Whose Line Of Code Is It Anyways? Copyright Ownership In Ontario Employee’s Secretly Developed Competitive Software

On March 19, 2026, the Ontario Court of Appeal issued its decision in Nexus Solutions Inc. v. Krougly, 2026 ONCA 199, dismissing Nexus Solutions Inc.’s (Nexus’) appeal from an Ontario Superior Court of Justice decision finding that Nexus’ employee (Krougly) retained copyright in software he secretly developed while employed at Nexus.

Nexus develops and markets a continuous emissions monitoring system software product known as CEMView. Krougly, a senior software developer employed by Nexus, was responsible for developing source code for CEMView. While employed at Nexus, Krougly secretly developed a competing software product, Limedas, which performed a similar function to CEMView. After resigning from Nexus in 2011, Krougly attempted to commercialize Limedas, including marketing it to Nexus customers.

Nexus sought a declaration that it owned the copyright in Limedas under s. 13(3) of the Copyright Act, which provides that an employer is the first owner of copyright in works made by an employee “in the course of … employment.” The trial judge rejected this claim, finding that Limedas was in fact not created in the course of Krougly’s employment. Rather, the trial judge found that Krougly was directed only to develop Nexus’ existing CEMView software and was instructed not to undertake any unauthorized software development.

The Court of Appeal upheld the lower court’s decision. The Court found that whether a work is created “in the course of… employment” depends on whether an employer has actually assigned responsibility to the employee to carry out the task and does not depend on the employee’s potential responsibilities. In this case, Krougly was not given a broad or expansive mandate to innovate and develop new software, and in fact was explicitly told not to do so. The Court also noted that Krougly developed Limedas almost entirely on his own time, using his own equipment, without Nexus expending any resources or assuming any risk.

Finding no reviewable error, the Court dismissed the appeal.

Summary By: Claire Bettio