Demystifying Intellectual Property: IP as a Tool for Protection and Growth

— The Journey of Patent Lawyer Isi Caulder



Many entrepreneurs feel intimidated to file intellectual property rights. In addition to the expenses that come with an IP strategy, most founders are clueless about where and how to start. However, taking this step to protect your company is crucial. Not only can it save you from huge losses down the road, but it can also bring in various growth opportunities.



In today’s episode, patent lawyer Isi Caulder joins us for an insightful chat. We learn about her background and how this contributed to a career in IP rights. Isi also discusses the different types of IP, how they work, why they are important, and practical steps when applying for them. Finally, she shares the value of an IP strategy for business growth, and how you can partner with a patent lawyer to develop one today.


If you want to understand intellectual property and capitalize them to your advantage, then this episode is for you!


Here are three reasons why you should listen to the full episode:

  1. Learn about the types of intellectual property and their differences.

  2. Discover the importance of IP and partnering with an IP and patent lawyer to empower your company.

  3. Understand how IP can be used as an asset that can open up more opportunities for financing your business.

Resources:

Episode Highlights


[05:58] How Isi Became a Patent Lawyer

  • Isi has been interested in fixing and building gizmos ever since she was a child.

  • She got interested in law and policy as she worked as an engineer.

  • So, she decided to take up law to take on a new way of seeing the world.

  • However, she missed engineering. Isi ended up as a patent lawyer because she didn’t want to leave technology behind.

  • Being a patent lawyer, she finds fulfillment working with tech startups. Isi helps them develop their businesses and protect their IPs.


[07:07] What is Intellectual Property?

  • IPs have different categories, all of which are applicable in various aspects of a business.

  • Patents protect the fundamental functionality of a product or invention.


“That's the power of patents. You can stop competitors from doing the exact same thing, from following those steps and having that functionality.”


  • It can be rather complicated, considering the laws differ in every country.


[08:23] Other Types of IP

  • Trademarks are about the company name and brand. They’re also the subtleties behind how customers perceive that specific brand.

  • Copyright is primarily for media outputs such as art, music, or film.

  • Trade secrets are information that cannot be divulged, or else legal recourse will be directed to the violators.

  • Industrial design is about the look of a specific product, from the make to the ornamentation.


[10:48] How to Identify Your IP

  • For companies, you need to ask yourself three important questions.

  • “What does my company do best?”

  • "Why would customers choose my company over the competition?"

  • “How do I distinguish my company from competitors?”

  • Asking these questions allows you to figure out the assets your company might have.


[12:12] Advice Around IP

  • IP is an asset that you can buy and sell, license, or use as security for a loan.

  • A lot of people don’t necessarily know what specific IP they have.

  • Inventors are often too hard on themselves regarding this matter. They think their innovations aren’t particularly new or non-obvious, crucial tests for patentability.

  • However, your product does not necessarily have to be a huge eureka moment. It only has to be different.


[13:24] Crafting an IP Strategy

  • Companies should be more aware that many aspects of their business are protectable.

  • All businesses need to have a trademark, especially since investors require this protection.


“Trademarks is something that I think is applicable to pretty well, all businesses. It can be used as a security for a loan. It’s going to be something investors are going to ask.”


  • You can also take steps to mark your customer lists and business processes as trade secrets.

  • Having an IP strategy allows the company to think long-term and improve finance, which investors and business partners also appreciate.


[15:15] Next Steps to Filing an IP

  • Most business owners are afraid to talk to an IP or patent lawyer because they don’t want to be charged.

  • But most of the time, they won’t be billed until there’s something to be done.

  • Connect with an IP or patent lawyer through accelerators. Remember, there are time limits on patents and industrial design.

  • In other countries, once your idea is already in the public domain, you can no longer get valid patent rights.

  • Copyright and trademarks can usually wait. However, patents and industrial design have a time limit.


“IP can be there to help you mitigate and prevent you from getting into a scrap with a competitor, or losing market share or losing patent rights.”


[19:30] Why IP is Crucial for Your Business

  • Service companies also need a patent, not just product-based tech companies.

  • In particular, SMEs with formal IP are 1.6 more likely to experience growth.

  • They are also two times more likely to innovate and three times more likely to expand domestically and internationally.

  • So, business owners need to overcome their fear and consult with an IP or patent lawyer to get useful information.


[21:35] Funding Opportunities

  • There are many avenues you can explore to get funding for your company’s R&D and IP.

  • There are also government programs such as CanExport and Concierge Service that assist SMEs to improve finance.


“We're very lucky to be here because our government is supporting a lot of these efforts, and innovation is definitely at the heart of what they're trying to incentivize.”


[23:55] How to Use IP for Financing

  • Keep your IP ready for investment.

