Canada: Do You Actually Own The IP Generated By Your Canadian Employees?

Employees are the source of some of their employer's most valuable intangible assets, that is, intellectual property assets. In this context, it is paramount for businesses to ensure that they own the intellectual property assets generated by their employees. In Canada, the rules that apply to employer-employee relationships vary greatly between copyright, patents and industrial designs. Any business having employees in Canada should be aware of these unique rules and, to avoid any uncertainty, put in place contracts including the appropriate clauses pertaining to the transfer of intellectual property rights.


While copyright is often mistakenly perceived as being limited to "artistic" works, such as paintings, music and film, copyright protection can extend to a much broader scope of works which can be extremely valuable for businesses, including logos, catalogs, software source code, the content of websites, graphic user interfaces, architectural works, etc.

In Canada, the general rule is that the author is the first owner of the copyright in his work. However, section 13(3) of the Copyright Act provides for an important exception: if the work is created in the course of employment under a contract of service, and absent any agreement to the contrary, the employer will be the owner of the copyright in the work created by the employee without the need for a formal assignment. Businesses should therefore be mindful of the three conditions that must be met in order to trigger that exception.

First, an employment relationship in the form of a contract of services (as opposed to a contract for services) is required between the employer and author. A more "traditional" employer-employee relationship with the author will usually indicate that the latter is bound by a contract of services required by section 13(3). On the other hand, courts will conclude the existence of a contract for services, which does not meet the requirement of section 13(3), where the author's status is more akin to that of an independent consultant.

Second, the author must have created the work during the course of his employment. This is relatively straightforward to assess and, while the courts will consider various factors, one must essentially determine whether the work was created under the employer's instructions and using its resources (e.g. equipment, confidential information, etc.) or during the author's own free time by using his own resources. It is important to note that even if a work is created during the author's free time and at his own initiative, ownership of copyright in the work could still vest in the employer if it was part of the employee's duties to use his creative skills to create that type of work for the benefit of his employer.

Third, there must be no agreement providing that the employee retains ownership of copyright in the works created in the course of his employment. Unlike assignments, which under Canadian copyright law must be in writing, such an "agreement to the contrary" does not need to be in writing and in certain circumstances could even be presumed, such as in the academic context where professors will usually retain ownership of the copyright in their work despite their employment relationship.

A final concern relates to the author's moral rights, which is an important yet somewhat unique consideration in Canada. Moral rights include the author's right to maintain the integrity of the work and the right to be cited as its author. Even if the employer is to be the owner of the copyright in its employee's work pursuant to the employment exception or by contract, the author's moral rights in his work cannot be assigned and would not automatically be waived such that it is preferable for an employment contract to provide for such a waiver.


Unlike the Copyright Act, the Patent Act does not include specific provisions addressing the ownership of patent rights in inventions made during the course of employment. The applicable principles were therefore developed by the courts and the general rule is essentially the opposite of that applicable to copyright. The employee will, as a general rule, retain ownership of the patent rights in his inventions. The employer can nevertheless benefit from two exceptions to that rule: the employer will be entitled to the patent rights in the invention of an employee if the employer has an express agreement to that effect with the employee, or if the employee was "hired to invent".

In order to determine if an employee was "hired to invent", the Federal Court will consider eight factors, namely whether:

  • the employee was hired expressly for the purpose of inventing;
  • the employee had previously made inventions;
  • the employer put in place incentive plans to encourage inventions;
  • the conduct of the employee following the invention's creation suggests that the employer is the owner;
  • the invention is the product of the employee being instructed to solve a specific problem;
  • the employee sought help from the employer in the making of the invention;
  • the employee was dealing with confidential information; and
  • it was a term of the employee's employment that he could not use, to his advantage, ideas which he developed.

On the other hand, provincial courts, who also have jurisdiction over patent ownership cases, will not always apply the above factors and will instead follow the more general approach of determining what the employee was hired to do and whether the invention was created while performing that task, in which case the patent rights in the invention will belong to the employer.

Given the uncertainty that is inherent to applying these different and evolving factors arising from case law, there is a strong incentive for employers to enter into a formal agreement with their employees providing that all their inventions will belong to the employer, regardless of whether or not they were hired to invent. This approach not only clarifies the situation of employees directly or indirectly working in research and development, but will also ensure that the employer owns the rights in inventions that could eventually, and sometimes unexpectedly, originate from other employees. 

Industrial Designs

Much like the Copyright Act, Section 12(1) of Canada's Industrial Design Act includes a specific provision providing that the first owner of a design is its author, unless the design was executed for another in exchange for good and valuable consideration, in which case that person becomes the first owner. It should be noted that unlike the Copyright Act, the Industrial Design Act does not specifically require an employment relationship for this exception to apply.

Given that very few industrial design cases are litigated in Canada, there is only limited case law on this issue and the few relevant cases are somewhat dated. Nevertheless, jurisprudence suggests that an employee's salary will qualify as good and valuable consideration such that industrial designs developed in the course of employment will be owned by the employer. It remains unclear whether the creation of industrial designs needs to be part of the employee's duties for this rule to apply (i.e. whether the salary has to be linked to the creation of the design for it to qualify as good and valuable consideration). This rule applies equally to employees and freelancers, but as with other types of intellectual property, a formal agreement that industrial designs developed by the employee are owned by the employer is recommended to avoid uncertainty.


Considering that these rules vary greatly based on the type of intellectual property right involved, the fact that the tests are often imprecise and can give rise to protracted debates (e.g.: "hired to invent" what exactly? where does the course of employment begin and end?) and that in some fields of activities the same employees can create different types of intellectual property assets, it is in the interest of businesses having employees in Canada to have a formal written agreement with their employees.

The exact content and form of such an agreement will depend on the specific circumstances of each case, but will usually provide that the business, as employer, owns the rights in any work, invention or design created by its Canadian employees, that said employees will cooperate with the employer to protect or register those rights, and that the employees waive their moral rights in their works, if applicable.

For further information, please contact a member of our firm's IP Management & Strategic Counselling group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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.

Jean-Sébastien Dupont
Similar Articles
Relevancy Powered by MondaqAI
Lindsay Kenney LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Lindsay Kenney LLP
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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