Who Owns the Software or Ideas You Create at Work in Ontario?

What is the default rule on who owns what you create at work?

Start with copyright, because it covers most of what modern employees create: software code, reports, designs, spreadsheets, training materials, marketing copy. Section 13(3) of the Copyright Act says that where a work is made in the course of employment under a contract of service, the employer is the first owner of the copyright, unless there is an agreement to the contrary. So even with no written contract at all, the code you write as part of your job belongs to your employer.

Two important wrinkles cut the other way. First, moral rights (the right to be associated with your work and to protect its integrity) always stay with you as the author. They cannot be assigned to your employer; they can only be waived, and only if you actually agreed to waive them. Second, the copyright default applies to employees, not independent contractors. A true contractor is the first owner of what they create unless they signed an assignment. If you have been labelled a contractor, that label cuts both ways, and it is worth reading our guide on contractor misclassification.

Inventions and patents run on a different track. The Patent Act has no equivalent of s. 13(3). At common law, the starting presumption is that an employee owns their own inventions, unless they were specifically hired to invent or they signed an express assignment agreement. That is why technology employers push invention-assignment clauses so hard: without one, their claim to an employee's invention is much weaker than most employees assume.

What does 'in the course of employment' actually mean?

This phrase does the heavy lifting, and it is narrower than employers like to suggest. Courts look at the whole picture. Run your situation through these factors:

• Was creating this kind of work part of what you were hired to do? A developer writing the company's product code is squarely inside; an accountant who codes a game at night is not.
• Was it made on work time? Work done during paid hours points to the employer; evenings and weekends point to you.
• Whose equipment, accounts, and resources were used? Employer laptop, employer repositories, employer cloud accounts, and employer data all pull the work toward the employer.
• Was it directed, requested, or supervised by the employer? Work assigned by a manager is in the course of employment even if you did some of it at home.
• Does it use or build on the employer's confidential information? Code, datasets, client lists, or internal know-how imported into a personal project can taint the whole project.
• Is it connected to the employer's business or your role in it? The closer the project sits to what your employer sells and what you do for them, the stronger their claim.

No single factor decides it. But if the honest answers mostly point away from the employer, the s. 13(3) default likely never engages, and the work is presumptively yours. These cases are fact fights first and contract fights second.

Is your side project safe if you built it on your own time?

Usually, yes. There is a practical safe harbour for side projects, and you can build it deliberately. Keep the project on your own time, on your own devices and accounts, funded by you, unrelated to your job duties, and completely free of your employer's code, data, and confidential information. A project that checks all of those boxes is very difficult for an employer to claim, even with aggressive contract language.

The risk zones are the boundaries. Using your work laptop 'just once' to push code, testing your app on company infrastructure, or building a tool that competes with your employer or solves the exact problem you were hired to solve all give an employer arguments they would not otherwise have. And ownership is only one dimension of side-hustle risk: even a project you clearly own can create a conflict-of-interest or dedication-of-effort problem under your employment contract. We cover that side of it in fired for a second job or moonlighting.

Can an IP-assignment clause in your contract take everything you create?

Employers often draft IP clauses to grab everything: anything you create during the term of employment, whether or not on work time, whether or not related to the business. Signed at the moment of hiring, a clear assignment clause is generally enforceable as to work connected with your employment, and it can validly extend the employer's reach beyond the s. 13(3) default. That is exactly why the clause exists.

But breadth is also a weakness. A clause that purports to capture inventions and works that have nothing to do with the employer's business, created entirely on your own time and resources, is vulnerable to being read down or challenged as an unreasonable overreach, and courts interpret ambiguity in employer-drafted contracts against the employer. Moral rights, again, cannot be assigned at all, only waived in clear terms. And no clause transfers what it does not cover: read the actual words. Many 'everything' clauses, read carefully, still hinge on a connection to the employer's business or your duties. This is the same lesson Ontario employees learned with restrictive covenants, where courts routinely refuse to enforce overreaching terms, as we explain in are non-compete agreements enforceable in Ontario.

Does an IP clause you signed mid-employment actually bind you?

This is where many employer IP claims quietly fall apart. In Ontario, a new contractual obligation imposed on an existing employee needs fresh consideration: something new of value flowing to the employee, like a raise, a promotion, a signing payment, or a real new benefit. Simply keeping the job you already had is generally not enough. If your employer slid an 'employee technology agreement' or IP-assignment addendum across the desk two years into your employment and gave you nothing for signing it, that document may not be worth much.

The leading Ontario case is Techform Products Ltd. v. Wolda, 2001 CanLII 8604 (ON CA), an Ontario Court of Appeal decision about exactly this: an invention-assignment agreement signed mid-relationship by an inventor already working for the company. The trial judge found the agreement failed for lack of consideration. The Court of Appeal ultimately upheld the agreement, but only because on those facts the company had genuinely given something up: it forbore from ending the relationship for a meaningful period after the agreement was signed, and the signer understood that refusing meant the relationship would end. Techform is a narrow path for employers, not a general escape hatch. Where the employer never actually intended or communicated anything of the kind, and just kept everything the same after collecting a signature, the fresh-consideration problem remains. We break down the whole doctrine in do you have to sign a new employment contract.

What happens to your IP claims when you are terminated?

Ownership is fixed when the work is created. Getting fired does not transfer anything by itself: what was yours stays yours, and what was the employer's stays theirs. But termination is the moment these questions get locked in, for two reasons.

First, the severance release. Employers almost always condition a severance package on signing a full and final release, and those releases frequently include IP language: a confirmation that everything you created belongs to the employer, an assignment of anything that arguably does not, a waiver of moral rights, and broad confidentiality terms. If you have a side project, a personal tool, or an invention anywhere near your former job, signing that release without reading the IP clauses can hand over things the employer never owned. Second, departing employees who plan to compete face a separate layer of duties around confidential information and, for senior people, fiduciary obligations; taking code or data on the way out is the fastest way to turn a defensible position into a lawsuit. See what you can and cannot do when competing after leaving and should you sign a severance release before you sign anything.

How do you protect a side hustle before and after termination?

1. 1.Read your contract now, not later. Find every clause touching intellectual property, inventions, moral rights, moonlighting, and conflicts of interest, and note when you signed it and what, if anything, you got for signing.
2. 2.Build clean. Own time, own devices, own accounts, own money. Never use employer code, data, credentials, or confidential information, and keep the project out of your employer's product space if you can.
3. 3.Keep dated records. Commits, drafts, receipts, and registration dates in your own name are the evidence that establishes what you built and when, independent of anything the employer controls.
4. 4.Do not sign mid-employment IP addendums reflexively. Ask what you are getting in return, and get advice before signing; a clause signed for nothing may be challengeable, but not signing is cleaner than litigating.
5. 5.On termination, get the release reviewed before signing. Have an employment lawyer check both the severance number and the IP, confidentiality, and release language, because both are negotiable.

If you have been terminated and the exit package includes IP assignment or confirmation language, treat it as part of the negotiation, not boilerplate. The same review that checks whether your severance package is fair should check what rights you are signing away with it. Our free severance review looks at both: the money on the table and the terms buried under it.

About the Author

Priya Sharma

Legal Writer, Mirza Law

Priya Sharma is a legal writer at Mirza Law in Toronto. She writes about wrongful dismissal, workplace rights, and what Ontario employees can do when they are treated unfairly.

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