By LegalMatters Staff • Putting your legal house in order can help a business get the jump on the competition when coronavirus restrictions are lifted, says Toronto technology lawyer Allan Colquhoun.
Colquhoun is founder and principal of Elan Techlaw and a founder and patent agent at Elan IP, serving corporate and commercial clients with mergers and acquisitions, licensing and intellectual property (IP) issues.
He tells LegalMattersCanada.ca that he has developed a series of informational videos that offer quick tips to help guide businesses through different legal challenges and one of his latest takes aim at the post-COVID-19 world.
Colquhoun says when coronavirus sanctions were introduced, he began to think about what he could do to help potential clients.
Forgotten details
“I don’t do employment law or wills and estates, many of the things people need right now. It’s been a little bit frustrating not being able to offer help,” Colquhoun says. “It occurred to me that when businesses are booming and they’re signing new customers there are things beneath the surface that they may be forgetting about or don’t have time to do.”
Colquhoun says he realized that some companies may be in a holding pattern during the pandemic so he decided to create a video providing tips to put owners on more solid ground when it’s time to get back to work.
“There’s no question businesses have been impacted by COVID-19 but we’re going to get through this and continue to grow and evolve,” Colquhoun says “If they spend a little time getting their legal house in order they will be able to come out faster, stronger and more able to compete in the market.”
He explains that there are three legal aspects worth checking in on starting with corporate records.
Colquhoun says now is a good opportunity for organizations to examine their minute books, which are used to store essential corporate documents.
‘False sense of security’
“The importance of minute books varies from company to company and often you can get into this false sense of security that they are not important to stay on top of,” he says. “But if you are looking for investors or you want to sell, those are the key times that people will want your minute books to be up to date.”
Colquhoun says business deals can be jeopardized “if your minute books are a mess.”
“Investors may not expect your books to be fully updated but they are going to ask and that may impact their decision to fund you or not,” he says. “It’s a real confidence booster if you can deliver an updated minute book. It’s a major plus for a potential buyer.”
Colquhoun says businesses should next examine any intellectual property issues.
“In today’s society, there’s a lot of focus on IP. But businesses don’t always stay on top of their intellectual property, especially during growth phases,” he says.
Intellectual property rights
Colquhoun recommends performing an IP audit adding “there are some areas that are less concerning than others” when it comes to intellectual property rights.
“For example, copyright and trademarks both have common-law rights upon creation. You don’t have to register either of those, at least in Canada, to have rights to them,” he says. “But things are different for patentable inventions. You don’t have any rights until you file and ultimately get the patent.”
Colquhoun says “if you create new products and don’t stop to take stock and come up with strategies to protect them, you have a gap.”
Product roadmap
“What inventions have your team come up with that they might consider filing patent protection for? This doesn’t have to be a complicated exercise,” he says. “Touch base with your team and have them explain the coolest features they’ve added to your product in the past year and what’s on your product roadmap for the future. Sit down and chronicle those and see if you want to file a patent. You’ll feel much more confident about your IP position.”
Beyond auditing what rights a company has, Colquhoun says businesses should examine “other details to help support your intellectual property audit.”
“You want to make sure your employees are assigning their IP to the company. It seems obvious but not all employment agreements do that properly,” he says.
Use of open-source
It is also important to pay attention to the use of open-source, Colquhoun says.
“There isn’t a lot of case law on this, so you want to ensure you are protected,” he says. “You want to make sure your technical teams aren’t using the sort of open source tools that would force your secret sauce to become open source.”
Colquhoun also suggests businesses review their customer base and how they are licensing to them then take a look at what developments lay ahead.
Finally, he says, businesses should consider their contracts.
“When you think about coming out of COVID-19 you should consider whether your contracting playbook needs to be updated. You might need to create a template for a new product or service you plan to offer,” Colquhoun says. “There are many ways things that can change and ultimately you want to be thinking about how to be contracting customers post-coronavirus.”
Get a jump on the competition
Anticipating changes and revising contracts can help a business get the jump on the competition, he says.
“Get updates in place now so when those customers are hungry for your services or your products, you can sign them up right away,” Colquhoun says. “If you are in a competitive market, making a customer wait for a contract could mean the difference between winning the deal or not.
“You may be pivoting in a new business direction and that might mean a new product, a new module, a new target market, a new way of selling or licensing your technology. Your old contracting playbook – how you sign up new customers – might not be ready for the pivot,” he adds.
Colquhoun says preparing for the next steps coming out of the pandemic can go a long way to determining the success of any business.
“Take the time to review your practices,” he says. “Doing that first level of review is something you can manage on your own but if you find you need more help, getting legal advice is a good idea.”
