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44 www.canadianlawyermag.com LEGAL REPORT MOST ENTREPRENEURS and small and medium business owners understand that their intellectual property — those intangible assets such as ideas, content, brands, reputa- tion, designs, confidential information — is valuable. However, businesses often don't realize how important it is to protect this IP through securing rights to ensure the smooth running of their business. "Almost every small business undervalues its intangible assets," says Brigide Mattar, partner and patent agent at Smart & Biggar in Montreal. While they understand that what they have or do is unique, "often, they only worry about IP when something goes wrong." Typically, "and this is the sad part," Mattar says, "you'll have a company that is small and not hitting the radar yet — and then they start commercializing and getting bigger." INTELLECTUAL PROPERTY Building brand business through smart IP Intellectual property lawyers say small and medium- size enterprises should focus on IP from the start, writes Zena Olijnyk Once that happens, the more prominent, established players who have IP assets start to get bothered by the upstart, and some, especially those in the U.S., "tend to be a lot more aggressive." And that's when the small or medium business or entrepreneur gets the "cease and desist" letter, and they now "have to react rather than having been proactive on their IP in the first place." It often takes this kind of wake-up call for SMEs to realize that they should have started on the road to protecting their IP a lot earlier in their business devel- opment, Mattar says. A significant portion of the business value of early-stage companies relates to IP and intangibles, she says, adding that "when properly used, IP rights can unlock value from these intangibles." It's not necessarily a case of having to do everything at once, Mattar says. Yet IP can help drive revenues and support the business with a strategy that includes IP rights protec- tion, whether it is trademark, patents, copy- right or trade secrets. Having a solid IP strategy in place can also become very important when looking for financing or selling the company, Mattar says, because one of the first things a savvy investor or buyer is looking for risk, including IP risk. Trent Horne, a partner with Aird & Berlis LLP, adds that pretty much all SMEs "own intellectual property whether they know it or not." However, the challenge is that "not all business owners have a clear understanding of what IP is, or even know what they own." He points out that something as simple as confidential information such as customer lists, pricing plans and strategies are as much IP as trademarks, logos and the design or look of a product. As for information such as trade secrets, Horne says protecting IP is often devising an employment contract that adequately protects secret business information, which could give competitors an edge if an employee were to leave one place to work at another. Company protocols and employee education are essen- tial to protect these trade secrets. "Businesses are well served by having good employment agreements that reinforce obligations of confidentiality and minimize unauthorized disclosure. At Oyen Wiggs in Vancouver, Jayde Wood says that business owners generally under- stand that they need to protect a trademark or brand or design or get a patent for their technology. But they often feel that whatever money they have on hand is better used in running and growing the business. "It's an 'I'll get around to it attitude,' and they don't realize how much of what they have and do relies on their branding, or design, or technology." Wood, who specializes in industrial "Almost every small business undervalues its intangible assets. Often, they only worry about IP when something goes wrong," Brigide Mattar, Smart & Biggar