Nexus Solutions v. Krougly: Copyright Ownership in the Course of Employment

It’s common for employers to assume that anything an employee develops while employed is automatically owned by the company.

A recent decision of the Ontario Court of Appeal is a timely reminder that this isn’t always the case.

In Nexus Solutions Inc. v. Krougly, 2026 ONCA 199, the Court confirmed that the Copyright Act’s presumption of employer ownership applies only when three conditions are met:

1) the creator is an employee,
2) the work is created in the course of employment, and
3) there is no agreement stating otherwise.

In this case, a developer secretly built competing software during his last two years at Nexus, later resigning and attempting to commercialize it. Nexus sought a declaration that it owned the copyright.

The Court found that the software fell outside the scope of employment. The employee wasn’t assigned to develop new software, built the product on his own time, used his own equipment, and Nexus neither funded the product nor assumed any risk. As a result, copyright vested with the employee.

Takeaway: Clear employment agreements and explicit IP assignment clauses remain the most reliable way to secure ownership of employee‑created works.

If you’re an employer, now is the time to review your employment agreements. A short conversation with our team can prevent future uncertainty around copyright ownership.

#CopyrightLaw #EmploymentLaw #IPLaw