Tuesday, November 23, 2010

Directors' responsibilities

An opportunity arises and you have the opportunity to become a Director.  To sit on a Board of Directors is exciting, whether it's your own company or if it's an entity like a charity or a not-for-profit that you're especially passionate about.

But before you take that plunge, know that Directors have special legal responsibilities to the company, over even that of Officers (CEOs or CFOs).  Directors owe a fiduciary duty to the corporation.  What this means is that as a Director, you must act honestly and in good faith in the best interests of the corporation, rather than in your own personal interest.

While at first glance this may sound self explanatory and you may wonder why fiduciary duty is such a big issue, the reality is that in ordinary everyday business dealings, Directors often forget about this fiduciary and unknowingly breach it. 

So before taking that big seat at the Directors' table, be sure to consult a lawyer and know the new responsibilities that you're taking on.

Monday, November 15, 2010

Appeal - Patents claiming a method of doing business

As I posted earlier, on October 14, 2010 the Federal Court in Amazon v. Canada, 2010 FC 1011 held that a method of doing business (a "business method") can be patentable subject matter, and that there is no categorical exclusion for business method patents. The Court rejected the Canadian Intellectual Property Office's reliance on foreign legislation and foreign court decisions, and the Canadian Intellectual Property Office has no discretion to refuse a patent on the basis of public policy and must always substantiate its decision with express provisions in the Patent Act.

Today, the Department of Justice on behalf of the Canadian Intellectual Property Office filed an appeal to the Federal Court of Appeal, in court file A-435-10.  With the launch of the appeal, Amazon has 10 days to cross-appeal (appeal the Federal Court decision on grounds other than those raised by the DOJ) if they so desire.

The results of the appeal will not be known for some time (likely within a year).  In the meantime, the Federal Court decision stands, and it is the law in Canada that a method of doing business is patentable subject matter.

Sunday, November 07, 2010

The SR&ED Tax Incentive Program

Research and development is expensive, and as an innovative entrepreneur you need all the financial help you can get. 

One of the best things you can do for your startup financially is to apply for the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program. 

What is it?
The SR&ED is a tax incentive program to encourage Canadian businesses to conduct research and development in Canada.  You can use SR&ED investment tax credits for expenses such as wages, materials, and equipment.

Who qualifies for it?
Generally, a Canadian-controlled private corporation (CCPC) can earn an investment tax credit of 35% up to the first $3 million of qualified expenditures for scientific research and experimental development carried out in Canada, and 20% on any excess amount.

What kind of projects qualify?
To qualify for the SR&ED program, work must advance the understanding of scientific relations or technologies, address scientific or technological uncertainty, and incorporate a systematic investigation by qualified personnel.

For more information about the SR&ED, including how to apply for the SR&ED, visit the CRA's web site at http://www.cra-arc.gc.ca/txcrdt/sred-rsde/bts-eng.html.