The past two months have been marked by
unprecedented turmoil for the British royal family, after the announcement by
the Duke and Duchess of Sussex, Prince Harry and Meghan Markle, that they would
step down as senior members of the royal family and entertain their own
financial independence. Under a new working arrangement, they will be free to
earn professional income and will have more liberty to pursue their charitable
endeavours. Further details on the specific arrangements can be found here.
In anticipation of their new
projects, a trademark application and a domain name registration for SUSSEX
ROYAL had been sought in the UK. Following a recent intervention by Her Majesty
the Queen herself, however, the use of the term “royal” has now been
disallowed. Since the Duke and Duchess of Sussex would no longer be serving as
“royal” members and representatives, as they gave up their royal duties, then
there was no justification for them to further use this term. The UK trademark
application for SUSSEX ROYAL was thereby withdrawn.
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 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.
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.
Interlocutory injunctions remain difficult
to obtain in trademark infringement cases. To obtain an interlocutory
injunction, the moving party must satisfy a three-part test. A party must show
that: (1) a serious issue has been
raised; (2) irreparable harm will result if the injunction is not granted; and
(3) the balance of convenience favours the moving party. Over the years parties
seeking injunctive relief in trademark infringement cases have faced difficulty
satisfying the irreparable harm branch of the test. In order to satisfy the
court that irreparable harm will result, the court requires clear and
non-speculative evidence of harm that could not be compensated for by an award
of damages at trial. This has proven to be difficult for parties for among
other reasons, the fact that often in these cases it is in fact possible to
quantify the harm that has and/or will be done and accordingly compensate the moving
party through an award of damages at trial. Canadian courts have recently
provided more insight on the evidence required to support a request for
injunctive relief.
In the 2017 decision of Sleep Country Canada Inc. v. Sears Canada
Inc., 2017 FC 148, Sleep Country Canada Inc. (“Sleep Country”) was granted
an interlocutory injunction against Sears Canada Inc. (“Sears”) to prevent
Sears from using its slogan: “THERE IS NO REASON TO BUY A MATTRESS ANYWHERE
ELSE”, pending the final determination of Sleep Country’s trademark
infringement action against Sears. Sleep Country alleged that Sears’ slogan
infringed Sleep Country’s trademarked slogan of “WHY BUY A MATTRESS ANYWHERE
ELSE”. The court accepted Sleep Country’s arguments and found that on a
balance, there was a likelihood of confusion between the time of the motion and
the disposition of the infringement action and that this confusion would result
in lost sales as a result of consumers being less aware and familiar of the
slogan’s association to Sleep Country. The court found that these associations
would consequently result in a loss of distinctiveness for the brand of Sleep
Country and this would in turn have an effect on the goodwill established by
Sleep Country.
