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
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