Copyright Claims on Intellectual Work Property: Employee vs Employer

Technology is growing exponentially and new software can become very valuable. What happens when one of your employees creates a competing product to yours which he has access to as part of his employment?

The Ontario Court of Appeal in Nexus Solutions Inc. v. Krougly provided guidance on when an employer has a copyright claim over work created by an employee. In this case a senior software developer, Vladimir Krougly, in secret, developed a competing software program while employed by Nexus Solutions Inc. (“Nexus”). The software was not only similar to Nexus’s existing product but was a competitor. The software in issue was developed on Krougly’s own time, using his own resources, and not under the direction or with the knowledge of Nexus. After discovering the competing product, Nexus sought a declaration that it owned the copyright under s. 13(3) of the Copyright Act, which provides that in the absence of an agreement to the contrary, an employer owns the copyright for work made