When an employee, executive or founder develops software, technology or other intellectual property while working for a business, who owns it?

A recent Ontario Superior Court decision highlights why that question should be addressed clearly before a working relationship breaks down.

In Delivery Ease Inc. v. Tahir et al., 2026 ONSC 4558 (CanLII), the Court granted an interlocutory injunction in a dispute involving a technology start-up, its former Chief Technology Officer and the ownership and control of software used to operate the business.

Although the Court did not finally determine ownership of the intellectual property, the decision offers useful lessons for Ontario employers, employees, executives and founders about intellectual property developed during an employment relationship.

What Happened?

Delivery Ease operates a technology platform supporting pharmaceutical delivery services.

A dispute arose between the company and an individual who had been involved in the business as a co-founder and Chief Technology Officer. At the centre of the dispute was the software and source code required to operate the company’s platform.

Delivery Ease maintained that agreements had been executed assigning relevant intellectual property to the company. The Defendants disputed the company’s position and asserted, among other things, that some of the intellectual property pre-dated Delivery Ease’s incorporation.

The parties also disagreed about the nature of the individual’s relationship with the company, including his employment status.

Delivery Ease sought an urgent injunction requiring the defendants to provide the company with the source code and related software assets and preventing those assets from being exploited in a manner inconsistent with Delivery Ease’s claimed rights.

The Court granted the injunction.

Importantly, this was not a final trial determining ownership of the software. An interlocutory injunction is intended to preserve the parties’ positions until the underlying dispute can be determined.

Why the Employment Relationship Matters

The case illustrates an issue that can easily be overlooked when an employee is hired: intellectual property may become one of the most valuable assets created during the employment relationship.

That is particularly true for:

  • software developers;
  • engineers;
  • technology executives;
  • designers;
  • researchers;
  • product developers;
  • senior employees involved in innovation; and
  • founders who later become employees or executives of a corporation.

Questions can arise over whether work was created before employment, during employment, personally, through another company or as part of the employee’s assigned duties.

Those distinctions can become extremely important when the employment relationship ends.

For employers, carefully drafted employment agreements and workplace policies can help define ownership before a dispute develops.

Employees considering a new agreement should similarly understand IP provisions before signing. An employment contract review may be particularly important where the employee brings pre-existing technology, software, inventions or other proprietary material into the new role.

Written IP Assignment Clauses Can Become Critical

One of the significant features of Delivery Ease was the existence of agreements that the company relied upon as assigning intellectual property rights.

For employers, this demonstrates why intellectual-property provisions should not be treated as boilerplate.

A well-drafted agreement may address issues such as:

  • intellectual property created in the course of employment;
  • inventions and improvements;
  • software and source code;
  • copyright;
  • confidential information;
  • ownership of work product;
  • pre-existing intellectual property;
  • obligations to return company property when employment ends; and
  • continuing confidentiality obligations after departure.

For employees, broad IP provisions deserve equally careful attention.

An employee who develops software, operates a side business, conducts independent research or has created intellectual property before joining an employer should understand whether the agreement could arguably extend to that work.

The safest approach is often to identify important pre-existing intellectual property expressly in the agreement, rather than leaving ownership to be reconstructed years later.

Source Code and Access Can Become an Employment Issue

Delivery Ease also demonstrates that intellectual-property disputes are not always simply about who ultimately receives damages.

Where software is essential to operating a business, control of the source code itself can be commercially critical.

The Court was satisfied that the company had established the requirements for interlocutory relief, including a serious issue to be tried, the prospect of irreparable harm if access to the software was not restored, and a balance of convenience favouring the injunction.

That is an important practical reminder for employers.

Critical software and business information should generally not exist exclusively on an employee’s personal device, personal server or independently controlled account. Employers should consider appropriate systems governing:

  • source-code repositories;
  • administrator credentials;
  • passwords and access rights;
  • company devices;
  • backups;
  • ownership of online accounts; and
  • transition procedures when an employee leaves.

These issues can be particularly important with senior technology employees and founders.

Employees Should Not Assume Everything They Create Belongs to the Employer

The reverse is also important.

