In(dustry) focus: consumer goods – a complete IP framework for entering the Canadian market

Lionel Fishman

Any inventions incorporated into Andy could be protected via a patent. For example, it’s possible that Andy’s specific composition or the way Andy allows users to access their data are new and non-obvious innovations and could each be the subject of a patent.

A patent must be applied for. A patent application includes a detailed specification and drawings describing how the invention works. The application ends with a set of claims outlining what the applicant claims as their invention for which they wish to be granted exclusivity. The patent application is then examined by the Canadian Patent Office. If and when granted, the patent provides the exclusive right to make, use, sell, and import the inventions claimed in the patent. A patent’s term lasts twenty years from when the patent application was filed, making a patent a strong tool to exclude competitors.

Timing is important. In Canada, a patent is void if the invention claimed in the patent was publicly disclosed by the applicant, or someone who obtained knowledge of the invention from the applicant, more than one year before the application for the patent was filed. A patent is also void if the invention claimed was already disclosed before the patent application was filed by another person who independently arrived at it. If possible, it is always prudent to prepare and submit a patent application describing and claiming the innovations before they are disclosed to the public.

Aside from any inventions incorporated into Andy, we could also protect Andy’s unique appearance via an industrial design registration. An industrial design registration protects any new features of shape, pattern, configuration or ornament that appeal to and are judged solely by the eye. For example, Andy’s ampersand shape, regardless of colour, might be registerable. By filing an application for registration of the design of Andy’s shape in black and white, we could protect all variations of Andy’s colours, including the limited-edition tartan. Timing is important for industrial design registrations as well. It would be best to apply for registration of Andy’s design when the 3D design is finalized or near-finalized, but before it is publicly disclosed. That said, like with patents, Canada does permit applicants to apply for registration of a design up to one year after they first publicly disclose the design.

An industrial design registration lasts 15 years from the date the application for registration was filed and is therefore an effective tool to exclude others from copying the design, particularly would-be infringers who are looking to make, sell, or import direct knockoffs of Andy.

Tamara Céline Winegust

Trademark law protects the goodwill associated with signs (or combinations thereof) used to distinguish one trader’s goods and services from those of others. A “sign” includes words, designs, three-dimensional shapes, etc. Trademarks are “used” with goods when, at the time of transfer in the ordinary course of trade, the mark is displayed on the goods themselves, their packaging, or is in any other way so associated with the goods that notice of the association is given. For services, “use” is deemed where the mark is used or displayed in the performance of advertising of the services. 

Under common law, trademark rights arise in the geographic area where the mark is used and possesses goodwill.

Federal registration can also be sought in connection with the goods and services with which the mark is used or intended to be used – once issued, it provides the owner with national exclusive rights to use the mark with those registered goods/services. Certain types of marks, like three-dimensional shapes (as may be with Andy), are considered as lacking inherent distinctiveness under the Trademarks Act, and evidence of “acquired distinctiveness” across Canada as of the filing date – usually arising from substantial use of the mark - must be submitted for the application to proceed. Also, if, in relation to the goods or services with which the mark is used/proposed to be used, the mark’s features are dictated primarily by a utilitarian function, then it cannot be registered. Registered rights are potentially perpetual and must be renewed every 10 years.

For Andy, it will be important to identify how the toy is being “used”. If sold in the normal course of trade as a product in its own right, then it may be possible to protect Andy in respect of both goods and services. However, if employed as a “free give away” to advertise services, protection may only be available in connection with services.

If Andy is used in a way that its three-dimensional shape builds goodwill and acquires distinctiveness, such three-dimensional shape may be defensible and registrable itself as a trademark, provided Andy’s features are not dictated primarily by a utilitarian function.

Beyond the physical appearance of Andy itself, any branding that appears on packaging for Andy could potentially have goodwill and be subject to a trademark application/registration. Likewise, if the shape of the ampersand represented by Andy has been used to distinguish Smart & Biggar’s goods and services, that underlying design may itself have common law protection and be capable of registration.

