consider, including price, functionality, reputation and aesthetics. Consumers are often drawn to an eye-catching product; accordingly, manufacturers put a lot of money and know-how into their industrial designs. An effective design will appeal to the consumer and even create an emotional connection between the consumer, the product and the brand. It can influence consumer behavior, ultimately supporting the marketing and sales of the product. This is why a novel design is considered to be valuable IP.
Trade secrets
A trade secret is information that gives you a business advantage over a competitor. Trade secrets can include formulas, practices, designs, patterns, data compilations, devices or instruments. To consider something a trade secret, you need to keep it secret. Treating your innovation as a trade secret makes the most sense at the research and development stage. It also makes sense for innovations that could later be protected by patent or industrial design registration. Can your creation be reverse engineered? If not, protecting it as a trade secret might be an excellent strategy. If you want to protect sensitive information as a trade secret, make sure your employees, customers, vendors and visitors know that they are forbidden to disclose or in any other way misuse your trade secrets. Have them sign confidentiality agreements if you can. But beware: a trade secret is only a secret until someone finds out about it. If another person independently invents or discovers the details of your trade secret, there is nothing to stop them from using it, applying for a patent or publishing the information
Unless you register your design, you can’t make a legal claim of ownership. By registering your design, you gain the legal right to prevent others from making, importing, renting or selling an article that uses your design for up to 15 years. In Canada, there is no time limit for registering an industrial design, as long as the design has never been disclosed to the public, in Canada or anywhere in the world. If your design has been disclosed, you must file for registration within 12 months of its disclosure. It was your creativity, so why not own the rights to it?
Industrial Designs Vs. Patents
An industrial design protects the visual appearance of a product—its ornament, shape, pattern or configuration, or any combination of these features applied to a finished article.
A patent protects new products, processes, machines, chemical compositions and improvements to any of these. Most patents today are new and useful improvements of existing inventions.
