Author: Demetre Vasilounis

Demetre Vasilounis

About Demetre Vasilounis

Demetre Vasilounis assists clients with a variety of wealth management and estate and family planning issues. Demetre regularly drafts wills, powers of attorney, domestic contracts, deeds of trust, and other documents relevant to succession planning. Demetre’s practice has a specific focus on the management of digital assets, including online accounts, cryptocurrency, and various forms of intellectual property.

Key Estate Planning Considerations for Individuals with Intellectual Property (Part III: Patents)

This is the third and final entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I introduced Ontario’s succession law regime, and provided an analysis of succession law vis-à-vis copyright law. Part II applied this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

Patents

In the previous two blog entries in this series, we have provided an overview of succession law in Ontario, and have applied its principles to the relevant provisions of copyright law and trademark law. This week, we conclude by taking this same approach to patent law; as you will see, patent legislation is in some ways more flexible and in other ways more restrictive than copyright or trademark legislation

A patent provides a time-limited, legally protected, exclusive right to prevent others from making, using and selling an invention. An invention can be a product, a composition (such as a chemical composition), a machine, a process, or an improvement upon any of these (with certain exceptions).

Unlike copyrights and trademarks, patents must be registered in order for their owners to exercise the rights associated with them. According to Subsection 27(1) of the Patent Act, only an inventor or their “legal representative” (which has a similar definition to that of the same term in the Copyright Act) may apply for a patent; thus, it may be possible for a testator’s executor to apply for a patent even after that testator’s death.

On that note, similar to copyrights, it is possible for an inventor’s employer to own a patent; however, the Patent Act does not have any provisions that explicitly state this. Instead, the common law establishes that there is a presumption that an employee will have ownership of their invention, and any resulting patent for discoveries made during the course of employment (See Comstock Canada v Electec Ltd (1991), [1991] FCJ No 987, 29 ACWS (3d) 257). In order to rebut this presumption, there must be an express agreement to the contrary, or the employee must have been hired for the express purpose of inventing or innovating. Therefore, in drafting their will with respect to patent rights, an individual should confirm with their contemplated executor that an employer does not have any potential claims to their patent rights.

Furthermore, with respect to assignments of patents via a will, Subsection 49(1) of the Patent Act allows for the transfer of a patent and/or the right to obtain a patent, in whole or in part. Thus, it would be prudent for an individual who does not apply for a patent for whatever reason while they are alive to inform their contemplated executors of their potential right to obtain said patent and should assign said right in their will. Furthermore, under Section 44 of the Patent Act, in a manner slightly different from copyrights and trademarks, the term of a patent is 20 years from the date that an application for said patent is filed. Thus, while a registered patent expires, the right to obtain a patent does not (subject to satisfying additional requirements for obtaining a patent, such as novelty, obviousness, utility and subject matter), and neither term correlates with the death of the inventor.

All of this suggests that if a testator created a new invention during the course of their life without patenting it, the beneficiaries who received the patent rights under the will (or the residuary beneficiaries if there was no specific patent-related provision in the will) could very well make a successful application for a patent and benefit from the rights of the patent over a 20-year period. The financial value of a patent could be significant, so individuals should definitely account for the potential value of the patent in determining how to distribute their estate. That being said, from a practical perspective it would be prudent for an inventor to apply for a patent while they are alive, as they would most likely be more familiar with key details necessary to complete the application than their beneficiaries would be.

Concluding Thoughts and Considerations

In making provisions for one’s intellectual property rights in their will, it is important to consider provisions related to both assignability and terms with respect to said intellectual property rights. For the former, the key federal statutes grant the ability for one to assign these rights through their will. For the latter, knowing when these rights expire is critical for determining how to manage them in an estate planning (as well as an overall financial planning) context, particularly because they may require continued attention and maintenance from an executor. In any event, it is clear that intellectual property is very much property for the purposes of will-making, and thus one should give any intellectual property that they may own just as much attention as any of their other key assets. Thus, it is essential for one to, prior to their death, keep their executors and trustees (and in many cases, their beneficiaries) in the loop about what intellectual property rights they do or may have.

