Father-and-son team Yoland and Shaun Talbot thought they’d hit the jackpot with Yoland’s very first invention.
But instead of a massive, almost million-dollar sale to a national coffee chain, they’ve been left with a bitter taste in their mouths.
At the onset of the pandemic in March 2020, Yoland, 67, visited a Tim Hortons drive-thru near the family’s home of Collingwood, Ont. He was disturbed to see the server handling the lid of his coffee cup immediately after taking his payment.
“It just rang a bell for me,” he said. “I thought there has to be a different way to apply a lid, a way to have a safe coffee. Because I would have stopped drinking coffee at that point, seeing that.”
As a superintendent for low-income housing developments, Yoland had zero experience as an inventor. Within three days, however, he’d come up with a design, and his son Shaun, 42, had found a manufacturer to produce thousands of the new device, dubbed the CleanCap.
The product is a simple ring manufactured with medical-grade plastic. It easily grips a single lid from a stack, and can then be used to place the lid securely on top of a coffee cup, hands free. A lawyer in Toronto helped the pair file applications for patents in the U.S. and Canada.
The ‘red cap’ lid applicator used by Tim Hortons is seen next to the CleanCap, which the Talbots had pitched to the coffee giant. (Dianne Buckner/CBC)
Potentially huge order
Shaun took the role of salesman, and began contacting fast-food operators. He said when they met with a Tim Hortons corporate-level manager, he was immediately enthusiastic about the CleanCap.
“When I first showed him how to use the product, he actually left the meeting, and scurried back to the office and got on the phone. He was like ‘they’ve come up with something brilliant,'” Shaun recalled.
Excited by the reception, the pair felt confident to pitch other restaurants on the CleanCap and other COVID-related products Yoland had invented such as the CleanStix, a device to extend point-of-sale payment machines to customers at drive-thru windows. They set up meetings with other chains and individual franchisees, making some significant sales of both CleanStix and CleanCap.
Tim Hortons remained their biggest financial opportunity, however. There was discussion with a procurement officer at head office about a massive, chainwide purchase of the CleanCap worth as much as $870,000. The Talbots said the company had asked for hundreds of samples to be sent to franchisees across the country for testing, and had even sent the CleanCap for environmental testing at a firm in North Carolina.
Every test was a success, said Shaun. “I was told by an individual inside Tim Hortons that they had never seen something come back with 100 per cent approval rating.”
The Talbots produced a variety of CleanCaps to fit the lids of different brands. Their product was purchased by a McDonald’s franchisee in Collingwood, Ont. (Submitted by CleanStix)
But in July, the entire deal fell apart over pricing. The chain wanted to pay $4.99 per cap, and as the Talbots were charging a $15 wholesale price to other fast-food chains, they viewed the Tims offer as “not viable.”
Yoland and Shaun focused their energies on other potential buyers, and continued to make sales at select locations of A&W, Starbucks, McDonald’s, Second Cup and Burger King.
A shocking discovery
Then several weeks ago, out on a delivery run near Oakville, Ont., Shaun stopped for a coffee at a local Tims. He says he couldn’t believe what he saw — the server was using a device that looked exactly the same as the CleanCap. “The only difference was that it had been manufactured in red plastic,” he said.
He called other Tims locations across Canada that had tested his father’s product, and discovered that a number of them were now using the “red cap,” as he called it, while others had one in blue. Some appeared to be unaware it wasn’t the Talbots’ invention. “One woman told me ‘we love your product,'” he said. “She had no idea.”
Shaun called Tim Hortons head office to complain that the company had produced what he considered to be a knock-off, and received a letter back denying that the company had shared any intellectual property or designs from the Talbots with other suppliers.
WATCH | Tim Hortons took idea for hands-free lid applicator, entrepreneurs allege:
A father-and-son entrepreneurial team tells CBC’s Go Public that Tim Hortons stole their idea for a hands-free applicator for coffee cup lids after being shown early prototypes. 2:18
After being contacted by the Go Public team, Tim Hortons issued a statement to CBC News. It said the company had received proposals for lid applicators from a number of different suppliers. “The suggestion that we shopped around someone’s idea to find a better price is absolutely not true,” it said. “We did not instruct any vendor to design this product on our behalf — we simply responded to multiple vendors who brought forward substantially similar ideas.”
The coffee chain also noted that, so far, it has not yet decided whether it will proceed with any vendor to make lid applicators standard across the chain.
The statement added that the case is simply one of fair procurement, and suggested the Talbots’ desire to speak to CBC News about their experience is odd. “It is unusual for companies to complain to the media if they are unable to secure a contract through the standard process.”
Expert opinion
Go Public contacted independent product designer Kevin Bailey for an outside perspective on just how closely the Tims device resembles the Talbots’ CleanCap. Bailey’s Ottawa-based firm, Design 1st, has years of experience dealing with large companies and patents; in 2020 alone it invented and sold 70 different products.
