What is Intellectual Property?
Intellectual Property (IP) is the product of ingenuity and hard work according to Innovation Guelph (IG) industry specialist Tom Nagy, who explained that it often takes years in the making. More specifically, IP is “a creation of the mind and includes inventions, symbols, logos, pictures, design, literary and artistic works, client lists, the shape of packaging and more.” . While patents and trademarks are the most formalized forms of IP, copyright for creative works rests with the owner upon creation and does not require registration. Proprietary industrial design, which refers to the ornamental design of an object rather than its function (like the shape of the Coke bottle), can be registered quite quickly. Additionally, trade secrets, another form of IP (like secret recipes), do not require registration but can be quite valuable, so best practices are defined to guide protection of them.
For scaling businesses, IG client Devin Ramphal of Clean Air AI, says it is important to register IP because it removes a barrier to investment. “The probability of investment such as with angel networks increases with IP and it’s also a barrier that keeps competitors out,” he said. “It promotes growth and gives entities something to buy.”
Ramphal advises entrepreneurs to look at existing patents to understand the competitive landscape and to consider any gaps they may discover during their searches to strengthen their own. He also recommends the IP clinic at York University that will perform free IP searches and review the results with their clients.
“We have a patent for our SMART air filter that delivers air quality for SMART homes and businesses and commercial use. It can remove virus size particulate,” Ramphal said. As a tech company, one of Clean Air AI’s most important strategies is having unique IP to enhance the value of their company.
Nagy agrees with the importance of IP related to business valuation. “Registered IP is a business asset for raising funds, building partnerships and assuring clients who implement your product that they will have less worries. Potential buyers of your company would want to see that as well,” he said.
Additionally, Nagy says that registering IP is a business tool like insurance, where the value tends to be more evident in hindsight and more speculative up front. As for the process, it can be simple or quite complicated. He recommends getting the help of either a patent agent, an IP management firm (law) or an IG patent mentor. Often the process begins with a low-cost provisional patent that acts like a stake in the ground.
To demonstrate, another IG client, Sonya Denton, founder of weDstll Inc. says her company has a provisional patent and are planning to file the non-provisional patent in one year.
“I know software is difficult to patent however, I felt that it was important for us because I wanted to show that we think we have something of value worth protecting. The provisional patent adds to our investment portfolio,” she said.
Another consideration according to IG client Spencer Waugh, Founder of Ace Age, is that it is not enough to have a patent, IP owners need to think about its potential for the future too. “Even with the protection of a patent, it would take a lot of resources to enforce it if we were to come up against big companies with deep pockets,” he said. Waugh says he didn’t anticipate the process would require such a long period of time – from provisional patent to fully granted can take five to six years, so plan accordingly.
Waugh offers two pieces of advice.
- If you are unsure whether you should or shouldn’t apply for a patent; consider whether your long-term strategy includes Venture Capital, an IPO or potential acquisition. If you want to offer public shares or attract significant investment, patents are important.
- Find an IP specialist and rely on them. Don’t waste your time trying to write it yourself – it’s like an unrecognizable language. Look for a firm that has deep experience but reasonable cost.
Nagy says people often think having a patent gives them the right to practice the innovation, it does not. “It gives you the right to exclude others from [using] it for the term of the patent,” he said. “In fact, people may find they need permission from an overlapping patent holder.”
Another common misconception Nagy shared is about what can be trademarked or patented. An invention can be patented if it has a useful purpose, has patentable subject matter, is novel, and is non-obvious. The patent could cover a composition, production process, machine, tool, new plant species, or an upgrade to an existing invention. A Trademark, on the other hand, is a sign or combination of signs used by a person or company to distinguish their goods or services from those of others. Each form of IP has guidelines and requirements, and some things, like ideas, descriptive phrases, etc., don’t qualify.
To better inform yourself about the impact of Intellectual Property on your business, check out the foundational courses provide by the Canadian Intellectual Property Office’s IP Academy or watch our Toolkit Tuesday Lunch & Learn from March 2021 – An Introduction to IP: What Is It, and What Do I Do With it?
 Canadian Intellectual Property Office, Discover Intellectual Property, https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr04639.html
What Can Be Patented https://www.upcounsel.com/what-can-be-patented
 Canadian Intellectual Property Office, Understanding Trademarks, http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr02360.html