Have you taken a look at your employment contract recently? If you leave your job, does it keep you from doing working in the same type of job for a competitor or starting a competing business? If so, how for long and in what area?
Or maybe, rather than keeping you from working for a competitor or starting your own competing business, maybe your contract requires you to pay your employer instead. This is exactly what happened to a newly licensed vet in Creston who entered into a 3 year agreement with a local vet clinic. In the event of termination (by her or the clinic), her contract with the clinic required her to pay the clinic $150K for terminatin within 1 one year, $120K within 2 years and $90K within 3 years. The contract stated the vet agreed to pay the amount given the clinic’s investment in her training and transfer of goodwill in the business to her.
As often happens in contractual relationships, differences of opinion arose between the vet and the clinic, the vet terminated the agreement and brought court proceedings to have the section of the contract requiring the payment declared unenforceable. The court action proceeded all the way to the BC Court of Appeal.
The BCCA found that while this section was not a traditional non-competition agreement because it did not prohibit the vet from competing with the clinic, it was still a kind of non-competition clause because it effectively provided for no competition without payment. So, while the section was a restraint in trade, it was found to be reasonable and therefore, enforceable.
Restraint of trade clauses are often found in employment contracts, but not all such clauses will be enforceable. Whether you are an employer thinking about having your client sign a non-competition agreement or you are an employee looking at joining a business where you are being asked to make a promise to pay like the newly licensed vet, it will be important to seek legal advice.
Authored by Denese Espeut-Post (May 21, 2015)
Full Trade-Mark Services in the South Okanagan
Here at Avery Law Office, we offer a complete range of trade-mark services. As a registered trade-mark agent, we can assist you with your trade-mark application and represent you before the Canadian Intellectual Property Office.
We offer trade-mark prosecution, portfolio management and advisory services which includes the performance of trade-mark searches, and the evaluation of registrability of non-traditional marks such as packaging, sound, three dimensional shapes and color-only marks. We can assist you with domain name and Internet advisory services involving trade mark protection. Let us centrally manage and monitor your global trade-mark filings and handle administrative matters such as the use of your mark by others and related tasks such as billing and reporting.
We can provide you with advice, negotiate and draft trade-mark assignment and licensing agreements. We can help you navigate commercial transactions with trade-mark related issues. We can also assist you in policing your mark, engaging in due diligence and audits. We can handle your trade-mark opposition and cancellation proceedings and trade-mark infringement litigation.
Should I register a Trade-mark?
No one has to register a trade-mark. Frankly, in some situations, trade-mark registration may not be worth your while at the current time. As a business owner, you need to ask yourself if you should register a trade-mark and if you think you should, whether you should register your trade-mark now or in the future.
As with any business decision, deciding whether to should consider the benefits versus the costs. As a business owner, you want a reasonable return on your investment. Weigh the time and costs of the application process against the value of the legal protection the registration will give you. What protection? On a practical basis, because of the searching that your trade-mark agent and the Canadian Intellectual Property Office complete to determine whether your proposed mark is confusing with another, some assurance should be provided that your mark does not infringe another’s mark and you will not be in a position where you will need to change your trade-mark. Also, registration provides you with rights that you can enforce against others that may infringe your mark.
In our opinion, the following factors favor registration sooner rather than later:
Investment of lots of money in packaging and signage
Large investment in marketing
Likely expansion beyond one location
Significant potential harm to your business if another business assumes a similar or confusing mark anywhere in Canada
Intention to franchise
Significant financial cost or lost reputation if you need to change your mark the future
On the other hand, you choose not to register a trade-mark if you carry on a small business in a single location that is closely associated to you. An example of this would be a sole proprietorship or small incorporated business.
Come see us at Avery Law Office to assist you in considering the decision regarding whether to submit an application for registration and the timing of that application.
Do I Need a Trade-mark Agent?
You can act for yourself when you submit an application for a trade-mark to the Canadian Intellectual Property Office. You don’t have to hire a registered trade-mark agent, but dealing with trade-marks can be complex and costly. A trade-mark agent will help you understand the process, timeline and avoid common errors.
If you are submitting an application in Canada but you reside outside of Canada, you must have a Representative for Service in Canada. A Canadian trade-mark agent can act in this role for you.
At Avery Law Office, you can hire our boutique law firm to assist you with the application process at reasonable rates suited to meet your budget.