Guideline: IP Ownership

A. Intellectual Property (IP) Ownership in ESDC Policy

This document guides ESDC employees on IP ownership. ESDC strives to be open and permissive with IP ownership. The goal is to encourage the private sector to commercialize IP, creating jobs and economic growth, per the federal Policy on Title to IP Arising Under Crown Procurement Contracts (“Innovation Policy”). ESDC’s IP Management Policy and IP Centre of Excellence (IPCOE) support these goals.

1. Employee-made IP: ESDC (Crown) ownership is the default

Federal and ESDC policies (8.1.1) state that all IP created by ESDC employees (including term, casual and student employees) is owned by ESDC. This is the default situation in Canadian copyright law. (An employer is the default sole legal owner of all IP produced by its genuine employee in the course of his or her duties, as per the Copyright Act.) However, to encourage commercial use of this ESDC-owned IP, the Innovation Policy and ESDC policies strongly encourage ESDC to license ESDC IP to third parties.

2. Contractor-made IP: Contractor ownership is the default

When IP is created by contractors under a procurement contract with ESDC (e.g. reports from a management consultant), the Innovation and ESDC policies (8.1.4) both say the contractor must own the IP (not ESDC), barring exceptional circumstances. This is not the default in Canadian copyright law: the Copyright Act itself explicitly gives ownership of works prepared for the Crown, to the Crown.
So that ESDC can own IP produced under procurement contracts when necessary, the Innovation policy includes specific exceptions to contractor ownership. If no existing exception applies, individual Treasury Board approval is required for ESDC to own the IP.
Two common exceptions exist at ESDC: where ESDC intends to publicly disseminate the contract deliverables (e.g. in many research and communications contracts); or where the deliverables are protected by copyright (this exception can be used broadly). All existing exceptions are in Appendix A of the Innovation policy and the required form for contracts that produce new IP. The exceptions are optional: Even if an exception applies to a contract, ESDC can still let the contractor own the IP.

3. Co-developed IP: avoid co-ownership!

The ESDC Policy (8.1.6) strongly discourages co-ownership of IP, including IP created collaboratively by ESDC employees and other persons or entities. This includes IP created under interdepartmental letters of agreement (ILAs) and memoranda of understanding (MOUs) with entities like other government departments, universities and non-profits. ESDC should push for a written agreement that identifies who will be the sole IP owner, with IP licenses to the other parties. (The standard Grants & Contributions agreement does so.)
Failing this, the permission of all co-owners would be required for licenses (in a legal sense). This would be a burden. ESDC might have to obtain the written permission of all other co-owners of the IP before ESDC could itself permit others (any non-owners) to copy, publish (e.g. on websites) or even modify or translate the materials. In this difficult scenario, something as simple as translating a document into another language would not be possible – not unless the translator were an ESDC employee! If the translator works at a different company or organization, ESDC could not give that company a license to translate the work, without separate written agreement from all co-owners. Imagine the work that could be involved!

B. Pros and Cons of the Ownership Options

In determining whether or not ESDC should own IP, you should weigh the pros and cons.

1. If ESDC owns the IP, potential pros include…

i. Integrity

IP ownership may protect ESDC from the use of sensitive program materials in a way that is confusing, misleading or false. ESDC may be more easily able to contest uses that indicate or imply third-party goods or services are in some way associated with or endorsed by ESDC.

ii. Control

IP ownership allows ESDC better control of the “who, what, where and when,” that is: who has access to the materials, what information is made available, and where and when the access is provided. ESDC does this through licensing (permissions) decisions as sole owner. ESDC itself is able to balance awareness and promotion with protecting its IP rights.

iii. Timelines

IP ownership could enable ESDC to better meet deadlines. ESDC could be better able to satisfy operational mandates. However, as noted under Licensing Burden (2i below), ESDC incurs other time investments when it chooses to own IP.

iv. Enforcing Rights

Owning IP gives ESDC authority to act to protect the IP (e.g., IP enforcement through Legal Services).

v. A note on Procurement Contracts

If ESDC owns the IP from a procurement contract, it is at maximum liberty to control that IP – staying within ESDC’s mandate and applicable laws and policies, of course. The procurement specialists can use the Innovation policy exceptions to help you identify contracts where ESDC may need to avoid the default Contractor ownership. For most procurements, though, Contractor ownership is advisable.

2. If ESDC owns the IP, potential cons include…

i. Licensing Burden

The sole owner (if there is only one owner) can issue licenses to use IP.  At ESDC, this involves a review and decision process for individual license requests: who may use the IP, and how? Each license requires sign-off by the Director General of the program responsible for the IP, per ESDC Policy (8.3.2).

ii. Enforcing IP Rights: Resources

The owner can bring a court case against IP infringers (people using the IP without a license). ESDC, as the sole owner, may therefore face pressure from third parties to pursue infringers. Such cases may be expensive. This could require large amounts of resources. Potentially, ESDC might lack the resources to enforce its IP rights.

iii. Partners (potential co-owners)

Maintaining good relationships with would-be co-owners could be a difficult hurdle. Third parties may not understand why ESDC wants IP ownership, nor why it could be in their best interest for ESDC (or another partner) to solely own co-developed IP. However, it should be possible to mitigate this with a clear explanation and negotiation of the licensed rights that these partners would still enjoy.

C. Conclusion (summary)

To be prudent, you should plan for ESDC’s needs and identify the desired sole owner for each IP product before the work or contract begins. Where any third parties are involved, it is essential to document these IP ownership decisions in a written agreement, such as the procurement contract. For procurement contracts, the norm (the default) is that the contractor should own the IP.
Considering that the co-ownership of IP is generally discouraged, IP developed under ESDC’s mandate should not be co-owned without separate discussion and review by the program Director General, the IP Centre of Excellence and Legal Services (this is also required under the ESDC IP Management Policy).

Getting Our Advice

The IPCOE is available to discuss these pros and cons, and your particular situation, in more detail.
In addition, the ESDC Procurement Team (who receives your Purchase Requisitions in myEMS) is fully able to handle IP ownership requests for IP that is part of a procurement contract. If necessary, the Procurement Team member will approach the IPCOE with questions.