By Richard Stobbe

A startup in the oil-and-gas service sector sought to improve downhole well stimulation technology. After a few years, differences between the three founders culminated in the ouster of Mr. Groves, one of the founders. Mr. Groves was removed as President and then his employment was terminated. The company had, during those few years, filed for patent protection on a number of inventions which were invented by Mr. Groves. After his termination, he promptly sued his former employer based on a claim of ownership of those inventions which were created during the course of his employment.

In the recent decision in Groves v Canasonics Inc., 2015 ABQB 314 (CanLII), the court noted that the employment agreement between Mr. Groves and Canasonics included the following condition:

“The Company shall own any and all Copyright and Intellectual Property created in the course of Employment. Further, in the event there is a period when the Employee might be considered an independent contractor, all Copyright created and any Intellectual Property created shall be owned by the Company.” The Court had no trouble in concluding that the inventions were patented in the U.S. and Canada by their inventor, Mr. Groves in his capacity as an employee, who then assigned the inventions to Canasonics as the employer pursuant to terms of the employment agreement.

The lesson for business in any industry is clear: ensure that your employment agreements – and by extension, independent contractor and consulting agreements – are clear. Intellectual property and ownership of inventions should be clearly addressed. Get advice from experienced counsel to ensure that the IP legal issues are covered – including confidentiality, consideration, invention ownership, IP assignment, non-competition and non-solicitation.

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