Key Estate Planning Considerations for Individuals with IP (Part II: Trademarks)

Key Estate Planning Considerations for Individuals with Intellectual Property (Part II: Trademarks)

This is the second entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I introduced Ontario’s succession law regime, and provided an analysis of estates law vis-à-vis copyright law. Part II will apply this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

Trademarks

In the previous blog entry in this series, we looked at Ontario’s succession law regime. We also applied this regime to the provisions in the Copyright Act that related to the assignment of one’s copyright after their death. This week, we will take the same approach and apply it to trademark law, which definitely has some considerations that distinguish it from copyright law.

A trademark is a combination of letters, words, sounds or designs that distinguishes one company’s good or services from those of others in the marketplace. A trademark is mostly a business-related form of intellectual property, as it often signifies a company’s goods, services, reputation and brand.

A trademark can be registered in the name of an individual, or in the name of a corporation. As opposed to copyrights, which are more related to works of art and entertainment, trademarks pertain to the operation of a business. As such, it may make more sense for a variety of reasons, including from an estate planning perspective, to register a trademark in the name of a corporation. In doing so, a testator could transfer the shares of that corporation to a beneficiary, and that beneficiary would in effect own the trademark because they control the corporation that is the registered owner of said trademark.

The Trademarks Act is the key piece of legislation in this respect, and it contains multiple provisions relevant for the purposes of estate planning. The first is Subsection 48(1), which allows for the transfer of trademarks, whether registered (in which case CIPO requires a fee  of $100) or unregistered. On that note, as with copyrights, trademarks also do not need to be registered. By the same token, registration of a trademark is prudent, as registering a trademark help more effectively enforce trademark rights against third parties.

Unlike copyrights, however, the ownership of a trademark is not subject to the same types of term limitations. As per Subsection 46(1) of the Trademarks Act, the registration of a trademark is valid for an initial period of 10 years, and can be renewed for any number of subsequent 10-year periods as long as the owner pays the renewal fee ($400 for the first class of goods or services to which the request for renewal relates, and $125 for each additional class). However, the registration must occur within six months after the expiry of the initial or renewal period (although there are certain avenues for extending this timeline).

All that being said, individuals planning their estates should be weary of the common law rule against the partial assignment of trademarks. The Exchequer Court of Canada held in Great Atlantic & Pacific Tea Co. v. Canada (1945), [1945] Ex CR 233, 5 CPR 57 that if a person owns a registered trademark for use in Canada in association with certain goods, they cannot validly assign the trademark unless they also assign the whole of the goodwill of the business carried on by them in Canada in association with such wares. As such, an individual should avoid assigning a trademark to one beneficiary and the business with which said trademark is associated to a different beneficiary.

This principle only further supports the notion that registering a trademark in the name of a corporation and then gifting the shares of a corporation to a beneficiary is an effective way of managing a trademark for the purposes of estate planning. Trademark assignment can be a complicated legal area, so it is best for a testator not to separate the trademark from the business with which it is associated.

Key Estate Planning Considerations for Individuals with IP (Part I: Introduction & Copyrights)

This is the first entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I will introduce Ontario’s succession law regime, and provide an analysis of succession law vis-à-vis copyright law. Part II will apply this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

In the world of will-making, when we think about how the assets of the will-maker (usually referred to as the “testator”) are going to be distributed, we often think about what’s going to happen to their real estate, their vehicles, their jewellery or their other personal belongings. While it is natural for us to first turn our mind to property that is physical or tangible, it is important to ensure that we turn our focus to intangible property as well, as such property often requires more attention and direction.

One form of property that undoubtedly fits this definition is intellectual property. In making provision for one’s friends and family in their will, it is important to consider the financial and sociocultural impact of any intellectual property they may own, and manage such property accordingly. In this blog post, we will go over some key legal considerations, under Ontario and federal law, for the transfer of copyrights, trademarks and patents upon an individual’s death.

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