Canada: Copyright and Computer Software

Last Updated: April 28 2011
Article by L.E. Trent Horne

The Federal Court of Canada's recent decision in Harmony Consulting Ltd. v. G.A. Foss Transport Ltd. 2011 FC 340 has provided valuable guidance on the acquisition and enforcement of copyright and contractual rights related to software.


In early 2000, Foss Transport wanted to update and modernize its dispatching and invoicing programs. The company entered into licensing agreements with Harmony Consulting Ltd. Under these license agreements, Foss Transport acquired rights to use certain software. Harmony was also retained to modify the software and to develop new applications. The individual who did the work for Harmony was Susil Chari.

The business relationship was initially positive and beneficial for everyone. By 2004 it had disintegrated. The business relationship terminated when Mr. Chari planted two "time bombs" in the software of the Foss Transport computer system.

After the business relationship with Harmony ended, Foss Transport made further modifications to the software. Harmony sued for copyright infringement in 2005. Foss Transport continued to use some of the software until 2007.

When the case went to trial, the issues for the Court to decide included who owned the copyright, what copyright subsisted in and whether any copyright had been infringed.

Ownership, Assignments and Registration

There was no dispute that Mr. Chari was the author of all of the software in issue. There was a significant dispute as to who was the owner of the various copyrighted works.

While an individual will own copyright in their creative works, under section 13(3) of the Copyright Act, where a work is created by an employee working in the course of their employment, absent an agreement to the contrary, the employer is the owner of the copyright.

Some of the software licensed to Foss Transport was based on an earlier program written by Mr. Chari for another customer (RCT) in 1998. At that time, Harmony did not exist; Mr. Chari was a shareholder of a small company called Atrimed Medical Supply Inc. The Court found that the 1998 business relationship was between Atrimed and RCT, and that Mr. Chari was acting as an employee of Atrimed when he wrote the relevant software. As such, Atrimed was the owner of copyright. Since Atrimed was not a plaintiff, there could be no infringement of its copyright.

To counter the risk that Atrimed may be found to be the owner of copyright, Mr. Chari signed what purported to be a retroactive assignment the week before the trial began. The Court was not impressed, finding that this was a self-serving attempt to resolve the contested ownership issues. The assignment was found to be inoperative and irrelevant.

The case demonstrates the importance of having documents in place evidencing the ownership of copyright before software is licensed or disputes arise. In the case of employees, employers are best served by having an employment agreement where the employee acknowledges and understands that any copyright is owned by the company. The presumption of ownership in section 13(3) does not apply to independent contractors. For independent contractors, it is essential to have an assignment, in writing, for all copyrighted works that are created during the retainer.

Registration of copyright is quick and easy. Unlike the United States, a sample of the work need not be filed with a Canadian application. The costs are modest. A copyright registration provides presumptions in litigation that the authorship and ownership set out in the registration are accurate. For software that is sold or licensed, a copyright registration has great value.

What is Protected by Copyright?

To qualify for copyright protection a work must have originated from the author, not be copied, and must be the product of the exercise of skill and judgment that is more than trivial.

It has long been recognized that computer software may be protected by copyright. The Harmony case provides a useful guide to the parameters of that protection.

In considering the boundaries of originality, the Court found that computer programming that is dictated by the operating system or reflects common programming practices is not original expression and will not receive copyright protection. Also, to the extent a user of software imports data into the program, the author of the software does not own copyright in the underlying data.

A significant issue in the Harmony case was ongoing modifications or fixes that were made over time. On the particular facts, the fixes were simple mechanical amendments that allowed the software to function in the manner originally intended. Many of the changes were dictated by the Microsoft Access program and functionality. As such, it was held that the fixes were not original and no copyright attached to them.

This underscores the need for a comprehensive license agreement. To the extent there are elements in a software package that cannot be protected by copyright, a license agreement can be used to restrain further use after the business relationship is concluded.

The Federal Court lacks jurisdiction to hear breach of contract matters. Given the Federal Court's inability to enforce contractual terms, it would not be surprising to see similar cases brought in the provincial courts, where copyright and contractual issues can be presented concurrently.


In brief, there is infringement where a defendant copies all or a substantial part of a copyrighted work. These rights can be separate from contractual rights in a license agreement. Harmony argued that because there was a breach of the license agreements, there must also be infringement of copyright. This argument was rejected. The court held that copyright infringement does not arise out of a breach of contract alone.

On the facts of this case, the computer equipment located at Foss Transport was a Citrix server. There was only one copy of the software on the server. Since continued use of the software did not require copies being made for individual terminals, use of the program, without more, on a Citrix server did not constitute copyright infringement. Similarly, exceeding the number of permitted users was not an infringement of copyright. This may have been a breach of the license, but that would only constitute a breach of contract.

The Court also found that opening a file, making modifications and then saving that file does not make a reproduction as defined in the Copyright Act, and was not an infringement. Decompiling was also considered. Using Microsoft Access was a means to allow a user or programmer to see the programming. The court held that there is no copyright infringement in looking at the programming.


To fully protect software and other copyrighted works, the importance of contemporaneous assignment documents cannot be understated. A copyright registration is a prudent step in many cases for software and other creative works that are commercialized. A well-drafted license should be used when commercializing software to create contractual rights, since copyright may not automatically apply to all software updates and uses.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

L.E. Trent Horne
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions