Does an Employer Own the Rights to Everything Their Employees Create? Nope.

Dan Wilband, BCL/JD, MA

In Nexus Solutions Inc. v. Krougly, 2026 ONCA 199, the Ontario Court of Appeal considered the question of ownership of intellectual property generated during an employment relationship but not strictly “at work”. The story goes like this:

An employee secretly built a competing product on his own time.

The court said the employer owned none of it.

And on appeal, the court was right.

Under the Copyright Act, an employer holds copyright in works created by an employee “in the course of” employment. But that phrase does not mean whatever the employer could have assigned to the employee. It means what the employee was actually asked or expected to do.

The developer here spent years quietly building a rival software platform, on his own time, on his own equipment, without direction from anyone at the company. The employer argued that because the work fell within the general class of things the developer was hired to do, the copyright belonged to them.

The court rejected that framing completely.

The key question was not the employee’s capability. It was his responsibility. Was the employee actually assigned this work, expressly or by necessary implication? If the answer is no, the work belongs to the employee, even if the result feels deeply unfair.

The trial judge acknowledged this was a harsh outcome, but it was necessary given his findings:

There was no written employment agreement. No clause restricting outside projects. No provision allocating ownership of anything the developer might create, whether on company time or his own. A single, well-drafted contract could have changed the outcome of this case entirely.

If your developers, designers, or other creative employees do not have written agreements that clearly define their responsibilities and address ownership of their work, this case is worth sitting with.

Without a clear agreement, you are left hoping the law fills the gaps.

As this case shows, it may not.

Nexus Solutions Inc. v. Krougly, 2026 ONCA 199