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Intellectual Property for Innovation

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Legal instruments available to smaller innovators and start-ups.

Adedeji Adeniregun

Masters in Technology Management

Memorial University, Newfoundland.

Abstract—This term paper looks at the legal instruments available to innovators and start-up businesses. The advantages and disadvantages of each intellectual property rights as well as the historic landmark cases that brought about these laws and enactments are also previewed. Many smaller firms and entrepreneurs have spent years and money to develop innovative products and services only to be cheated by imitators and larger competitors. This term paper dissects how these smaller firms can make use of these legal means to fend off imitation while still fully commercializing their products.

Keywords- patent, copyright, semi-conductor chip protection, trade secrets, trademarks, geographic indication, industrial design, intellectual property.



Legal instruments available to smaller innovators and start-ups.        1


Several studies both in Canada and the United States show that investment in intangible assets has far exceeded the rate of investment in traditional capital such as machinery, equipment and buildings in the past 30 years. As a result, the focus of many companies have shifted from predominantly tangible assets to intangible, knowledge-based assets which includes intellectual property (IP) rights - patent, copyright, semi-conductor chip protection, trade secrets, trademarks, geographic indication, industrial design, goodwill. This shift has increased awareness about the importance of IP rights and IP policy among policy-makers in most large enterprises. However, smaller companies are finding it difficult to adapt to this change, thereby exposing themselves to intellectual theft, imitations and undue competition (Squicciarini and Dermis, 2013).

According to the Arundel and Kabla (2013) on IP-intensive industries, large enterprises were more likely to use patents, copyrights or trademarks than smaller enterprises. More specifically, in 2010, 22.5% of the largest enterprises held or used patents compared with 2.5% of the smallest enterprises; 1.2% of the largest enterprises held or used trademarks compared with 11.2% of the smallest; and 24.8% of the largest enterprises held or used copyrights compared with 12.1% of the smallest.

The objective of the present paper is to study the use of IP rights by small businesses and entrepreneurs. To do so, the paper draws on different surveys and studies in selected countries, with an emphasis on Canadian small businesses. The paper finds that despite the potential benefits of acquiring formal IP rights to smaller businesses, these smaller firms use IP rights to a lesser degree than large companies due to several factors. This paper also establishes ways in which smaller businesses can protect themselves using these legal frameworks against imitators and relatively bigger companies. Finally, this paper draws a framework which small firms, innovators and the government can use to maximize and encourage the usage of Intellectual Property.

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Table 1: IP use by firms in 2006

The next section will briefly look at the definition and history of Intellectual Property laws especially in Canada, Section 3 will examine the benefits and barriers faced by smaller businesses in relation to IP and how they can use it to their advantage, Section 4 will examine some key statistics pertaining to smaller businesses use of IP and how the government can play a role to help these businesses. The paper is then concluded in the last section.


 Intellectual Property (IP) is defined by the Canadian Intellectual Property Office (CIPO) as the legal rights that result from intellectual activity in the industrial, scientific, literary and artistic fields. The world governing body on Intellectual property, WIPO, defines it as creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce (WIPO, 2004). Intellectual property law was made to protect innovators and other artists and producers by granting them certain time-limited rights to control the use of those productions. Intellectual property is traditionally divided into two branches - industrial property and copyright.  

The Convention that formed the World Intellectual Property Organization (WIPO) concluded in Stockholm on July 14, 1967 and it provides that intellectual property shall include rights relating to the table below

Rights under IP Law

IP Law Legislation in Canada

Literary, artistic and scientific works

Copyright Act

Industrial designs,

Industrial Design Act

Performances of performing artists, phonograms and broadcasts,

Copyright Act

Scientific discoveries,

Patent Act

unfair competition, and all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields

CIPO guidelines

Inventions in all fields of human endeavor,

CIPO guidelines

Integrated Circuit Topographies are

innovative three-dimensional circuit designs

Integrated Circuit Topography Act

Table 2: IP rights, and laws already passed in Canada

The expression “industrial property” covers inventions and industrial designs. Inventions are new solutions to technical problems and industrial designs are aesthetic creations determining the appearance of industrial products (Teece, 1986). The several forms of Intellectual Property including patents, trademark, copyright, semiconductor chip are now examined more closely in the following section.



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