Contractual Options for Ownership of Intellectual Property

In Canadian federal procurement, contractual options for ownership of intellectual property are the choices a contract can make about who owns the IP created while the work is performed. That newly created IP is called foreground intellectual property. The main question is whether the contractor or Canada owns it. A third outcome applies where no IP is expected, and the contract then carries no IP terms.

The term appears in the Government of Canada's Procurement Community Competencies, where it is listed as a knowledge area under intellectual property. CanadaBuys sets out the specific options as Public Services and Procurement Canada (PSPC) guidance. The sections below explain how those options work, so that suppliers can read the IP provisions of a solicitation with confidence.

The two ownership positions: contractor or Canada

Every option comes down to who holds title to foreground IP. Under the first, the contractor owns it. Under the second, Canada owns it. CanadaBuys states that Canada's default position is generally to let contractors keep the IP generated under government contracts, because the private sector is considered better positioned to commercialize new ideas.

The competency is listed by the Treasury Board Secretariat in the Procurement Community Competencies. Federal procurement officers are expected to know these options, so they shape how solicitations are drafted.

Defaults and alternatives by procurement type

CanadaBuys matches the default and the alternative to the type of procurement:

• Research and development: the contractor owns the IP by default. Canada owning the IP is the alternative.
• Goods with associated R&D: the contractor owns the IP by default. Canada owning the IP is the alternative.
• Goods with no R&D expected: Canada owns the copyright by default. The alternative is that the contractor owns the IP, including copyright.
• Services with no R&D expected: Canada owns the copyright by default. The alternative is that the contractor owns the IP, including copyright.

These options are published in the CanadaBuys guidance on intellectual property and copyright.

No IP terms and the Advance Contract Award Notice

Where the client confirms that no IP will be created or required, a contract for goods or services with no R&D expected may contain no IP terms at all. That is the third option.

Where IP will be created, the choice must be visible before award. Procurement guidance in the Supply Manual annexes says an Advance Contract Award Notice should state whether foreground IP will vest in the contractor or in Canada. Where Canada keeps ownership, the notice should also identify the applicable policy exception.

How NATO frames the same choice

Suppliers who also pursue NATO work will see the same concept under different wording. NATO's procurement policy says solicitations and contracts involving IP development, licensing or transfer must define the arrangements for access, usage and ownership. It states that contractor background IP normally remains with the contractor. Full ownership of foreground IP may be prioritized where NATO needs control, flexibility and autonomy.

What it means for a supplier bidding on Canadian public contracts

Treat the IP provisions as a core part of the bid, not as boilerplate. Before you submit, work through these points:

• Identify whether the solicitation assigns foreground IP to Canada, leaves it with the contractor, or grants specified licensing rights.
• Identify the background IP you are bringing to the work and confirm that the proposed ownership and licence terms are workable.
• Confirm that employees, subcontractors and other contributors have assigned the necessary rights to your company.
• Price and qualify the bid consistently with the ownership, assignment, licence, access and disclosure obligations the solicitation requires.
• Comply with the final IP clauses in the resulting contract.

The ownership framework is consistent, but the clauses differ from one solicitation to the next. Always read the specific IP terms in each one.