  • Have an inventory of all the IPs you own or license, as well as the registration status for each.

  • Also, secure ownership with the authors and inventors of the specific IP.

  • Investors need to see that you’ve done due diligence when it comes to the IP landscape. This can be through searches or planning.

  • It also pays to have an IP plan detailing which industries and countries you plan to expand into.


[26:56] Why Employment Agreements Matter

  • It’s essential to have all agreements in place with the people associated with the company.

  • Generally, companies have an agreement in place stating that anything an employee invents is assigned to the company.

  • Usually, the patent office requires a separate confirmatory assignment.


[29:03] Cost-Benefit Analysis for IP

  • Part of an IP strategy that a patent lawyer develops is determining which IP is worth investing in.


"The IP plan is so important and an IP lawyer should be helping a company understand: What exactly is the right approach?"


  • Think about your assets’ market potential and decide whether or not the upfront cost for the application is worth it.

  • You don’t have to protect everything in every location. You can be strategic about where you’d like to focus your IP protection.


[33:17] Financing Using Trade Secrets

  • Patents start as trade secrets.

  • Unfortunately, you can’t register security interest against a trade secret.

  • You can start with industrial design protection first, which is less expensive than a patent.

  • Nonetheless, keep in mind that there is an urgency when it comes to filing patents.


[34:24] Parting Advice

  • Focus on answering the three questions around knowing what distinguishes your company from others.

  • Take a look at the buckets of IP and find out which one applies to you the most.


Powerful Quotes


“An IP is an asset. I mean, at the end of the day, it is something you can buy and sell. It's something you can license, it's something that you can use as a security for a loan.”

“It doesn't have to be a huge eureka moment; it just has to be different.”


“Knowing that you can have an IP strategy is very powerful and starting to think longer term in terms of, ‘What do we own? What have we created? And let's protect some of this.’”


“The sooner the better, especially when it comes to patents and industrial design because there is a time limit on those.”


“Don't publicly disclose your technology before you talk to somebody about patents or industrial design. Because once it's in the public domain, in a lot of countries you can't get valid patent rights.”


“You don't want to protect everything and you don't want to protect everything in every country. You can be strategic about it.”


About Isi


Isi Caulder is a patent lawyer and an engineering graduate. She is a partner at Bereskin & Parr LLP and a member of the Electrical & Computer Technology practice group. She is also the co-leader of the Artificial Intelligence (AI) practice group and the leader of the Cleantech practice group.


Isi guides technology companies through the process of strategically developing, managing, and monetizing their IP rights. She is also a frequent author of articles on patents, industrial designs and IP law. In addition, Isi is a regular speaker and coordinator at local and international conferences, seminars, and technology-related events.


You may contact Isi Caulder through her LinkedIn and Twitter accounts. You may also reach her through her email at Bereskin & Parr.


Enjoy this Podcast?


Intellectual property does not only protect your products from competitors. It also provides opportunities for you to improve finance and achieve growth in your business. Isi shares how IP empowers companies and how we can craft a good IP strategy. If you enjoyed today's episode of Her CEO Journey Podcast, then hit subscribe and share it!


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Have any questions about business finance? You can contact me through LinkedIn or schedule a chat with me at any time. You can also suggest topics you're curious about for future episodes to help your business grow. Thanks for listening!


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To fuelling the life you want to live,


Christina


Transcript


Isi Caulder: It's something you can license, it's something that you can use as a security for a loan. So a trademark registration, patent registration, industrial design registration, we often go to the registers and file security interests against those registrations or applications. Then we release them, of course when they're released, but it's a very important asset to think about. As you say, like a lot of people don't necessarily know what they have.


Christina Sjahli: No matter the industry, a company's stage of development, or a company's internal size and structure, one thing you will learn in this new podcast series is that intellectual property matters. From my corporate experience, intellectual property, or what is commonly called IP, it is an important asset for many public company and is often utilized as a financing strategy.


However, I haven't heard much talk about using IP as a financing strategy in the small business world. The sooner founders realize that intellectual property matters, the better it is for their business. That's why I'm curating this intellectual property podcast series. So you, as the founder and CEO, can harness the value and power of IP. As we move along from one episode to another in this series, you will learn a few things: the different types of IP that may exist in your business, and how can you protect this IP, the role of IP in capital raising going global and exit strategy, ways to finance your business using IP and what does the process look like. As well as the insider experience of female founder and CEO in developing and financing their company's growth using IP.


By the end of this series, you can start figuring out what IP you have, how you can create your IP strategy, and maybe consider using IP as your capital raising strategy. Today's episode is the first episode of this Intellectual Property Podcast Series. And Isi Caulder is a partner at Bereskin & Parr LLP. Her firm is considered a highly regarded IP boutique firm located in Toronto, Canada. She is the guest for today's episode.