For any packaging, it will be important to ensure compliance with both federal and provincial regulatory law, including any requirements under the Charter of the French Language if in Québec.

Tamara Céline Winegust

Copyright subsists in every original literary, dramatic, musical and artistic work, and arises on creation. A copyright gives its owner the exclusive right to produce or reproduce, perform, and publish that work in any material form whatever (including authorizing others to do any of those things). The author of the work is, generally speaking, its first owner, and ownership can only be assigned in writing. Authors also possess moral rights in their works, including the right to the integrity of the work and, where reasonable, to be associated (or not) with the work by name or under a pseudonym. Such moral rights cannot be assigned, but they may be waived. For almost all works, protection lasts for the life of the author plus 70 years (extended from 50 years on December 30, 2022).

For works that are a design applied to a useful article, however, (or are artistic works from which the design is derived), where the article is reproduced in a quantity of more than fifty anywhere in the world, the Copyright Act limits enforceability in certain circumstances. Such limits do not apply where, for example, the work is used as or for a trademark or representation thereof or a label, or is a representation of a real or fictitious being applied to the article as a feature of shape, configuration, pattern or ornament. 

Registering copyright as a work is not mandatory, but it does create a (rebuttable) presumption that the copyright is valid and of the truth of the registered information, including authorship and ownership.  

The underlying design of Andy would be an “original artistic work”. Because it was created by a third party, unless that party died, and the requisite time has passed since their death (which may be possible), it will be important to ensure the proper assignments or licenses are in place to enable the reproduction of that design in three-dimensional form. It will similarly be important to ensure proper licensing is lined up to facilitate the use of the various designs to be applied to Andy. To the extent Andy is a “useful article”, there is some risk that copyright in Andy itself may not be enforceable; however, if the shape of Andy can be said to be a trademark or a “real or fictitious being”, that exception may not apply. 

Joshua W. Spicer 

There are typically two options available to stop the distribution of counterfeit products. First, the Trademarks Act and Copyright Act contain “Request for Assistance” (RFA) provisions that could help guard against importing counterfeit Andy products into Canada. Second, for marketing and sales of counterfeit Andy products occurring in Canada, usually an initial cease-and-desist letter would be sent, followed by litigation if the matter is not resolved.

In extraordinary cases, where there is significant infringement and a serious risk that evidence would be destroyed if proceedings were brought on notice, it may be possible to obtain an “Anton Piller” order allowing for the immediate seizure of counterfeit Andys. It may also be possible to collaborate with the Royal Canadian Mounted Police for criminal investigations in cases of large-scale counterfeiting.

A rights holder with a registered trademark or a registered or unregistered copyright may avail themselves of the RFA provisions by recording the rights with the Canadian Border Services Agency (CBSA). Border protection measures through the CBSA are not available for unregistered trademark rights, patents or registered industrial designs. Once filed, an RFA remains in force for a period of two years and may be renewed by the rights holder.

When suspect counterfeit products are detained, CBSA provides the rights holder with certain information, like photographs, to enable the rights holder to determine if the goods are counterfeit and sets a three-day period for the rights holder to signal that they wish to take action. If further action is intended, the CBSA will then issue its official notice with further details about the detained shipment, including importer information, and hold the shipment for a period of 10 days. If court proceedings are commenced before the end of the 10-day period and the CBSA is given notice, it will continue to detain the goods until the proceedings are disposed of, the court directs otherwise, or the rights holder consents to their release. Court proceedings unfold as described below.

When faced with an infringement of any of the intellectual property rights in Andy described above, including patent, industrial design, trademark or copyright, or in relation to goods detained by the CBSA, the infringer would invariably be put on notice by way of a cease-and-desist letter. Although there are currently no formal requirements, cease-and-desist letters typically identify the rights holder and lay out its relevant intellectual property rights, describe the alleged infringement, and conclude with a demand for the infringement to cease. Depending on the circumstances, the demand may also include a request for financial disclosure and monetary compensation and the identities of any suppliers. The parties will often enter into a formal settlement agreement if they come to a resolution.     

