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Intellectual property: How to protect your investments

4-minute read

At first glance you might think eavestrough manufacturer Alu-Rex is operating in an old economy business. From ground level, the layman could be forgiven for thinking that all gutters and gutter accessories are pretty much the same.

Not so. Alu-Rex's products are unique and that makes the company vulnerable to imitators, especially given the high visibility of its gutter leaf-guard system and fastening products. They are exported throughout North America and Europe.

"When our new products come out they are all patented," says Luc Masson, General Manager at Alu-Rex in Charny, Quebec. "We are constantly working to improve our offerings. But we have to be careful. In our industry, if someone develops a new or innovative concept, it will immediately be copied."

Not just for technology companies

According to intellectual property expert Neil Milton, Alu-Rex is right to be cautious about protecting its products. Unfortunately, not all businesses are as careful.

"There is a perception that only technology companies need to worry about these issues," says Milton, an Ottawa lawyer and author of Canadian Intellectual Property Law for Dummies. "Businesses today are increasingly knowledge based and much of that knowledge has value. If they don't protect it, they could end up investing hundreds of thousands, if not millions of dollars, and end up watching someone else reap the benefits."

It's crucial to adopt a coherent approach to what Milton calls "intangible creations of the mind."

The first step is to identify where the key challenges and opportunities lie for a business. These can be best lumped into four broad groups: Patents, trademarks, copyrights and industrial designs.

"Unless you want your company to always be involved in a race to the bottom—competing to sell at the lowest price—you have to protect all of these assets," Milton says.

More attention needed

Intellectual property issues often do not get the attention they deserve, particularly from small and medium-sized businesses.

Part of the reason is that investments in intellectual-property protection don't generate the immediate bottom-line contribution that entrepreneurs are often looking for, says Phillip Bertin, President of Stratégies Trois-Quatorze, a Laval, Quebec firm that specializes in advising small and medium-sized businesses on intellectual property and technology transfer issues.

"If you are developing new products, the last thing you want is for the news to get out," Bertin says. "As a result, businesses often keep their progress under wraps. But by keeping quiet, they often also avoid discussions about how to protect those investments."

Beware of the IP rights of others

Another problem, says Bertin, is that many businesses find out about intellectual property law the hard way—by inadvertently violating someone else's rights—a potentially costly oversight and one that no one wants to talk about publicly.

"Often clients tell me their stories in two parts," Bertin says. "First, they explain that they may have infringed on a competitor's intellectual-property rights. Then they insist that I keep quiet about it."

In fact, Bertin signs non-disclosure agreements for almost all clients that he works with.

The first step entrepreneurs need to take, says Alu-Rex's Masson, is to be aware that intellectual property issues exist and work out a game plan to manage them.

Then persistence is the key to making the plan work.

Persistence pays off

"We discovered that a company in China had posted some of our images on their site," Masson says. "We could have let it go. But we did not want to take a chance. So we sent them a lawyer's letter."

"They didn't take the pictures down right away. But after one or two more letters, they finally responded."

Incorporating intellectual property protection into your business plan can play an important role in enabling your company to achieve and maintain a competitive advantage.