If you're bidding on federal government contracts, you need to understand who will own what you create. Many suppliers assume the Crown automatically takes ownership of all intellectual property developed under contract, but that's not quite how it works. The reality is more nuanced—and more negotiable than you might think.
How It Works
The Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts establishes a four-step decision process for determining IP ownership. Here's the thing: the default position actually favours contractors. You retain ownership of "Foreground IP"—the intellectual property created under the contract—unless the Crown invokes specific exceptions listed in Appendix A of the Policy or obtains a Treasury Board exemption.
When does the Crown take ownership? Only when its intended use requires it. The Implementation Guide walks contracting authorities through a decision tree to assess whether Crown ownership is justified based on factors like commercial exploitation potential and operational requirements. Even when you retain ownership, you'll typically grant the Crown a perpetual, non-exclusive, royalty-free licence for government purposes—which means departments like PSPC, DND, or SSC can use your work internally without additional payment, but they can't turn around and commercialize it.
In practice, IP terms get addressed through standard clauses in PSPC's SACC Manual or department-specific provisions. For contracts valued above $10,000, the Crown must report all IP ownership decisions—whether Crown-owned or contractor-owned. This isn't just paperwork. It creates accountability and ensures contracting authorities have to justify why they need ownership rather than just a licence to use.
Key Considerations
- Negotiate early or accept the terms. Once a solicitation closes, your ability to negotiate IP provisions drops dramatically. Review draft contract terms during the question period and flag concerns about IP rights and licensing before you submit.
- Background IP stays yours. The Policy draws a clear line between Foreground IP (created under contract) and Background IP (pre-existing knowledge you bring to the table). You're not required to assign your existing intellectual property, but you may need to grant the Crown a licence to use it if it's embedded in deliverables.
- Crown ownership doesn't mean perpetual secrecy. Under the Copyright Act, copyright assignments must be registered. When the Crown owns IP, it becomes subject to access to information requests and may be shared with other government entities or even published.
- Subcontractor IP isn't covered by this Policy. You're responsible for ensuring your subcontractors assign necessary rights to you. The Policy only governs the relationship between Crown entities and prime contractors—so any gaps in your supply chain are your problem to solve.
Related Terms
Security Requirements and Clearances, SACC Clauses
Sources
- Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts - Treasury Board Secretariat
- Implementation Guide: Policy on Title to Intellectual Property - Innovation, Science and Economic Development Canada
- Government of Canada Supply Manual - Public Services and Procurement Canada
Bottom line: don't assume the government will take everything you create. Understand the Policy framework, review contract clauses carefully, and raise IP concerns during procurement—not after award.