In this episode, Isi shares her in-depth knowledge of intellectual property, specifically patents. She also shares the differences between patents, trade secret, industrial design, and trademark, the process to register this IPs, why it's important for founders to think about IP strategy from the beginning, and how to get started with your IP strategy. If you are not located in Canada, this episode is still valuable to you, because you can approach the local IP expert or lawyer and ask the right questions.


You're listening to Her CEO Journey, the business finance podcast for mission-driven women entrepreneurs. I'm your host, Christina Sjahli. If you are new here, a big warm welcome. If we are not connected on LinkedIn, please reach out and say hi, because that's where I hang out and share my business finance tips. If you have been listening to this podcast for a while, and you are a regular listener, I want you to know I appreciate you. My podcast won't be around without your support. This is a free weekly show where my guests and I want to inspires you to balance between mission and profit, to create an impact in this world, and to achieve financial equality through your business for good.


When you start thinking about creating an IP strategy, it means that you need to start thinking about where you want to go with your business. When this happens when a founder starts to shift her mindset from short term to long term, what can happen next is this: The founders start to realize how important it is to have a forward looking view, it is no longer sufficient to look at the financial result that already happened and done. We cannot change the past. But we can learn from the past. Learn from what had happened and done, and use those pieces of information to build the future. That's what financial forecasting is all about.


If you are at a stage where you think, "Hey, I need a better and more robust financial forecast," but you don't know where to start, we have a solution to your problem. Download the forecasting guide we have created for you and start creating a better and improved financial forecast. You can find the link to this guide in the show notes. Let's say after using the guide you think, "Hmmm, this guide helps me but I think it's better if I follow focus my time on doing what I really love, which is building and growing my business. I know business finance is important, but I don't love it." That's when we are here to partner with you. We understand building a proper and robust financial forecast takes time, accountability, curiosity, and passion for your business. So let's connect with us at christinasjahli.com/lets-chat. Now, let's find out Isi's CEO journey.


Isi Caulder, welcome to Her CEO Journey. It is a pleasure to have you here.


Isi Caulder: Oh, it's wonderful to be here. Thank you for asking me.


Christina Sjahli: Before we dive into all the details about intellectual property, let's start with your journey. Because I think you have an interesting journey, you studied engineering, and then you becoming a lawyer, and you're specializing in patents. So why don't we start there?


Isi Caulder: When I was a kid, I had a drawer in my bedroom, it was like a big drawer. It basically had all sorts of gizmos that I had broken, all kinds of things like clocks and radios and different things that I had broken and taken apart. I remember I have a vivid memory of that drawer. So I was just meant to go into engineering and work in that area. And then when I was working as an engineer, I started to get very interested in law and policy. I just realized, you know, there's another part of myself that isn't here. I'm kind of working as an engineer, and that's great. But it's not my whole self.


So I then went into law school. I decided to go into law just to, sort of, take on a new way of seeing the world: learn about contracts, and learn about relationships, and legal relationships and obligations, and all the systems that are there that are legal, which are pretty fascinating. But then I realized I missed engineering. So that's why I ended up in patent law, because I didn't want to leave the technology behind. I love working with startups and companies that are developing technology. But I get to learn about all these different areas, and help them protect their IP.


Christina Sjahli: Let's explain to my audience, what is intellectual property?


Isi Caulder: I like to just sort of demystify IP and empower people around IP by just saying, "Look there are these buckets of IP. They're all pretty interesting. They all apply in different ways to your business." So the first one, of course, you know, I really love patents, that's my core area, because that is when you're protecting the functionality of something. So how do we protect that fundamental technology, that fundamental part of it, that you would like to prevent someone else from doing? And that's the power of patents. You can stop competitors from doing the exact same thing, from following those steps and having that functionality.


I'm the co-head of the AI group at my firm. So I work with a lot of mostly Toronto-based AI companies. So I think a lot of the complexity can come out of the subject matter that is at heart of the protection. But in terms of the legal side, patents can also be very complicated because they have different rules in different countries. So there's US patent law, there's Canadian patent law, there's European patent law. And while they have the same fundamental basics to them: something needs to be new and non-obvious for it to be patentable, they have, sort of, the basic requirements also utility and subject matter. But each country will have its own particular rules and case law around what qualifies to be patentable, for example, or what qualifies as patent infringement.