Bailey was asked to examine both the CleanCap and the “red ring” currently in use at a number of Tim Hortons locations across the country.
His verdict? “They are virtually identical,” he said. “There’s only one feature on this product that is relevant, which is the gripping surface. And the two products have the exact same gripping surface and very similar materials.”
Out of curiosity, Bailey staged an experiment to determine how likely it would be for separate individuals to come up with such strikingly similar designs. He called on three of his firm’s designers and — without sharing the background of the Talbots’ situation with Tim Hortons — asked them to come up with a hands-free lid applicator.
A server at a Tim Hortons in Vancouver demonstrates the lid applicator the chain is currently using in some locations. (Erica Johnson/CBC)
“There was no collaboration between them, no source material,” he said. “Just a coffee cup and the problem to be solved.”
The team came up with eight different types of applicators, and actually manufactured one using an in-house 3-D printer. None matched the CleanCap as closely as the red ring from Tim Hortons.
Inventor Kevin Bailey of Design 1st compares the coffee lid applicator his team designed to the two applicators in question. (Dianne Buckner/CBC)
“It didn’t take long to come up with a design, but the design of this,” said Bailey, holding up his team’s design in one hand and the Tims and Talbots devices in the other, “is significantly different than these two. And so were the other seven designs.”
Go Public asked Tim Hortons about Bailey’s findings. The company’s reply: “We were not involved in the design of any of the products that we evaluated and cannot speak to any similarities in their designs.”
The possibility of legal action
Bailey said that it’s very common for small business people to worry about submitting a patent-pending product to a big corporation.
“It’s David and Goliath,” he said. “And for the most part, I don’t think companies are predisposed to take inventors’ ideas. They want a solution. I think that’s where things fall apart; inventors have to do design and create the business at the same time, and are maybe too slow for the engine that requires the goods.”
He added that having the lowest possible price is always a key factor in making a sale. “Entrepreneurs often want to support local businesses, but usually China can make things for a fraction of the cost.” The Talbots had indeed worked with an Ontario-based manufacturer not far from Collingwood.
Other than that, in Bailey’s view, they did everything right.
Patent lawyer Elliott Gold of Ridout & Maybee LLP said that if the Talbots truly believe Tim Hortons copied their design, they could consider legal action — but that could only happen if their patent is granted, which is not guaranteed.
“The patent lawyers and the patent office go back and forth and argue about what you’re actually entitled to for protection. And it takes typically two to three years, if not more,” he said. He estimates the cost of getting to the discovery stage prior to a trial can cost $100,000, while actually going to trial costs much more.
Next steps
Bailey, the independent designer, said at the end of the day, the decision about whether to sue is a math equation. “The biggest challenge is that it costs money to go to court and defend yourself,” he said, explaining it makes no sense to spend more on a lawsuit than you could potentially collect as damages, measured by the potential revenue lost.
Given that Yoland was laid off from his superintendent position at the start of the pandemic, and that Shaun’s work in the recreation business also disappeared, the two are pinning their family’s financial situation on growing sales for Yoland’s inventions.
Dominic Ling, who purchased the CleanCap for the 22 A&W franchises he operates in Ontario, said he believes the CleanCap is an important safety measure that should be used widely across Canada. “I think it’s something that should have been mandated even before the pandemic,” he said, noting that A&W’s “standards board” is currently reviewing whether to implement the CleanCap system-wide.
Bruce Collett, who handles purchasing at the University of Guelph, bought the CleanCap for use at the on-campus coffee shops. They include Starbucks, Second Cup, Tim Hortons and Planet Bean. He said he felt a $15 price tag was reasonable.
Images of the various coffee lid applicators designed by Bailey’s firm. They fell into three categories of function and, unlike the Tim Hortons device, none was exactly like Yoland’s design. (Submitted by Design 1st)
“It’s good, solid plastic. This isn’t something that’s going to break.”
The Talbots are convinced their products have a future even beyond COVID-19. So far, they say they’ve sold over $200,000 worth.
“If you went out for dinner and the waiter brings your beverages, and then before they walk away, they lean over and put their hand on the surface area of your wine glass or the top of your beer — would you drink that?” Shaun asked. “It would be a bit odd.”
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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.
The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.
Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.
The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.
Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”
“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.
“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”
Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.
The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.
It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.
Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.
It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.
“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.
Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.
The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.
Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.
The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.
“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.
Asked how long that environment could last, he said that’s out of Telus’ hands.
“What I can control, though, is how we go to market and how we lead with our products,” he said.
“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”
Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.
On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.
That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.
Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”
“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.
“We will continue to monitor developments and will take further action if our codes are not being followed.”
French said any initiative to boost transparency is a step in the right direction.
“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.
“I think everyone looking in the mirror would say there’s room for improvement.”
This report by The Canadian Press was first published Nov. 8, 2024.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
