In this presentation, Rob McDonald and Stephen Parker discuss the following topics related to intellectual property: - IP Due Diligence in Commercial Transactions - Common IP Disputes that Arise in Business - The New Copyright Modernization Act

1. Intellectual Property And Business Law
1) IP Due Diligence in Commercial Transactions
2) Common IP Disputes that Arise in Business
3) The New Copyright Modernizaton Act
Presented to
Fraser Milner Casgrain LLP
Business Law Department
November 5, 2012
Presented by:
Rob McDonald and Stephen Parker
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2. IP DUE DILGENCE
IN COMMERCIAL
TRANSACTIONS
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3. Identify the Type of Transaction
• Merger or acquisition
• Share purchase vs. asset purchase
• IPO
• Out source contract
• Initial financing
• Bridge financing
• Licensing
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4. Identify Parties to the Transaction
• Buyer
• Seller
• Bank
• Underwriter
• Licensor
• Licensee
• Angel Investor
• Receiver/Trustee
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5. Specific IP Due Diligence Issues
Types of Intellectual Property:
 Trade‐marks (Including domain names)
 Copyrights
 Patents
 Industrial Designs
 Confidential Information and Trade Secrets
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6. Identify Relevant IP Documentation
 Identify all existing intellectual property rights
 Determine potential encumbrances on such rights
 Review representations and warranties in respect of
IP rights
 Review covenants and indemnities relating to IP
rights
 Determine ownership of IP rights
 Review and assess infringement claims
 Review and assess strength and value of IP rights
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7. Typical IP Agreements
 Confidentiality/Non‐disclosure Agreements
 Employment Agreements
 IP ownership Agreements
 Licences
 Assignment Agreements
 Co‐Branding Agreements
 Software Development Agreements
 Manufacturing and Supply Agreements
 Security Agreements
 Releases
 Software Escrow Agreements
 Co‐existence Agreements
 Forbearance Agreements
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8. Conducting Due Diligence
• Checklist
• Manual Document Review
• Electronic document and data review
• Interviews
• On‐sight tours
• Field Visits
• Product Demonstrations
• Searches of Intellectual Property Registers
• Searches of Security Registers
• Internet Searches
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9. Trade‐mark Due Diligence
• Review trade‐mark portfolio
• Consider multi‐jurisdictional issues
• Assess validity and enforceability of trade‐marks
• Assess scope and strength of trade‐marks
• Assess potential infringement of trade‐marks
• Assess potential infringement of third party marks
• Review all registered and unregistered trade‐marks
• Review Co‐existence Agreements
• Review corporate names, trade names, domain names
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10. Patent Due Diligence
• Review registered patents
• Review status of pending applications
• Evaluate prior art and competitor’s patents
• Prepare patentability opinion
• Prepare registerability opinion
• Prepare freedom to operate opinion
• Assess validity and enforceability of patents
• Analyze prior disclosures/confidentiality and non‐
disclosure agreements
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11. Copyright Due Diligence
• Ownership
• Moral rights
• Joint Authorship
• Works created in course of employment v. works
created by independent contractor
• Assess potential infringement by third parties
• Assess potential infringement of third party
copyrights
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12. Confidential Information/Trade Secret Due
Diligence
• Assess means by wish the entity protects confidential
information and trade secrets
• Determine reliance on and value of confidential
information and trade secrets
• Identify potential risks of disclosure
• Identify who has access to such information
• Review employment agreements
• Review confidential information for proper marking
and restrictions on availability
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13. Common IP Disputes that
Arise in Business
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14. TOP 10 IP TRAPS
COPYRIGHT
1. Ownership claim by
employee/independent contractor
2. Moral rights claims
3. Substantial similarity not just quantitative
4. Improper Assignment
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15. TOP 10 IP TRAPS
TRADE‐MARKS
5. Not registering and being restricted to
area of reputation
6. Assuming rights in corporate names and
trade‐names
7. Adopting non‐distinctive marks
8. Losing distinctiveness through loss of
control and improper licensing
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16. TOP 10 IP TRAPS
PATENT
9. Lack of ownership agreement
10. Public disclosure
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17. TYPES OF
INTELLECTUAL PROPERTY
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18. • Copyright
• Trade‐mark
• Patent
• Industrial Design
• Confidential Information/Trade Secrets
• Plant Breeder’s Rights
• Integrated Circuit Topographies
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20. DEFINE INTELLECTUAL
PROPERTY RIGHTS
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21. • Important to properly define what types of IP are included in
an Agreement
• May want very broad or very narrow definition depending on
the nature of the Agreement
• ex. Some Agreements may deal only with patents or
patentable inventions, others may include concepts, ideas and
methods, whether patentable or not
• ex. Some Agreements may deal only with registered trade‐
marks, others may include unregistered trade‐marks goodwill
and domain names
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22. OWNERSHIP OF
IP RIGHTS
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23. COPYRIGHT
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24. • General Rule‐ the author of a work is the first owner
of the copyright in that work (s.13.(1))
• Author is not defined but means the creator of work
• Exceptions to the general rule include:
– Work made in the course of employment
•Contract of service = employment
•Contract for services = independent contractor
– Photographs and engravings
– Crown copyright
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25. Major Exception:
Work Made in the Course of Employment
13 (3) Where the author of a work was in the employment of
some other person under a contract of service or
apprenticeship and the work was made in the course of his
employment by that person, the person by whom the author
was employed shall, in the absence of any agreement to the
contrary, be the first owner of the copyright, but where the
work is an article or other contribution to a newspaper,
magazine or similar periodical, there shall, in the absence of
any agreement to the contrary, be deemed to be reserved to
the author a right to restrain the publication of the work,
otherwise than as part of a newspaper, magazine or similar
periodical.