If the parties are unable to agree, the rights holder will usually need to decide whether to escalate the matter by commencing court proceedings. This is a significant decision that involves weighing the costs of litigation and the likelihood of success against the value of potential litigation outcomes. It is also possible that the infringer may raise valid defences in response to the cease-and-desist letter, such as prior art previously not known to the rights holder, discouraging further action. On the other hand, trademark owners face the additional concern that ongoing infringement could harm the distinctiveness of their mark, putting them in the position of having to police the marketplace or risk loss of their rights.     

Most cases to enforce intellectual property rights are brought in the Federal Court, which has more specialized knowledge of this area of law and whose judgments are enforceable across Canada. Proceedings can be brought by way of action or application. An action is commenced by way of statement of claim and involves document production, oral examination for discovery, potentially expert reports and a trial involving live testimony. The timeline to trial is usually around two years, although in the right circumstances, summary judgment or summary proceedings may be used to significantly reduce the time and expense required to obtain judgment. In less complicated cases, it may be possible to proceed by way of application instead of an action. In an application, the rights holder would need to file all of its evidence at the outset; there is no discovery, and witnesses are cross-examined on their affidavits outside of court. The process can be completed in under a year, and the process is considerably less resource-intensive than an action. In either case, the primary available remedies are the same—injunction and delivery-up or destruction of infringing goods, damages or an accounting of profits and legal costs, but may differ in their application depending on the nature of the intellectual property rights that are found to have been infringed.     

Parnian Soltanipanah

In addition to the ways in which Andy’s different features may be protected, use of Andy’s interactive features raises potential obligations on the business related to personal information (PI) that may be collected when clients use Andy’s transmitter features to connect to Smart & Biggar’s deadline list. For example, PI such as their name, phone number, email address, or IP address may be collected to authenticate and facilitate such access.

The Federal Personal Information Protection and Electronic Documents Act (PIPEDA) and substantially equivalent provincial legislation including Alberta’s Personal Information Protection Act (AB PIPA), British Columbia’s Personal Information Protection Act (BC PIPA), and Québec’s Act Respecting the Protection of Personal Information in the Private Sector (QC ARPPIPS), govern how private sector companies collect, use and disclose PI in the course of their commercial activities. Depending on where the PI is collected, the location of the collector, and whether the PI will be transferred nationally or internationally (including for storage), some or all of the above Acts may apply.

Canadian privacy laws are generally modelled after the 10 Fair Information Principles found in PIPEDA, which impose the following obligations on businesses. Businesses need to understand these obligations and set up policies and procedures to ensure these are met.

1. Accountability: a business is responsible for the information under its control and must appoint a Privacy Officer to oversee compliance.
2. Identifying purpose and reasonableness standard: the purposes for which personal information is collected must be identified before or at the time of collection and must be reasonable in the circumstances.
3. Consent: a business must obtain meaningful consent from an individual prior to the collection, use or disclosure of their personal information.
4. Limiting collection: a business must ensure that the collection of personal information is limited to what is required to fulfil the identified purposes.
5. Limiting use, disclosure, and retention: a business can only use or disclose personal information for the purposes for which it was initially collected, unless the individual consents otherwise. The PI must also only be retained for as long as necessary to fulfil those purposes.
6. Accuracy: personal information must be accurate, complete and up to date.
7. Safeguards: a business must protect personal information with appropriate safeguards that are proportionate to the sensitivity of the information. This may include administrative, technical or physical safeguards.
8. Openness: a business must openly disclose its policies and practices with respect to how it handles personal information. This is generally done via a Privacy Policy.
9. Individual access: upon request, an individual must be informed of the existence, use and disclosure of their personal information, be provided access to such information, and have the ability to correct it.
10. Challenging compliance: an individual must be able to challenge an organization's compliance with these principles, generally addressed to the Privacy Officer.