There are other things like branding, which is trademarks. Say you're Xerox or you're Coca-Cola, you have a brand on your product; you have a company name. It's pretty straightforward. Nobody should be able to get too close to that. There's a lot of subtlety in terms of how you determine whether somebody is using a trademark that's too close to yours. Are they causing consumer confusion? All the tests around how confused is the consumer in terms of the source of the products or services. That's at the core of trademarks? Essentially, where did this box of salt come from? Where did the box of salt come from? Who produced this salt, and what quality might it be given that I know the source of the box of salt. So I would say trademarks definitely comes up along as well in terms of the tests that are required and the evidence that's required to substantiate consumer confusion and trademark infringement.


There are other things like copyright. So if you have a painting or you have a film, you can say, "Hey, you're copying my art. You're copying my film. That is unauthorized copyright infringement." Then there are things like trade secrets that you can create by just keeping something secret. You can have a trade secret that can be lost, and you can have some legal recourse to the person who breaks the trade secret.


Then there's, finally there's industrial design, which is really about the look of something. So if you have a car, or you have a chair, or you have a watch, there's an ornamentation to that product that you can protect as an industrial design. I don't wanna say the poor cousin of patents, but it is related to patents. They usually call in the US, they call what we call patents, utility patents. So the functionality of something. But then there's also a design patent. We call them industrial designs here in Canada, but industrial designs really are about, again, the ornamentation the look of something.


When you're filing a design application, design patent application, you're filing figures, so you're filing the six different views, maybe a perspective view of the object to show it from different perspectives, and get an idea of if somebody was going to infringe this, they would make a tire essentially, or a chair that has the same angles between these different elements, and looks looks like this from these different angles. So industrial design, there obviously is case law. There are rules and statutes and all of that behind it. But they don't tend to be as complicated as you see with patents or with trademarks.


Christina Sjahli: For business owners out there. How can they identify? What are the steps for business owner to identify the type of IP they have in their business?


Isi Caulder: So the question is, what is it your company do best? What is really your area of speciality? Why would your customers choose your company instead of the competition? What is your delta in the marketplace? Then how do you distinguish your company from competitors? If you ask those three questions, typically, things will fall out of those questions that will let you know, lead you to realize, "Oh, our difference really is the technology that we're using. We're using software, or we're using something, we're selling something mechanical that is really, really interesting, that solves a problem in a way that that hasn't been solved before."


Or "They would distinguish our company because of our name. We have this fantastic name." "We have this wonderful logo." Or "We're very focused on our branding." That's going to be really important for your business. The same with industrial design, like "Maybe somebody would choose our product because it looks so good." Then out of that discussion would fall well, industrial design is probably the thing, because there's an appearance, there's a there's a look to it that's so attractive, people just pull it off the shelf, because they want to have that in their home. So I think those questions are pretty powerful, actually way to we've started to understand where you can fit into these buckets of IP.


Christina Sjahli: What are the common misconception about IP that lead a business owner not realizing they actually have IP, and then they can use it to basically monetize this? It's an asset, technically on the balance sheet, and then they can use this for financing purpose.


Isi Caulder: An IP is an asset. I mean, at the end of the day, it is something you can buy and sell. It's something you can license, it's something that you can use as a security for a loan. So a trademark registration, a patent registration, industrial design registration, we often go to the registers and file security interests against those registrations or applications. Then we release them, of course, when they're released. But it's a very important asset to think about. As you say, like a lot of people don't necessarily know what they have.


A lot of people, especially inventors, who are inventing things, there'll be very, very hard on themselves, because they're smart, and they're coming up with new things. But they don't think it's particularly new. It's like they don't think it's particularly non-obvious. These are sort of the tests for patentability, but you have to have them take a look a little harder. "Look, you have a difference in the marketplace, you have something unique that people are coming to you for, take a look at it and see, you probably have done something new, you probably have done something that's non-obvious. It doesn't have to be a huge eureka moment; it just has to be different." So as I always say it has to be new, and it has to be different. Let's take a closer look at the difference.


Christina Sjahli: So are you saying that the common misconception out there is just education, meaning that people don't understand that IP is asset?


Isi Caulder: Right. Part of it is just awareness. Then also empowerment to sort of say, look, it is not rocket science. There are these different buckets of IP, and they cover different aspects of a business. Most businesses will have a house name, they'll have a company name, a lot of them will have product names. Those are all brands; those are all protectable. They identify you as the source. It is really worth keeping, making sure yes, you have the domain names, you may register the domain names. You may be looking, doing the nuanced search, making sure you can get the corporate name, that's great. But take the next step and start thinking about trademark protection. So that you have a registration to fall back on in Canada, maybe the US if you're if you're looking at that as a marketplace, most Canadian companies are.


Trademarks is something that I think is applicable to pretty well, all businesses. It can be used as a security for a loan. It's going to be something investors are going to ask. It's like, "Well, have you protected your name? Have you protected your company name? What if somebody comes into the country with the same name, your consumers would be confused. Have you taken steps to protect that?"