The fact that someone is an employee does not automatically answer every question about every idea, invention or piece of software they have ever developed.

Ownership can depend on the circumstances, including what was created, when it was created, the employee’s duties, the governing contractual language and whether intellectual property was expressly assigned.

Employees bringing an existing product, codebase, invention or business concept into a new employment relationship should therefore be careful about signing an agreement that broadly assigns intellectual property without understanding its potential scope.

This is another reason why employment agreements should be reviewed as a whole rather than focusing only on salary and termination provisions.

For more general information about employment agreements, see Do You Need Written Employment Contracts? A Guide for Employers.

What Employers Can Learn from the Delivery Ease case

The decision reinforces several practical lessons.

Employers whose employees develop valuable intellectual property should clearly document who owns it. Agreements should address existing IP as well as intellectual property created during employment.

Businesses should also maintain practical control over critical digital assets. Even a strong contractual claim to ownership may provide limited immediate comfort if an employee or former employee controls the only operational version of essential software.

Finally, ownership, confidentiality and return-of-property provisions should be reviewed when an employee’s responsibilities materially change—particularly when an employee becomes a senior executive, technical lead or participant in a new product or venture.

These protections can complement confidentiality and restrictive-covenant provisions. For further discussion, see Are Non-Solicitation Clauses Enforceable?.

What Employees and Executives Can Learn

Employees should understand an intellectual-property clause before signing it, particularly where they work in technology, engineering, research, design or another innovation-driven field.

Particular care may be appropriate where an employee:

  • already owns software, inventions or other intellectual property;
  • operates a side business;
  • contributes personally developed code to an employer;
  • is joining a start-up as both a founder and employee;
  • develops products outside ordinary working hours; or
  • is asked to sign a new IP assignment after beginning employment.

The fact that an agreement is presented as a routine employment contract does not mean every provision is insignificant.

The Broader Lesson

Delivery Ease Inc. v. Tahir is ultimately a cautionary example of what can happen when the employment relationship and intellectual-property ownership become intertwined.

The Court has not yet finally decided who owns the disputed intellectual property. But the fact that urgent court proceedings were required simply to determine who would control essential software while the litigation continued is itself instructive.

For both employees and employers, ownership is easier to define at the beginning of the relationship than to litigate at the end of it.

Frequently Asked Questions

Does an employer automatically own everything an employee creates?

Not necessarily. Ownership depends on the type of intellectual property, the circumstances in which it was developed, the employee’s duties and the terms of any applicable agreements. Employees and employers should not assume the answer without reviewing the specific circumstances.

Can an employment contract assign intellectual property to the employer?

Employment agreements frequently contain provisions dealing with intellectual property created during employment. The wording and scope of the particular agreement matter, especially where the employee has pre-existing intellectual property.

What if an employee created the software before joining the company?

That can significantly affect the analysis. Employees who bring existing software, inventions or other IP into a new role should consider identifying that material expressly when negotiating their employment agreement.

Why did the Court grant an injunction in Delivery Ease v. Tahir ?

The Court concluded that the legal requirements for interlocutory relief had been established, including a serious issue to be tried, potential irreparable harm and a balance of convenience favouring the order. The injunction preserved access to the software while the underlying ownership dispute continued.

Did the court decide that Delivery Ease owns the software?

No. The decision concerned an interlocutory injunction. The Court was not finally deciding the merits of the intellectual-property ownership dispute.

Should employees have IP clauses reviewed before signing?

Employees working in technology, research, engineering, design or other fields involving intellectual property may benefit from obtaining advice before agreeing to broad assignment provisions, particularly where they own existing intellectual property or maintain outside projects.

What should employers include in employment agreements concerning intellectual property?

Depending on the position, employers may consider provisions dealing with ownership and assignment of work product, confidentiality, pre-existing intellectual property, return of company property, source-code access, inventions and continuing obligations following termination.

Employees or employers dealing with questions involving employment agreements, intellectual property provisions, confidentiality obligations or the departure of a key employee can contact Pelsmakher Law for advice regarding their particular circumstances.