President Trump’s tariff threat is a wake-up call for Canadian innovators. More than ever, Canadian businesses must pay more attention to their intellectual property assets.

President Trump has made it clear that his “America First” policies are intended to provide economic protectionism for American companies. Tariffs are a tool at his disposal to encourage American companies to rely less on goods produced in foreign countries and, instead, look for American-made, tariff-avoiding solutions.

If this plan is successful, American companies that have historically relied on Canadian businesses to supply goods or parts for products assembled in the United States will be encouraged to find American-made replacements. Even the mere threat of potentially losing this important revenue stream will have a tremendous impact on Canadian businesses.

With tariff uncertainty reshaping global trade, protecting intellectual property has never been more important. By identifying key IP assets, securing patents abroad, and taking advantage of international trademark systems, Canadian businesses can better position themselves for long-term success.

The power of patents in a protectionist market

One way that Canadian businesses, and all foreign-based companies selling goods in or to the United States, can safeguard their interests from potential lost revenues is to ensure that their intellectual property assets are fully identified and protected—not just at home, but more importantly in the United States and abroad.

Although Canadian businesses have long been counselled about the importance of protecting their intellectual property assets in the United States, it is more important now than ever that those assets are protected south of the border. This is because United States Patent Law, like nearly all other jurisdictions, provides a patent holder the right to “exclude others from making, using, offering for sale, or selling” an invention or “importing” it into the United States.

As such, a Canadian entity that holds a U.S. Patent can prevent American-based businesses from making, using, or importing that patented technology into the United States. These rights can even safeguard the Canadian patent holder from the U.S. government striking a more favorable trade deal with a nation where the patented technology can be made and imported into the United States at a lower tariff rate than what is currently proposed for goods produced in Canada.

This would apply even if the owner of those intellectual property assets did not have protection in the jurisdiction where the patented product was being manufactured and eventually imported into the United States.

Preparing for the long-term impact of U.S. tariffs

So, what should Canadian businesses be doing now to prepare themselves for the potential long-term effects of tariffs?

Audit your intellectual property assets

First and foremost, all Canadian businesses that produce goods sold in the United States should undertake an intellectual property asset audit. Companies should take a deep dive into their businesses to identify all the intellectual property assets that are critical for their competitive advantage in the marketplace.

After those assets have been identified, a strategy should be developed to protect those assets in the event a competitor, or even a long-standing customer based in the United States, decides it would be better to produce that product in the United States rather than pay a 25 per cent tariff to obtain it from Canada.

Additionally, intellectual property strategies should now consider jurisdictions that may not have always been top of mind for Canadian businesses, as shifting trade deals may provide access to new markets and opportunities.

The Madrid Protocol: Expand your trademark protection beyond Canada

Canadian businesses should also consider registering their trademarks in the United States and elsewhere internationally, if they are considering taking their business global. 

One option available to Canadian businesses is international registration and subsequent designation of their trademarks via the Madrid Protocol.  The Madrid Protocol provides trademark owners the possibility of filing a single application for international registration with the World Intellectual Property Organization, and subsequently “designating” other member countries where national protection is sought.  National designations under the Madrid Protocol may be made in most international jurisdictions, including most of Canada’s major trading partners. 

In effect, this gives Canadian businesses the opportunity to seek registered trademark protection and protect their brands in major export markets and cost-effectively seek international protection for their trademarks.

Reversing the decline in Canadian IP filings

This new economic environment that Canadian businesses find themselves in will require greater importance placed on intellectual property, something that recent statistics indicate has been decreasing year after year.

In 2023, the last year in which the Canadian Intellectual Property Office (“CIPO”) published filing statistics, there was a 10 per cent decrease over the previous year in patent applications filed in Canada by applicants with a Canadian address, which was tied for the greatest decrease in filings at CIPO based on residency of applicant IP Canada Report 2024.

This trend of decreased patent filings by Canadians is also seen abroad, including at the United States Patent and Trademark Office. To remain viable, Canadian businesses will need to reverse these trends and change their views on their intellectual property.

Canadian government support for IP strategies

The Canadian government can help businesses thrive in this new economic reality by supporting the execution of their intellectual property strategies.

Although government programs currently exist to help offset the costs of identifying intellectual property and of developing strategies for protecting companies’ assets, the funding to actually execute those strategies has traditionally been lacking. Introducing new government funding programs that provide assistance to Canadian businesses, from the early stage of identifying their intellectual property to executing their intellectual property strategy, including global filings, will give an advantage to businesses affected by economic protectionist agendas in the United States.

The evolving landscape of U.S. trade policies under the "America First" agenda presents both challenges and opportunities for Canadian businesses. By proactively identifying and protecting their intellectual property assets, Canadian businesses can safeguard their competitive edge and secure their place in the global market.

As the importance of intellectual property continues to grow, it is crucial for both businesses and the Canadian government to invest in robust IP strategies. This will not only help mitigate the impact of potential tariffs but also position Canadian innovators for long-term success in an increasingly protectionist world.

To learn more about protecting your business through intellectual property strategies, reach out to the authors or a member of our Intellectual Property Group. To keep up to date with the latest on tariffs, please visit our tariff hub.