Then of course, there's the you know, industrial design, designs, also customer lists, things like that, that you know, NDAs can be used to protect confidential information for a company. Customer lists can be extremely valuable. All sorts of business know-how, all sorts of business processes that you might be using. You could take some steps to protect them as a trade secret and have that as part of your IP strategy. I think just knowing that you can have an IP strategy is very powerful and starting to think longer term in terms of, "What do we own? What have we created? And let's protect some of this." Investors and partners will be very appreciative that you've taken those steps and taken that time to reflect on on your IP.


Christina Sjahli: So going back to the first thing that you said, ask the three questions that you share earlier. Then the second thing realizing that you actually may have an IP. So once these business owners start thinking, "Okay, I may have an IP here." What would be the next step?


Isi Caulder: I think, which is very important for business owners to understand is how do you mitigate your risks, your business risks with IP. Because IP can be there to, kind of, help you mitigate and prevent you from getting into a scrap with a competitor, or losing market share, or losing patent rights, which you may have. Most IP professionals are like me. I never charge for initial consultations, and I'll have 2, 3, 4 calls with somebody and not charge them unless we actually come up with a mandate, something that they need done. So a lot of people are like me, I would imagine. Don't feel, and I think this is a big message, I've heard this actually in different forums, different business owner forums around IP, they're afraid to call a lawyer. They're afraid to pick up the phone because they don't want to be charged.


I would say to that, there are a lot of lawyers like myself working at firms, typically, through accelerators, if you can go to a local accelerator, and get access to an IP lawyer through an accelerator, you can have the assurance that everybody knows why they're there. They're there to help startups. They're there to help companies. They're not going to be charging you. That's not why they're there. They're there to mentor; they're there to develop relationships. That would be a very good place to go and get connected with an IP lawyer and ask these questions. The sooner the better, especially when it comes to patents and industrial design, because there is a time limit on those.


Christina Sjahli: Okay. So when you say time limit, what does that mean? Because you repeated that twice now.


Isi Caulder: I know, that's the big warning we always have, which is: Don't publicly disclose your technology before you talk to somebody about patents or industrial design. Because once it's in the public domain, in a lot of countries you can't get valid patent rights. Like even if you did get a patent, it could be invalidated very easily by just saying, "Well, this person had it at a trade show." When it comes to copyright, copyright automatically, sort of, attaches to the work. So there's nothing much you need to do other than provide proper copyright notice. But there isn't anything you need to really do. You can register if you want to. But there's no real time limit on that. It just happens under under the Berne Convention, it just happens.

Trademarks, again, they're sort of as I mentioned, they're sort of just common law rights that happen just from using it. You can register, it's good to get it registered in a timely way. But on the patent industrial side things, once cat is out of the bag, you may try to rely on some grace periods that exist, but once those are used up, then you can't get patent protection for something that's been publicly disclosed. That's, sort of, at the most urgent end of inquiry, I would say.


Christina Sjahli: But some people because like you said, they may not realize they have something that they need to patent it, right? Like they don't realize that they have to start the process. So they may already say something in public.


Isi Caulder: Yes, exactly. For sure. That happens all the time. Then we say okay, grace period save the day. Sometimes the grace period saves the day. You have another year in Canada, and the US after public disclosure, as the inventor, the source of the disclosure to file an application, and you're still okay. But you won't be okay in Europe. If you've had a public disclosure, a conversation with somebody without an NDA, or trade show, or a publication that you're putting it on the website, or in the US, even just a sale to a customer, a sale will start a clock starting, a one year clock starting. So you have to watch these these timeframes.


But you're right, I mean, people may not be aware, and then they find out and it's a bit too late. So part of what we do as IP professionals, and it's our duty, really, to go out and to communicate. Of course, the Canadian Patent Office themselves, I mean, they have a great website at C-I-P-O, CIPO. They have a wonderful website with databases that you can go and search. You can, sort of, educate yourself about the different kinds of IP and the timelines that are associated with the different kinds too, so there's a wealth of information there. But it is a duty to get the word out so that people can sort of say, "Okay, before you go to market, as you're developing your product, before you get it out there, let's take a moment to reflect and just say okay, before we before we go, let's just see if there are any steps we should be taking to file some applications for patents or designs or trademarks." It's a good time to reflect.


Christina Sjahli: Do you think it's more applicable, for patent are these more applicable to product-based business and technology-based business? In comparison to service-based? Have you seen any service-based that may need patent?


