Law Times

Law Times • apriL 20, 2015 Page 15 www.lawtimesnews.com Startups a key client base for IP boutiques BY MICHAEL McKIERNAN For Law Times im Gilbert has a little f lashback every time the founders of a startup company walk through the doors of his firm's Toronto office. "I remember starting with a briefcase and a cellphone on my own in 2001," says Gilbert, the founder and managing partner of intellectual property boutique Gilbert's LLP. The firm has since grown to 13 lawyers, but Gilbert says the entrepreneurial spirit of those early days remains. "I think that kind of experi- ence helps startups identify with us." Matt Powell, who heads the patent and industrial design prac- tice group at Gilbert's, says com- pany founders are getting better about seeking out professional help to deal with intellectual property issues from the outset as a result of the increasingly strin- gent requirements placed on them by potential investors. "Intellectual property protec- tion matters a lot when you're trying to attract finance because banks and other types of inves- tors want to know that there's re- ally good IP behind you. It's a bit like building a house. They don't want to give you the money and then find out halfway through that someone else is squatting on the land and you don't have clear title," says Powell. However, he says clients are usually less sure about precisely which services they need from an intellectual property lawyer. "Usually, they have a vague sense that they need to protect themselves in some way and that patents might be involved. We try to listen, hear where they are, and then come up with the best way forward," says Powell. In fact, Bhupinder Randhawa, head of Bereskin & Parr LLP's electrical and computer technol- ogy practice group, says patents don't necessarily have to form a part of a startup's intellectual property strategy. Depending on the type of industry they operate in and the competitiveness of the sector, the cost of drafting and enforcing patents can sometimes outweigh the competitive advan- tage they provide. "If you already have custom- ers and you're working in an area that is not particularly innovative, then you may or may not want to spend the money," says Rand- hawa. "Of course, patents are im- portant because of the statutory rights that come with them, but they're just one of many tools that people have to build a business." He says startup principals tend to give less thought to the f lip side of patent law: determining wheth- er their own technology infringes on the existing patents already out there and registered. "This is something most startups ignore altogether," says Randhawa. "You cannot write software these days without infringing someone's patents somewhere. What you want to do is ensure that your close competitors, the ones that will be most affected and most interested by what you are doing, don't have any IP that they can immediately attack you with. It can still be fine if they do because at least you know the risks and maybe you can design around it." Randhawa urges clients, par- ticularly consumer-facing ones, to think about their branding as soon as they can. That means set- tling on a name they can use in Canada and other potential mar- kets as well as securing domain names, among other issues. "You can't replace the value of reputation. I often tell clients, if all goes well and you're still around in 10 years, your brand may be worth more than your technol- ogy," he says. "Look at a company like Google. They started out in search, but when they branch out into other areas, like maps and e-mail, it's because of the Google brand that we all try it." Whatever the intellectual property needs of a startup may be, Michael Erdle says the budget constraints a new business faces mean the available cash rarely, if ever, matches up. He sees it as his job to help clients set priorities. "We can steer them in the right di- rection that gets them the biggest bang for their buck," says Erdle, a founding member of Deeth Wil- liams Wall LLP. "There's no point trying to do everything at once. Legally, in an ideal world, maybe there are some things that you would do immediately, but the re- ality is there's only so much mon- ey available to spend. We help you spend it wisely." And as companies establish themselves, priorities can change and further legal work becomes possible, says Erdle. "When you're developing new products and expanding across the country and into the U.S., then registering trademarks be- comes more important," he says. "It's a stepped approach. We look at the big picture and see what can be done now within your budget. Once you've moved further down the track, here's what comes next." According to Erdle, the f lex- ibility of firms exclusively fo- cused on intellectual property law makes them ideal partners for startups as they progress and grow in business. "Big law firms are good at dealing with big cor- porate clients with their own in- house lawyers and patent people who know what they want. They provide a valuable service, but I'm not sure they're as good at that kind of broader strategic advice." Randhawa says it's impos- sible for a full-service law firm to match the technical expertise of a boutique like his when it comes to intellectual property matters. "We hire for that purpose, to make sure that no matter what technology you come in with — whether it's electrical, mechanical, software or biochemical — we have someone here with the right training and expertise to help you. Clients feel we get what they are saying and they often tell us, 'It's like you could have invented it.' That's what we're aiming for." LT BRIEF: INTELLECTUAL PROPERTY BOUTIQUES Wortzmans_LT_Apr20_15.indd 1 2015-04-16 4:49 PM BereskinParr_LT_Apr20_15.indd 1 2015-04-14 9:01 AM ANNOUNCEMENT T

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