By Alison Wong
Information is a crucial business asset. To cite a common example, the formula for the carbonated soft drink Coca-Cola™ is a well-guarded industry secret. This secrecy creates a monopoly over production and sale of the drink, which generates billions of dollars of revenue for Coca-Cola’s parent company each year. If the recipe for Coca-Cola™ became public knowledge, or fell into the hands of a competitor, the company would likely lose enormous sums of money because everyone would know how to make their own, identical version of the drink. In short, the commercial value of the information would be lost.
The Canadian Intellectual Property Office (CIPO) defines “trade secrets” as “any business information that has commercial value derived from its secrecy.” To qualify as a trade secret, the World Intellectual Property Office notes the following criteria, in that the information must be “commercially valuable because it is secret; be known only to a limited group of persons; and be subject to reasonable steps taken by the rightful holder of the information to keep it secret.” Encryption of valuable information and requiring business partners and employees of a company to sign non-disclosure or confidentiality agreements would constitute examples of “reasonable steps” to ensure secrecy of information.
Unlike patent and copyright which are protected by federal statutes, there is no equivalent statue in Canada for trade secrets. Instead, the law of trade secrets is governed by common law principles and is enforced through tort claims such as breach of confidence or breach of fiduciary duty. In deciding whether information is a trade secret and in determining compensation for misuse of a trade secret, CIPO notes that courts consider the following factors:
To learn more about trade secrets, please refer to the following sources:
By Alison Wong
Intellectual property protection fosters creativity by rewarding innovators. Since inventions and works based on original ideas ultimately benefit the public, an owner of a patent or copyright is granted temporary, exclusive rights to produce, manufacture, distribute, and sell the invention or work. In turn, the rights owner typically reaps economic benefits. Our current system of intellectual property protection is thus based on individual ownership of rights. But does this system function equally well when the rights to knowledge or information are held by members of a community rather than by identifiable individuals?
According to the World Intellectual Property Organization (WIPO), traditional knowledge is a “living body of knowledge” that often forms part of a community’s cultural or spiritual identity. It is collectively developed, sustained, and passed from generation to generation within the community. In a general sense, traditional knowledge refers to the “content of the knowledge itself” and encompasses traditional cultural expressions and their associated signs and symbols. More narrowly, traditional knowledge also refers to knowledge that results from “intellectual activity in a traditional context” and includes “know-how, practices, skills, and innovations.” Similarly, while there is no universally accepted definition of traditional knowledge, the Government of Canada considers indigenous traditional knowledge to be the “know-how, skills, innovations, and practices developed by indigenous peoples related to biodiversity, agriculture, health, and craftsmanship.”
However, because it is collectively owned, traditional knowledge is difficult to protect using current intellectual property strategies. WIPO notes that indigenous people, local governments, and local communities are currently seeking intellectual property protections that can be classified under two key categories. Positive protection involves granting rights to communities that would enable them to promote and control the use of their traditional knowledge, thereby protecting it against commercial exploitation. Defensive protection aims to stop people who are not members of indigenous communities from acquiring intellectual property rights over traditional knowledge. For example, the United States Patent and Trademark Office ultimately revoked a patent that had been awarded to researchers at the University of Mississippi Medical Centre for the use of turmeric to treat wounds. The properties of turmeric were well-known throughout communities in India and had been documented in ancient Sanskrit texts.
WIPO’s Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore is currently undertaking negotiations with the goal of finalizing an agreement on an international legal instrument that would ensure the protection of traditional knowledge. The Committee recently concluded its 41st Session and recommended that WIPO’s 2021 General Assembly recognize the importance of the participation of indigenous peoples and local communities in the work of the Committee. It will be interesting to follow further developments in this area.
To read more about this topic, please refer to the following sources:
By Nitin Gomber and Paula Clancy
Business owners assume that incorporating a company is enough to secure a name and/or brand. Not so. NUANS searches done prior to incorporation only offer limited information as to potential trademark obstacles that could arise. Also, securing a corporate name does not guarantee that the name is available for use as a trademark. Provincial Ministries shift the onus of clearing a corporate name for use in commerce to business owners and specifically note that the incorporation of a company is not a defence to an infringement claim.
If the corporate name you have selected turns out to be confusingly similar to a trade name or trademark that was already in use in Canada, you could run into issues. A recent case provides some insight in this regard. In Hidden Bench Vineyards & Winery Inc. v. Locust Lane Estate Winery Corp. 2021 FC 156, an Ontario winery incorporated under the name "Locust Lane Estate Winery Corp." was sued by another winery, Hidden Bench Vineyards & Winery Inc., that had been selling wines under the brand "Locust Lane" for several years. Hidden Bench argued that while its LOCUST LANE trademark was unregistered, it still had common law rights by virtue of its prior use, and that the use of the trade name "Locust Lane Estate Winery Corp." would lead to confusion with Hidden Bench's goods in the marketplace.
Although the case was decided in Locust Lane's favour because the court determined that "Locust Lane" had geographic significance (i.e. it was the name of the road on which both wineries were located), and therefore could not function as a trademark, this is nonetheless a cautionary tale for businesses. Had the words not had geographic significance, the outcome would have likely been much different. Either way, both companies spent considerable amounts litigating this issue before the Federal Court.
To avoid these types of issues, it is strongly advisable to conduct comprehensive trademark availability searches prior to adopting a trade name or trademark. Searches will help you identify whether there are registered and unregistered trademarks, trade names, domain names, social media handles or other problematic references that could lead to issues down the road. The thoroughness of a comprehensive trademark search, properly analyzed by a trademark lawyer, can help you avoid liability at a relatively nominal cost, when compared to the costs of litigation.
For further information on trademark searching, please contact us.