Isi Caulder: Absolutely. I mean, I think with AI coming in the way it is and software being such a important part of a service company. I mean companies are using software tools. They may be third-party tools, so that it may not be their IP, but there may be some IP issues there. But service companies are certainly using, they're automating a lot of their services, automating a lot of what they offer. There can be quite a bit of patent questions or patent possibilities with the tools that they're developing to provide services. So there can be something there as well.


I try to simplify it for people. But I just, I came across some interesting statistics back a couple of years from an IP Canada report from the Science and Economic Development, Innovation, Science, and Economic Development people. I think IP is really important, especially for SMEs. They did a really interesting study and I just wanted to mention this, but you know, SMEs holding formal IP are 1.6 more likely to experience high growth. So that means more than 20% a year growth. They're two times more likely to innovate, three times more likely to expand domestically, and three times more likely to expand internationally.


So I think people, in government, I think a lot of people are realizing how important it is for people, for us to demystify IP, to simplify IP, and really empower SMEs and individuals to think, "Okay, what do I possibly have from an IP point of view? and if I register a trademark, if I register a patent that is correlated with these signs of success" that I just mentioned. So I really think it is a compelling and a very real opportunity for companies to just take, have a coffee chat, have a coffee chat with an IP lawyer, and again, the accelerators are a great place to go to talk to people who are available and will not be charging, will not create a negative experience. I think there is that fear. I would really encourage your listeners to overcome that fear, go and find somebody to speak to that will welcome you and give you some some information that you might find very useful. I just think it's really important to get the word out, get people empowered. there are also a lot of funding opportunities that are available.


Christina Sjahli: Can you talk about that funding program then please, because I think that's gonna be very useful.


Isi Caulder: Well, there are a number of different funding programs. I actually have another map, which I would be happy if you shared with your listeners. On that map, there's the list of government programs that can support research, who can also support IP capture. So in that map, for example, I have incubators and accelerators listed there. I have the RIC Centre, ventureLAB, MaRS, Biomedical Bluestones, and all kinds of wonderful places, R&D, IP funding opportunities.


So the CanExport program is quite promising. They have a lot of people available to, in the different industry areas, go to the website and find specific people dedicated to kind of coach you through the process of applying for this. This essentially covers SMEs that want to go into international marketplaces. So, it may not be appropriate for everyone, of course. But if you have a partner in another country, or you have an association that you're working with, it is worth exploring this opportunity, for example, and there are others.


So for example, there's SHRED credits, which are tax credits that can be used for a business to get refunds, or getting credits rather, on the IP expenditures. But there's something that's really quite that my clients are have been using in good numbers, this program called CanExport SMEs. And it's, basically, small and medium sized companies may access up to $75,000 for international market development, with 75% of the cost covered. I can say a number of my clients have been able to cover significant amount of their IP costs under this program.


There are other loans. There's a service, and I believe it's still going it's called Government Concierge Service. I know, and there are places like that online where you can go and just get a list of funding opportunities, pick up the phone and have a conversation with somebody about, what your business is and how you may fit into some of these opportunities in Canada. We're very lucky to be here because our government is supporting a lot of these efforts, and innovation is definitely at the heart of what they're trying to incentivize.


Christina Sjahli: When business owners are thinking and they realize, "Okay, I have an IP and I know IP is an asset." What are the step? Or what do they need to do to have it ready, so they can use their IP as financing tool or financing asset?


Isi Caulder: This is something that we like to tell our clients for sure and people learning about IP and prospects. Keep your IP ready for investment. The first thing I would say is have an inventory: a current list of all the IP that you own or that you license. Have an idea of, essentially, what registrations do we have? What registrations have we received? What applications do we have in different offices? And then you would also take a look and say, "Okay, let's make sure we have the inventors and the authors." So inventors of any patents. Then the authors of any works that might be covered by copyright, make sure we understand where these things came from, the people that created them, and make sure we have agreements from these individuals to the company, so that the company is the clear owner of this IP. So you want to want to secure the ownership of the IP.


We do a lot of due diligence. In some cases, assignments have gone missing, assignments were never made. There's employment agreements but it's a bit vague as to what's covered. So there tends to be a bit of a cleanup process when we're doing due diligence. So it's really good to understand if you can right at the beginning, let's keep record when it comes to who created the IP. Let's put obligations on people to assign it to the company. Let's look at any other agreements we have with other companies or other partners, or financial financial institutions to understand are there security interests in the IP, and to make sure that we can present the IP free and clear.


The other thing to think about is maybe freedom to operate type analysis, and you know, that might be appropriate. It's not often that necessary, but sometimes investors really want to see that you've done some due diligence in terms of the landscape. Have you done your trademark searches? That's normally what we would do at the beginning of a process of a trademark application. So make sure you have copies of those searches. Ask those questions.


