Intellectual Patent Rights as Contract Term

Ownership of intellectual property created by employees turns on whether the work was produced in the course of their assigned duties. Section 13(3) of the Copyright Act provides that an employer is the first owner of a work created by an employee only if it falls within the employee’s responsibilities and there is no agreement to the contrary, a principle sometimes described as the “Copyright Act patent rights as contract term.”

In Spiroll Corp v Putti  ¹ the court held that inventions created by an employee outside the scope of their duties were not the employer’s property, a reasoning also cited in Seanix v Ircha.

This principle was recently reaffirmed in Nexus Solutions Inc. v Krougly, in which the Ontario Court of Appeal found that software developed secretly by a senior developer on his own time, using his own resources, and outside his assigned duties remained his property, even though it competed with the employer’s product.

These cases highlight that actual duties, not the general class of work an employee could have been asked to perform, determine ownership. They also underscore the importance of a clear written agreement defining intellectual property rights in the employment context.

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David Harris — Canadian Employment Law

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1. a decision of the B.C.S.C., confirmed on appeal