Entrepreneurs need to understand that in Canada, there is no presumption of favour to the employer when it comes to ownership of intellectual property (IP). To retain ownership rights over IP generated by their employees, Canadian employers must indicate with an explicit clause in the employment contract that IP developed while working at the company is the company’s property.
In the absence of such a clause, the courts apply a test that asks the following questions:
If an independent contractor creates an invention while fulfilling a contract with an employer, the ownership of the invention will default to the employer, unless the invention falls outside of the scope of the agreed-upon contract. It is therefore important to craft independent contractor contracts carefully to take IP ownership into account.
Employers have three tools they can implement to protect sensitive information and inventions from being misused by employees:
In the case where an employee may have inappropriately disclosed a trade secret, the courts will examine the following in order to establish wrongdoing:
Codjoe, Esi A. (2009, May 4). Establishing Intent to Control; Intellectual Property in the Employment Context. Ontario Bar Association Continuing Legal Education.