Also, on the patent side, have you done patent searches before you filed your applications? Yes, we did some due diligence. we did some searching. we didn't find anything, specifically what we're doing. So we're confident that we have some good applications lodged, that sort of due diligence in the background.


Then also just be ready to articulate an IP plan. I was just writing one up for a client today in terms of what are the industry areas that you're going into? What areas do you want to be competitive in? What are your business goals? And how do you align them to your IP goals? Okay, we have these products, we're really going to invest in these products. So let's make sure we have patents, we have industrial designs, we have the names we're going to use for these products. Let's make sure we have those in place. Let's look forward maybe a few years, what are we thinking? What other industries are we thinking we might go into? What are the countries we might go into? And have that in an IP plan that you can point to, you can provide to an investor, and you can tell them what your thinking is around IP. So all these pieces are very important in terms of being ready. These are all things that you can do to be ready.


Christina Sjahli: Earlier, you mentioned that as part of the process, there may be like missing employment agreement. I'm curious why employment agreement matters in this process?


Isi Caulder: Right. Well, employment agreements are important for many reasons, but one of them is IP. So generally speaking, when it comes to, from the patent perspective, because I see this all the time, we have employment agreements in place, that say, "Okay, anything an employee invents in the course of their business, they agree to assign to the company." Great, okay, that's in the employment agreement. Hopefully, there is an employment agreement. Sometimes there aren't. But generally there is.


Then when it comes to the particular invention that the person has made, we had actually prepared a separate assignment, confirmatory assignment just to for the paperwork, because we don't really want to file the employment agreement at the patent office. So we prepare an assignment that confirms the obligation and assigns this particular invention to the company, and then that gets filed at the patent office. That is a nicely done with a bow on top assignment of the interest to the company.


Christina Sjahli: Isi, you mentioned that when you are trying to collect all this IP, and then you need to register it, there is a cost to it. How can a business owner measure the cost and the benefit, which one is worthy to basically move forward and then maybe later on, this is going to be an asset that I can use for future financing?


Isi Caulder: So any investor would come along and say, "Oh, good, you have the employment agreement, check. You've got the confirmatory assignments to the company, check." That is investment ready. So there are these two layers that we like to see in place. I see this all the time with student teams. So I mentor at a few different places in Toronto here, at U of T and at Ryerson. I see student teams, sometimes, they're coming out of university and they're forming, they're working together, but they're all individuals, and they haven't quite figured out that they need to incorporate a company.


Now they're hitting the real world, but they're still really, they're really just working at it. But the reality is, it's very important to have a company that gathers all the IP that's created by the people associated with the company. So, independent contractors, the employees, all these different parties, where IP could be generated, it's very important to have the agreements in place and to have an entity that all those pieces of IP can be brought together.


Christina Sjahli: Isi, you mentioned that when you are trying to collect all this IP, and then you need to register it, there is a cost to it. How can a business owner measure the cost and the benefit, which one is worthy to basically move forward and then maybe later on, this is going to be an asset that I can use for future financing?


Isi Caulder: Mm hmm, exactly. So how do you discriminate? How do you really get to the point where it's like, yes, this is worth investing in, and yes, this is not worth investing in. That's a very good point. This is really part of the conversation that a company wants to have a strategy, an IP strategy. A law firm and IP lawyer shouldn't just be about registering things, right? And sending and reporting letters. An IP lawyer should be an advisor, a trusted advisor with their clients, sitting in the meetings, not charging necessarily right, just sitting in the meetings, understanding the business perspectives, and helping them develop an IP plan, which will contain, potentially, some filings and some different actions and different agreements.


But at the end of the day, the IP plan is so important and an IP lawyer should be helping a company understand, what exactly is the right approach? In that discussion, you would talk about what is your market potential? Are you thinking, how many millions of dollars will this make? Or how many hundreds of 1000s of dollars will this make? And does it merit a $2,000 investment in the trademark? It probably does, right? If it's hundreds of 1000s of dollars, it probably merits a $2,000 spend for a trademark. If it's hundreds of 1000s of dollars, will it really merit a 40 to $50,000 spend for a patent application registration in Canada and the US, for example? Because you can look at those sorts of costs on the patent side, 40, to 50, even 60, you know, to get North American coverage, more to get European coverage, in addition, and that sort of thing.


So you really look at the dollars that are contemplated and then the dollars to secure it. To some degree, you have to take a bit of a risk. But if you have a hunch that this market is a very important one in the marketplace, and the potential for this product is a very important potential, securing it with an IP filing of some sort, whether it's industrial design, or patents, or trademarks, you can have those discussions and you can say, "Is 5%, is 2%, a reasonable investment for this potential market and this potential profit?" Keeping in mind that it is competitive, and that your competitors are going to try to copy you. You'll have to be very careful with your manufacturing processes.


