A court has ruled that a software developer did not create his competing emissions-monitoring program in the course of his employment — dealing a setback to his former employer, Nexus Solutions, in its copyright infringement claim.
The decision offers a detailed look at how courts analyze whether an employer automatically owns software developed by an employee, focusing on whether the program was written “in the course of employment” or on personal time and initiative.
Nexus Solutions — a software firm in London, Ont., led by president J.S. — alleged that V.K. and others misused proprietary information to build a rival program designed to monitor smokestack emissions. Nexus Solutions argued it was entitled to the copyright because, in its view, V.K. created the software while working as one of its senior developers.
The company said V.K. held a position of trust, accessed confidential protocols, and used company resources to write a competing product, known as Limedas, which it called an unlawful copycat of its own “CEMView.”
‘In the course of employment…’
The Ontario Superior Court of Justice underscored that copyright in an employee’s work belongs to the employer only if it is created “under a contract of service … in the course of employment.”
According to the court, “If the author is an employee and the work was made in the course of employment by that person, the person by whom the author was employed shall … be the first owner of the copyright.” Nexus Solutions claimed V.K.’s duties at the firm included building and improving CEMS (continuous emissions monitoring software) products, making Limedas a direct outgrowth of his day-to-day responsibilities.
V.K. countered that while he was indeed a senior programmer for Nexus Solutions, he worked on Limedas on his own time, without direction or approval from the company. He acknowledged that his knowledge of CEMS and specific environmental protocols stemmed from his role at Nexus Solutions but insisted he applied those skills outside office hours.
“I do not believe my personal development of Limedas was part of my tasks at Nexus Solutions,” he testified. The court ultimately accepted that position, finding “there was no evidence that V.K. was assigned to produce this particular software.”
Emails, login data and code check-iins
In reaching its conclusion, the court pointed to emails, login data, and code check-ins that largely occurred in evenings or on weekends, which suggested V.K. was doing significant development off the employer’s clock.
Although evidence showed V.K. used some resources that overlapped with Nexus Solutions’ work —particularly to test how certain analyzers interacted with software — the court weighed this against the company’s explicit policy forbidding unapproved coding. An email from J.S. stated: “I have instructed [our developers] that they are not allowed to do any development without my knowledge.”
Nexus Solutions also argued that portions of Limedas amounted to “copying” of CEMView’s source code. However, the court found there was “no evidence of copying,” noting that an expert for the plaintiff confirmed the two programs “were dissimilar” in their file structures, algorithms, and data organization.
“Courts focus on whether a substantial part of the work was taken,” the ruling says, “and here, the similarities were limited to ideas or features found in many emissions-monitoring applications.”
Knowledge gained in employment
In a further blow to Nexus Solutions’ claims, the court pointed to the distinction between knowledge gained in employment and employer-owned intellectual property. While the judge criticized V.K. for “surreptitiously” developing a competing system and marketing it quickly to N. Solutions’ clients after he resigned, that conduct did not automatically hand ownership of the code to the firm under copyright law.
“The fact that V.K. developed software in a similar field does not mean Nexus Solutions owns it,” the decision states. “Had V.K. been instructed to write precisely this program as part of his normal duties, the outcome might have been different.”
The court acknowledged that V.K. appeared to leverage membership access and technical data from his employer, including certain protocols from its longstanding relationship with a German analyzer manufacturer. One internal email, for example, read: “I have decided to stay with [Nexus Solutions] for another 2-3 months … then we can do a demo for the Medinah project,” suggesting he was using his time in the job to pave the way for future business with integrators who might otherwise have stayed with Nexus Solutions.
Nevertheless, “there are other legal remedies to address alleged breaches of loyalty and contract,” the ruling says, “but they do not necessarily grant copyright ownership to the company.”
Ultimately, the court answered the central copyright question in the negative: Nexus Solutions did not prove that Limedas was authored under V.K.’s employment.
“This software was not created ‘in the course of his employment,’” the ruling concludes, “and no portion of Nexus Solutions’ code was copied.”
‘Surreptitious effort’
Although the court called V.K.’s actions a “surreptitious effort,” it found the company did not pay him or instruct him to develop competing software. The final point was that “employment alone does not impose an obligation to deliver up inventions or works that fall outside assigned duties.”
The decision leaves open other causes of action Nexus Solutions filed, including breach of contract, conspiracy, and alleged misuse of confidential information. Because the ruling addressed only copyright issues, questions about whether V.K. violated an implied duty of loyalty or engaged in any other unlawful behaviour remain unresolved.
For more information, see Nexus v. Krougly, 2025 ONSC 1346 (CanLII).
