Category Archives: Canada

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.

Draft Guidelines Published by the Patented Medicine Prices Review Board

The Patented Medicine Prices Review Board (the “Board”) recently published draft Guidelines to replace the current Compendium of Policies, Guidelines and Procedures, leading up to the coming into force of the amended Patented Medicines Regulations on July 1, 2020. The draft Guidelines are needed to facilitate the implementation of the upcoming changes to the Regulations, including: (i) the additional price regulatory factors for consideration by the Board when assessing whether the price of a patented medicine is excessive; (ii) updates to the schedule of comparator countries to be used by the Board for international price comparisons; and (iii) changes to reporting requirements for patentees. Interested parties can make written submissions to the Board on the draft guidelines during the consultation period, which ends on February 14, 2020.

For a more detailed review of the draft Guidelines, please refer to the Fasken bulletin PMPRB Publishes Draft Guidelines to Operationalize Amendments to the Patented Medicines Regulations authored by Ingrid VanderElst and Mark Vanderveken.

Sights and Smells: a New World of Senses in the Field of Non-traditional Trademarks

Introduction

The revised Trademarks Act came into force on June 17, 2019 and brought new waves of changes to the trademark legal landscape in Canada. The Act is now more harmonized with international practices and standard procedures of trademark law by adhering to international treaties and implementing the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice classification) and the Madrid Protocol for trademark applications with the World Intellectual Property Association, allowing access to more than 100 jurisdictions worldwide in a single application.

Non-Traditional Trademarks

To align Canadian trademark law with international standards, the revised Act now recognizes new non-traditional trademark signs, such as colours, three-dimensional shapes, holograms, moving images, modes of packaging goods, sounds, scents, tastes, textures and the positioning of a sign. This amendment opens the door for businesses in the Canadian market to let creativity run free and protect innovative forms of marketing.

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Destruction and Delivery Up: a Year in Review

Copyright and trade-mark owners whose IP is infringed may seek a variety of remedies against the perpetrators, including damages, injunctive relief and legal costs. Psychologically though, destruction and delivery up may provide the most satisfaction. Specifically provided for in the respective statutes,  these remedies allow the successful plaintiff to either compel the infringer to destroy the counterfeit items under oath or actually take possession of them. In this post, we survey destruction and delivery up orders granted and denied in 2019. Overall, the year’s rulings are mixed, demonstrating that even as the victim of infringement, “you can’t always get what you want.”

Luxury Goods

Luxury goods are common targets for counterfeiters, as this year’s crop of destruction and delivery up orders illustrates. Appearing four times before the Federal Court was Nathalie Marie Tobey, aka Nathalie Henrie. Operating out of a clandestine retail establishment on Old Yonge Street, Ms. Tobey was accused of selling counterfeit Givenchy, Louis Vuitton, Dior and Celine merchandise.  Her defence was essentially that a well-informed member of the public would not confuse the goods she was selling with the plaintiffs’. Justice Norris dismissed this defence as having “no hope of success whatsoever,” before ordering the delivery up of all goods bearing the plaintiff’s subject trademarks, at least, those not already seized by the Toronto Police Service.

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IP Strategies for the Cannabis Industry

How the Canadian cannabis industry has sparked interest in one of the lesser known IP rights

Introduction

Intellectual Property (“IP”) typically provides a significant commercial advantage in the marketplace.  With the legalization of cannabis in Canada in 2018 and increasing competition among cannabis producers, the cannabis industry has been exploring ways to protect its cash crop.  Given that proprietary varieties of cannabis plants are highly valued in the cannabis industry, a lesser known and very specific type of IP right called Plant Breeders’ Rights (“PBR”) may see a rise in prominence.  Cannabis producers would be well advised to consider how PBR can be used to protect their commercially valuable proprietary varieties and supplement their existing IP arsenal.

PBR Eligibility and Scope of Protection

The federal Plant Breeders’ Rights Act enables the protection of a plant variety where that variety is:

  1. new, in that its propagating or harvested material has not been sold by or with the concurrence of the breeder inside or outside Canada within a prescribed time period (either one, four, or six years) before the filing date of the application;
  2. by reason of its identifiable characteristics, it is clearly distinguishable from all varieties whose existence is a matter of common knowledge at the filing date of the application;
  3. stable in its essential characteristics, in that after repeated propagation it remains true to its description; and
  4. having regard to the particular features of its sexual reproduction or vegetative propagation, it is sufficiently homogeneous (i.e. in the event of sexual reproduction or vegetative propagation in substantial quantities, any variations in characteristics are predictable, capable of being described, and commercially acceptable).
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