In today’s digital landscape, every company is a technology company, no matter what product or service it offers. Companies that learn to integrate, develop and protect technology have a significant competitive advantage and tend to lead the market. Canada and the United States (US) share one of the world’s largest trading relationships, with more than CA$3.6 billion in goods and services exchanged between the countries each day.¹ As an early-stage company, it is important to consider the potential expansion of your business into the US market early. A key consideration in this cross-border expansion will be protecting and securing the intellectual property (IP) developed by your business, as IP is (or will be) one of your business’ most valuable assets.

All Canadian companies with strategic IP should conduct searches of US and Canadian IP repositories, to check whether its IP conflicts with or infringes on any third party’s existing rights in both jurisdictions. At a minimum, these steps should be taken before settling on a business name, logo and branding. Failing to take these simple steps can result in having to adjust the business strategy, growth plan and total addressable market in addition to having to rebrand in order to expand your business into the US.

A Canadian patent, trademark or industrial design will not secure your rights outside of Canada. As a result, expansion into the US will require you to recognize, register and enforce your IP rights in the US The good news is that IP protection and registration processes in the US are similar to those in Canada. However there are some crucial differences to be mindful of, which are highlighted below.

Trademarks

The US, like Canada, follows a “first-to-use” system for trademark rights. This means that whoever used the trademark first in the US, registered or not, will own the rights to it. You should still consider registering your trademark federally with United States Patent and Trademark Office (USPTO) or at the level of the individual states, as registered trademarks are easier to enforce and have a number of other significant advantages over trademarks that are not registered. If you are using your trademark in interstate trade and/or between the US and a foreign country (e.g., Canada) it is strongly suggested that you register your trademark with USPTO rather than on a state-by-state basis.

When you file a trademark application with USPTO you must submit proof of use for each class of goods and services associated with the trademark or if you have not started using the trademark yet, you can file an application based on intent-to-use. After the trademark application is examined, advertised and allowed by USPTO, you will still need to submit a statement of use (including proof of use) for each class identified, as USPTO will not register the trademark before the statement of use is filed. If you are not consistently using your trademark in the US it may be challenged for non-use. This is a key deviation from Canadian trademark legislation, where there is currently no requirement to show use of a trademark filed or applied for in Canada.

Patents

The US has a “first-inventor-to-file” system which provides patent protection to the first person to file an application on an invention. If an inventor publicly discloses his/her invention, there is a one-year grace period to apply for a patent on that invention. Under US law, a sale or offer for sale of the invention within the US may trigger the start of the one-year grace period in the US However, under Canadian law, there is no absolute on-sale bar. Rather, there needs to be public disclosure of the invention in order to trigger the start of the one-year grace period in Canada, without regard to which country the public disclosure was made or the form of the public disclosure (written, oral, use, etc.). This differs from the US, where public uses and public sales of the invention outside the US will not trigger the start of the one-year grace period in the US

It is important to note that an invention patented over a year ago in another jurisdiction, such as Canada for example, will not be patentable in the US as the invention will not be considered novel. As a consequence, timing is a key issue with any new patent application for companies seeking to conduct business internationally.

The US also offers “provisional patent applications,” which do not exist in Canada. A provisional patent affords the inventor 12 months to improve their technology and add any supporting data, then after that 12-month period the inventor will need to convert their provisional application into a regular patent application. A provisional patent is a cost-effective way to begin protecting your work, without the requirement of filing a formal patent application for examination with all of the associated mandatory disclosure. Anyone applying for a patent in the US and Canada should be aware that the patent categories between countries do vary.

Copyright

As in Canada, the registration of copyright is not required in the US However, a copyright registration is needed in order to initiate a lawsuit for infringement in the US, whereas in Canada, you can sue a third party who infringes your copyright and claim statutory damages even if the copyright is not registered.

In addition, the US has a concept of “work for hire” which does not exist in Canada. Usually, a copyright is attributed to the author for the author’s life plus 70 years, however, with “work for hire” the copyright is transferred to the employer. The term of protection then becomes 95 years from the date of publication or 120 years from the date of creation, whichever expires first. Commissioned work done by an independent contractor, rather than an employee must satisfy Section 101(b) of the Copyright Act of 1976 and include a written agreement between both parties clearly stating that it is subject to a work for hire arrangement. It should also be noted that if an employee does work which is outside the scope of the employee’s regular work, such work would not be considered “work for hire” and the IP rights related to such work would remain vested with such employee.

Trade secrets

It is critical that your business is intentional about maintaining confidentiality in IP in order to maintain as many options as possible to protect your IP and to ensure protection of trade secrets. Maintenance of this confidentiality may be even more important in Canada, as trade secrets are not protected under statute. Clauses dealing with confidentiality, IP assignment and waivers of proprietary or moral rights should be thoroughly reviewed and revised as necessary when entering into agreements with employees and independent contractors, to ensure that any jurisdictional specific provisions have been properly applied, in order to protect your business’ IP assets.

For more information on these topics, please join Nick Janda and Kristal Allen at Vancouver Startup Week for their panel presentation: US Intellectual Property Considerations for Canadian Ventures (event details below)

VSW2024 Schedule

Attendee Registration

Friday, May 31, 2024

Time: 2:30 – 4 P.M. PST

Description: Join SFU Venture Labs and Dentons’ cross-border team to hear about the differences between Canadian and US intellectual property laws and how early-stage Canadian companies can navigate the gap.

Location: SFU Venture Labs - 555 W Hastings St. Suite #1200, Vancouver, BC V6B 4N6

Serving: Light snacks and beverages

 Participants:

• Nick Janda, Counsel, Dentons US – Nick advises clients ranging from early-stage startups to large-scale international corporations, including working with everyone from friends-and-family round entrepreneurs to some of the largest global brands in the world.
• Kristal Allen, Partner, Dentons Canada – Kristal’s practice centers on corporate and commercial law with a focus on the intersection of technology, intellectual property and data protection, especially in innovative industries such as food, agriculture, healthcare, energy and financial services. 

Moderator: Lesley Esford, Executive Director at SFU Venture Labs – Lesley Esford is an experienced Life Sciences professional with a diverse background related to company innovation, commercialization, securing finance and scientific research and development. Through her work in both the public and private sectors, she has an extensive professional network and a comprehensive understanding of the Canadian innovation path as well as the global investment community.

Opening remarks: Danika Kotylak, Associate, Dentons Canada – Danika advises clients in a broad range of corporate and commercial matters, including corporate organization, financing and bespoke commercial agreements. In her intellectual property practice, Danika advises clients from sophisticated corporate entities to independent artists on intellectual property protection and commercialization options.

[1] “Canada-United States relations” (8 May 2024), online: < https://www.international.gc.ca/country-pays/us-eu/relations.aspx?lang=eng>.