IP Assignment Agreement

An IP assignment agreement moves ownership of intellectual property from the person who created or holds it to someone else, usually the company that will use and commercialize it. It can be a standalone document or a clause inside a founder, employment or contractor agreement, and it can cover existing and future work.

An assignment transfers ownership, so the company can register, enforce, license and sell the asset. A licence agreement only grants permission to use IP that someone else keeps owning. Section 13(4) of the Copyright Act allows partial assignments, limited by territory, medium, market sector or time, so the wording decides how much moves.

A typical agreement covers:

• copyright in source code, documentation, designs, photographs, website content and marketing material
• inventions, improvements and any patent rights in them
• brand names, logos and domain names a founder registered personally, with the related goodwill
• confidential information and know-how, including trade secrets

Under section 13(1) of the Copyright Act, the author of a work is its first owner. Section 13(3) creates the main exception: where the author is employed under a contract of service and makes the work in the course of that employment, the employer is the first owner, in the absence of any agreement to the contrary. Section 13(4) then makes an assignment of copyright valid only if it is in writing and signed by the owner of the right or the owner's authorized agent. Our guide to copyright in Canada for business owners explains these defaults; an assignment agreement is the document that changes them.

Those rules leave four common gaps:

• Contractors. A freelancer, agency or consultant works under a contract for services, so section 13(3) does not apply and paying the invoice does not transfer copyright. Whether someone is legally an employee or an independent contractor can decide who owns the work.
• Founders. Code, designs and brand work created before incorporation belong to the individual founders until they assign them to the corporation.
• Employees working outside their role. The employer default reaches only work made in the course of employment, a limit the Court of Appeal for Ontario clarified in 2026.
• Inventions. The Patent Act has no equivalent of section 13(3). As a general rule, an employee owns an invention unless they were hired to invent or agreed to assign it.

In Nexus Solutions Inc. v. Krougly, 2026 ONCA 199, released March 19, 2026, the employee was a senior developer at a London, Ontario software company whose primary responsibility was writing code for its emissions-monitoring product. While still employed, he secretly built a competing product, mostly outside business hours and without using company property, although he had been told his job was limited to the existing product. He had no written employment contract, and no agreement dealt with ownership of his work.

The trial judge held that the competing software was not made in the course of employment, and the Court of Appeal dismissed the employer's appeal. That an employer could have required a task is necessary but not sufficient; what counts is the employee's actual, not potential, responsibilities. The overriding question is whether making the work was something the employee was asked or expected to do, expressly or by necessary implication, as part of the job. Working hours, equipment, direction and whether the employer funded the work and carried its risk all bear on that question. The court contrasted Corso v. Nebs Business Products (2009), where the employer owned secretly written software because developing new products was part of the employee's role.

Two points matter for drafting. The court confirmed that an employer and employee can agree on a different framework for ownership, which then governs instead of the default rule. It also noted that the employer's lack of awareness and the competitive nature of the work do not decide copyright, although they may support separate claims for breach of contract or the duty of loyalty. An employment agreement that defines which works the company owns, such as anything relating to the business or made with company time, equipment or confidential information, can close the gap the case exposed.

• Writing and signature. An oral understanding or an unsigned draft does not transfer copyright under section 13(4). The signature that matters is the owner's, meaning the person giving up the rights.
• Words of present assignment. Wording such as "hereby assigns" transfers existing work on signing. For later work, the agreement adds an obligation to assign and a further-assurances clause requiring the creator to sign confirmatory documents.
• Defined scope. The assigned IP is tied to the business, the engagement or company resources, with a schedule of prior IP the creator keeps and, where needed, a licence of that prior IP to the company.
• Moral rights waiver. Moral rights cannot be assigned and stay with the individual author even when an employer owns the copyright, so the creator waives them instead; see moral rights waiver.
• Consideration. A new hire or new engagement supplies it. An existing employee asked to sign new terms should receive something new, such as a payment, raise or option grant, because the Court of Appeal for Ontario held in Hobbs v. TDI Canada Ltd. (2004) that continued employment alone did not support new terms.
• Disclosure and cooperation. Inventors disclose inventions and help with patent and registration filings, often backed by a limited power of attorney.

Lamba Law's independent contractor agreement template lets a company choose an IP clause assigning all of the contractor's work product to it, together with confidentiality terms.

Founders. A founder assignment is usually signed at incorporation, alongside the share subscription and vesting terms, so that a co-founder who leaves early does not walk away still owning part of the product or a domain registered in their own name. Our founder agreements and vesting work covers both.

Financings. Investors' counsel ask for signed assignments from every founder, employee and contractor whose work is in the product. A missing signature becomes a closing condition or a special indemnity.

Business sales. In a share purchase the corporation keeps whatever it already owns, so the buyer traces the chain of title back to each creator. In an asset purchase agreement, the seller assigns the IP to the buyer, who still needs proof the seller owned it. IP due diligence focuses on contractor and pre-incorporation work.

AI-assisted work. Assignments should address output created with AI tools and the terms of those tools, because copyright in output without meaningful human authorship is uncertain in Canada; see AI and intellectual property in Canada.

Priyanka Sethi and Callum Hollis co-founded a scheduling-software company in Mississauga in 2024. Before incorporating, Callum wrote the first booking engine on his own laptop. The company then paid a freelance developer, Diego Ibarra, $38,000 over eight months to build its mobile app under an emailed quote with no written terms. Its only employee, designer Ji-woo Han, was hired to design the user interface under an offer letter that says nothing about IP.

In 2026 a seed investor agreed to lead a $1.2 million round. Diligence found three gaps: Callum had never assigned his pre-incorporation code, Diego still owned the copyright in the app, and Ji-woo had built an internal analytics dashboard on weekends that the founders now wanted to sell. Her interface work was part of her assigned duties, so the company likely owns it under section 13(3), but after Nexus the dashboard was doubtful.

The company's lawyer prepared a founder assignment from Callum, a confirmatory assignment and moral rights waiver from Diego, who signed for a $4,000 payment, and a new IP and confidentiality agreement for Ji-woo, supported by a stock option grant, that expressly assigned the dashboard and waived her moral rights. The round closed three weeks later than planned, without a special indemnity.