A client of mine makes a wonderful product that reduces tremors, and his approach to manufacturing is not to send the whole thing to the manufacturer overseas, but to send a piece to one company, another piece to another company. Now there are all these strategies that you can take that they are very aware of the value of your IP, that can really save your company huge losses and huge competition, and huge loss of revenue over time. So I would say IP can be a really, really strategic tool.


As you'd say, you don't want to protect everything and you don't want to protect everything in every country. You can be strategic about it. You can say, "Look, we're really focused on North America. We're just gonna focus on Canada and the US." Or you could say, maybe some other key countries that makes sense. But you can take the 80 20 rule and say, "Look, let's just protect the core; let's protect maybe a very important improvement. But we don't need to protect everything in every country. We can really be strategic about it."


Christina Sjahli: Now, is it possible as part of the strategy to go to the bank and basically saying, "Hey, you know, what, like, I don't have the patent yet, but I have this trade secret and then I have this industrial design. Can I use this for financing?"


Isi Caulder: Right. Well, that sounds reasonable. Like you can say, look, as I always say, patents are always started out as trade secrets. So your IP strategy could be, let's just keep this secret for a while. We have employment agreements that require everyone involved in the company to keep the secret and you have locked filing cabinets. You take other measures. Trade secret can be a very important IP strategy. But the thing is, you can't, when you go to the bank, I'm not sure exactly what you say. You say, "Look, we are keeping our IP as a trade secret, we have these measures." I mean, that can be interesting, but they can't really register security interest against a trade secret. There's no way of really doing that.


But as you say, you could start to look at industrial design protection, which is not as expensive as patents. If there's a particular look, a consumer good that has an appearance, surely you can capture that. There is a time limit to protecting your patents. So once, if you're not keeping your patent confidential, and of course, there's more prior art that's building up as well, right. I mean, the other side of a timely filing on the patent side is that you get ahead of competitor filings.


You get ahead of prior art that's popping up every day, that's publishing every day in the patent office. So there is an urgency, and I always say this to my colleagues when we're working for clients on the patent side, "We need to practice with urgency. We need to get our clients as early a filing date for good subject matter, for well-written subject matter as soon as we possibly can." So there is an urgency to the patent filing.

But as you say, you don't need to have a registered patent, necessarily, you can have an application with a patent search that you've done ahead of time. So those two things together can be very powerful. Like, we did a patent search. We didn't find anything, bang on. We filed a good application with a good firm. Yes, we're waiting because everyone has to wait. We can accelerate the examination, maybe in some cases, if it makes sense. But for the most part that will be looked upon very favorably by a number of parties, because you've taken steps to protect your IP. Now you're just waiting the administrative delay of examination.


Christina Sjahli: I know this topic is big, and I wish we have more time, but I know we don't. So is there anything else that you want to share with my audience that we haven't cover?


Isi Caulder: Your questions have been really wonderful and they've definitely taken us around a lot of the issues. I mean, I think at the end of the day, those three questions are really important just to sort of say, let's take a look at our difference. The difference that we present in the marketplace. What makes us tick? What makes us tick as a business?


Then, let's take let's think about all the different buckets of IP. So is there any functionality? Is there any software? Are there any devices that we've created? Is there any look? Or you know, when it goes on a shelf, does it look really attractive? Is there some industrial design aspect: our brands, what we call ourselves, what we call the products, are those clear? Have we done the searches? Are we going to file some registrations?


Copyright: have we put our copyright notice on our website? Have we put copyright notice on our different things that might have copyright in them? Then, trade secret: do we have a way that we, what are our agreements like? Do we have NDA with customers and third parties? Do we have employment agreements to maintain confidential information? So I think a company can really go through that relatively straightforwardly and ask these questions, have a dialogue and then see, maybe there's some steps that need to be taken.


Christina Sjahli: If my audience needs your expertise, Isi, where can people find you?


Isi Caulder: Oh, you can find me at I think icaulder@bereskinparr.com is my email at my law firm. And I'm also on Twitter. My handle is @isicaulder so you can find me on Twitter, and LinkedIn as well. Happy to set up a time to talk and just walk through some of the questions that, things that we talked about here and see how it applies to your business.


Christina Sjahli: Isi, thank you so much for being here.


Isi Caulder: Very welcome. It was a real pleasure. Thank you so much.


Christina Sjahli: That brings us to the end of another show. Thank you so much for listening to another episode of Her CEO Journey, the business finance podcast for women entrepreneurs. If you want to create a proactive financial plan and process for your business so you are ready to weather the financial storm over the next few months, let's chat and see what's possible for you. Book in a time to speak with me at christinasjahli.com/lets-chat.

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