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26. TRADE‐MARKS
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27. General Rule:
• The first to use a trade‐mark in commerce in a
particular jurisdiction acquires certain rights in such
mark
• Several exceptions:
– foreign registrations
– loss of trade‐mark rights,
– territorial limitations
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28. REGISTERED v. UNREGISTERED TRADE‐MARKS
AND
EXCLUSIVE RIGHTS
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29. PATENTS
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30. General Rule:
• The inventor is the first owner
MAJOR EXCEPTION:
– Inventors often assign ownership rights to other entities
– No rule requiring an inventor to assign rights to an employer
– Inventions created or conceived within the scope of the inventor’s
employment
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31. LOSS OF
TRADE‐MARK RIGHTS
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32. • It is critical to continue to use a trade‐mark properly in order
to retain rights
• Several events can result in loss of trade‐mark rights, including
non‐use, improper registration and loss of distinctiveness
• Distinctiveness is the ability of a trade‐mark to distinguish the
products and services of one owner’s mark from those of
another
• AVOID CONFUSION!
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34. TRADE‐MARK CHECKLIST
Using the trade‐mark
___ Always capitalize at least the first letter of the trade‐mark
___ Do not pluralize trade‐marks
___ Do not use trade‐marks as a verb
___ Do not change the appearance of a design trade‐mark
___ Use proper marking (® for registered, TM for unregistered)
___ No generic use of trade‐mark
___ No use of the trade‐mark by others without license and
control (see s.50(2) – presumptions if public notice is given)
___ Monitor in‐house and outside use of the trade‐mark
___ Do not ignore infringements
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35. MORAL RIGHTS
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36. •Copyright is actually a bundle of several
exclusive rights that exist by virtue of the
Federal Copyright Act, R.S.C. 1985, c‐32:
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37. •Part I Rights
• Part I rights are set out in Section 3 of the Act and
include the right to produce, reproduce, perform, or
publish a work or any substantial part of a work, the
right to communicate a work to the public by
telecommunication, and the right to rent out certain
works. Part I copyrights also include the sole right to
authorize or permit any of these things.
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38. Moral Rights
• The bundle of rights also includes moral rights, which are
essentially the author’s right to the integrity of the work
and the right to be associated to the work by name (s.14.1).
Moral rights accrue only to the author of a work, not the
owner.
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39. S. 14(1) – Defines the right
S. 14(2) – cannot be assigned, but can be waived
S. 28.2(1) ‐ Infringement
The author’s right to the integrity of a work is
infringed only if the work is, to the prejudice of the
honors or reputation of the author,
(a) distorted, mutilated or otherwise modified; or
(b) used in association with a product, service, cause or
institution.
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41. • Always deal with moral rights in a written agreement
with the author
• Employers cannot waive moral rights on behalf of an
employee
• Consider carving out reasonable exceptions to a
general waiver, ex. attribution rights, portfolio rights
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43. The preceding presentation contains examples of the kinds of
issues companies dealing with Intellectual Property Law could
face. If you are faced with one of these issues, please retain
professional assistance as each situation is unique.

44. Thank You!
Rob McDonald
Fraser Milner Casgrain LLP | www.fmc‐law.com
T: 780 423 7305 | F: 780 423 7276
E: rob.mcdonald@fmc‐law.com
Stephen Parker
Fraser Milner Casgrain LLP | www.fmc‐law.com
T: 780 423 7368 | F: 780 423 7276
E: stephen.parker@fmc‐law.com