The invisible balance sheet: Safeguarding your company’s intellectual property

John Sanche, Chelsea Nimmo, and Bruna Kalinoski of BD&P discuss how intellectual property risks emerge in contracts, deals, and partnerships during a lunch and learn at the firm’s Calgary office — Photo by Jennifer Friesen, Digital Journal

Many companies don’t lose intellectual property (IP) because someone steals it. They lose it because they never fully secured it in the first place.

Ownership gaps tend to hide in plain sight, buried in standard contracts, informal arrangements, and technology that evolves faster than the legal framework around it. The problems often surface only when a company grows, raises capital, or enters a deal, when fixing them becomes far more difficult.

“Every business does have some amount of IP,” says John Sanche, partner and trademark agent at BD&P. “Certainly, at least in the trade secret part of the spectrum.” 

He shared the observation during a recent lunch and learn at the firm’s Calgary office, where lawyers discussed how IP risk shows up in everyday business decisions. 

That is often the part companies overlook.

“If you think about what differentiates your business or what makes it better than its competitors,” Sanche says, “that’s generally where your trade secrets are.”

Those assets often remain in the background until growth, investment, or a transaction forces ownership questions into focus. By that point, the cost of getting it wrong can be much higher.

The contract language that quietly decides who owns what

Many IP disputes don’t start with bad behaviour, says Bruna Kalinoski, associate in BD&P’s intellectual property and litigation groups. They start with contracts, or with assumptions about contracts, that appear settled until they are tested.

Employment and contractor agreements often include ownership language that sounds decisive to a business reader.

It may not be.

In legal terms, an assignment is the act of transferring ownership from one party to another. It is the point at which rights actually change hands, rather than a promise that they will transfer at some later date.

Kalinoski explains that language pointing to something happening later can leave ownership unresolved, even when companies assume it has already changed hands.

“If you think that that’s a clear assignment clause,” she says, “then think again.”

During the discussion, Kalinoski points to wording she frequently encounters in practice. Clauses that say an employee “agrees to assign” or “shall assign” intellectual property can function as promises to transfer ownership later, rather than proof that ownership has already changed hands.

What holds up more reliably is language that makes clear the assignment is happening now. Kalinoski does not offer model wording, but stresses that the distinction comes down to whether ownership is transferred immediately or merely promised for the future.

The fix can be simple, and it comes down to specific words. Assignment language needs to operate in the present tense, particularly in agreements with employees and independent contractors that create software, data, or other core assets.

Why IP problems surface during deals

IP risk often becomes visible during mergers and acquisitions, especially when technology is not the main reason for the deal.

“I have one case right now where, literally, a key piece of software is forgotten about in the deal,” says Chelsea Nimmo, counsel in BD&P’s litigation and intellectual property groups.

The transaction moved ahead on other priorities. The buyer assumed the software was included. It wasn’t. A third party owned it, something that only came to light after closing, when leverage was gone and the issue had shifted from diligence to dispute.

Nimmo and her colleagues say these situations often arise from gaps in documentation rather than intent. Early contributors may never have signed assignment agreements. Independent contractors may retain ownership by default. Core systems may rely on licences that were never fully reviewed.

Rather than treating IP diligence as a paperwork exercise, Nimmo stresses starting with practical conversations.

An informal discussion between technical leaders and IP counsel can help identify material software, data dependencies, and ownership risks before a deal closes.

Collaboration raises the stakes further

Partnerships and joint ventures introduce another layer of complexity.

“Oftentimes, clients say, ‘We just want to co-own everything,’” Sanche says. “And if you just leave it at that, it’s pretty open ended.”

Sanche says the real issue is often whether a company can clearly prove what it owns. That starts with chain of title. Registered IP, such as patents or trademarks, is typically easier to trace. For other forms of IP, ownership depends on what employment and contractor agreements say, and whether those agreements actually assign rights in writing.

Without that clarity, co-ownership can quickly create uncertainty around licensing, commercialization, enforcement, and exit.

In practice, Sanche says that often leads parties to structure arrangements so one party owns the IP and grants broad licence rights to the other, rather than relying on shared ownership.

When AI turns small gaps into big problems

Artificial intelligence does not introduce entirely new IP issues. Speakers at the session describe it as accelerating risks that already exist.

“What you want to watch out for is putting your trade secret, or more generally, trade secret or confidential information into a public AI model or a vendor model where you haven’t negotiated very strong confidentiality protections,” says Sanche.

Once that information is shared externally, control becomes uncertain.

AI also raises unresolved questions about who can legally be named as the creator of an invention. Courts in multiple jurisdictions have rejected attempts to name AI systems as inventors, and Canadian authorities are taking a similar approach.

Digital Journal has also explored how long-standing legal definitions of authorship and ownership continue to shape IP strategy as new technologies emerge.

“In Canada, in June this year, the patent office issued a decision refusing a patent application,” says Kalinoski. “Because it is developed by an AI system, and the patent application specifically referred to the AI system as the inventor.”

For businesses using AI to accelerate research, design, or development, Kalinoski says that gap between how innovation happens and how ownership is recognized is becoming harder to ignore.

The business impact of IP ownership

“The value of innovation can quickly be undermined if IP ownership is not clearly defined and protected,” Kalinoski says.

For Canadian companies, those working at the intersection of IP and business say intellectual property governance shapes how easily innovation can be commercialized, financed, and scaled.

When ownership is unclear, value can erode quietly, often long before a dispute or transaction brings it into focus.

Intellectual property may not appear on a balance sheet. But for leaders navigating hiring, partnerships, acquisitions, and AI adoption, it is already part of the strategy. The challenge is recognizing it early enough and treating IP ownership as a leadership decision rather than a legal clean-up exercise.

Final Shots

• Intellectual property extends far beyond patents and trademarks. For many businesses, the most valuable IP lives in software, data, internal processes, and trade secrets.
• Ownership gaps usually come from paperwork, not bad actors. Contracts that look settled can fall apart when tested during growth, financing, or a transaction.
• Small wording differences in agreements can have outsized consequences. Whether ownership transfers now or is merely promised can determine who actually controls core assets.
• Mergers, partnerships, and joint ventures expose IP risk quickly. If you cannot clearly prove what you own, leverage disappears fast.
• AI does not rewrite IP law, but it magnifies existing weaknesses. Companies using AI need to understand how ownership, confidentiality, and authorship are recognized before scaling its use.