kirstie McLellan Day kirstie McLellan Day - The MOMpreneur

legal issues
Looking at Legalities
Licenses, patents, trademarks…
and other legal issues entrepreneurs face
By Cindy Stephen
You’ve got a great product and a fantastic new idea.
However, there’s a lot of red tape to unravel while
rolling out your new business. You may even feel so
strangled by complicated paperwork or confusing
rules that you can’t move forward. If you anticipate
the formalities and educate yourself in advance of the
inevitable legal matters, the red tape won’t seem so
sticky.
There are three basic elements when it comes to the legalities
of either launching a new business or jumping to the
next level. We’ve checked with experts across the country
to give you the heads up; however, it’s always wise to seek
counsel yourself.
Licenses: open for business
Most businesses need a license to operate legally within the
local municipality. Some businesses, such as pharmaceutical
companies or broadcast outlets, need a federal permit as
well. Be prepared to do some research to determine what,
precisely, is required.
Industry Canada has developed an online tool, available in
most provinces and territories in the country, to help small
business owners find the appropriate requirements for each
level of government in their area.
BizPal generates a personalized list of the documents you
need to complete. A question and answer “wizard” will walk
you through the steps, saving you invaluable time on research
and navigation through the dizzying levels of government.
The City of Hamilton, Ont. implemented BizPal in 2009 to
improve service for small business entrepreneurs.
“It’s quite user friendly. It takes about 15 minutes to answer
the questions and then it will spit out what types of permits
you might need based on your answers,” says City of
Hamilton Communications Officer Debbie Spence. She says
BizPal will help business owners with other permits issues
such as zoning verification, fire and public health permits
and home-occupied business requirements.
Most municipalities have websites with information on how
to obtain business licenses. Otherwise, information can be
found in the blue pages of your local phone directory.
Protect and preserve
If you have invented a never-before seen product or formula,
you might already be in line at the patent office.
“A patent is a time limited, monopoly right,” says intellectual
property lawyer Jennifer Marles of Vancouver. “You get an
exclusive right to make and sell your invention for 20 years
from the date you file your application. At the end of that time
period, the public is free to make and use your invention.”
If you’re still thinking about whether to go down that
road, it is imperative that you don’t show your fabulous
new invention to the world. A patent is granted for a new,
never-before-seen product that is also useful and inventive.
However, once offered for sale or disclosed publicly, it is no
longer considered to be new.
The benefit of taking out a patent is that others can’t steal
your idea or copy your invention – at least, not easily. The
drawback is that preparing and filing a patent application
with the Canadian federal government, with professional
assistance, costs at least $10,000 to $15,000 and success is
not guaranteed. If the government has some objections to
your application, you may incur more costs. Marles says new
entrepreneurs should be very confident that their product is
new, inventive and useful – not just an obvious modification
of something already on the market – and that it will sell like
hotcakes.
“You’ve got a very large upfront investment that you may not
recoup,” she advises. “Weigh your options, but do it before
public disclosure.”
An alternative to a patent
may be an industrial design
registration. This would
protect the visual features
of a product such as the
shape of a flower vase or the
treads of a tire. Registering
an original design protects
the visual features but not
the mechanism or the way it
Jennifer Marles, intellectual
property lawyer and trademark
and patent agent
34 MOMpreneur ® � July/August 2010
photo courtesy of Oyen Wiggs Green & Mutala LLP