When does a business dispute become an intellectual property dispute?
Few people call a lawyer to say they have an intellectual property dispute. They say a partner walked out, a distributor was terminated, or a developer stopped answering emails.
The IP issue is in the details: who is still using the name, who has the code, who is still selling the product. Spotting it early matters, because IP claims come with their own remedies, their own courts, and their own deadlines.
Five ways it usually happens
The name outlives the relationship. A former partner, franchisee, or distributor keeps trading under the brand. The contract claim is about the termination. The trademark or passing off claim is about confusion in the market, and it can support an injunction.
A licence is exceeded, or has ended. Using software, content, or a brand outside the scope of a licence is often more than a breach of contract. It can be infringement.
The contractor never assigned. The business paid for a logo, a website, or an app, and has now fallen out with the person who made it. That person may still own the copyright.
Someone leaves with something. Code, designs, formulae, customer data: some of it is protected by copyright. Confidential information is not statutory IP, but the courts protect it through the action for breach of confidence (Lac Minerals Ltd v International Corona Resources Ltd, [1989] 2 SCR 574).
A competitor's product looks familiar. A former supplier or manufacturer starts selling something close to yours, under a name close to yours.
Why the label matters
Remedies. IP claims can support an injunction, an accounting of the defendant's profits, and an order to hand over infringing goods. Under the Copyright Act, RSC 1985, c C-42, s 38.1, an owner can elect statutory damages of $500 to $20,000 per work for commercial infringement, without proving actual loss.
Court. An IP claim may open the door to the Federal Court, whose orders take effect across Canada. A pure contract dispute cannot be brought there.
Deadlines. Copyright claims generally must be started within three years. Patent remedies reach back six years. Most other civil claims in Ontario face a basic two-year limitation period. A dispute with several claims has several clocks.
The right plaintiff. IP belongs to a specific person or company, and it is not always the one that signed the contract. That has to be sorted out before the claim is issued.
Exposure. Asserting an IP right invites an attack on the right itself. A defendant accused of infringing a trademark or patent will often respond by challenging its validity. The claim raises the stakes for both sides.
It runs the other way too
Some disputes dressed as IP cases are really contract cases. If the true question is what the parties agreed to, calling it infringement will not move it to a different court. It will add cost, and a motion to strike.
The skill is in identifying the essential character of the dispute and building the case around that.
Questions worth asking on day one
Which names, logos, and domain names are involved? Who used or registered each one first?
Who wrote the code, content, or designs? What did they sign?
Which licences exist, and what do they say about termination?
What confidential information did the other side have access to?
What is the other side doing in the market right now?
The answers do not always change the case. When they do, they tend to change it completely.
This post is general information about Canadian law. It is not legal advice about your situation.
