Motion for Declaration of Software Ownership Dismissed

Justice G. Dow, in One Street Digital Inc. v. Berkeley Payment Solutions Inc., dismissed a motion brought by OSD seeking to have it declared the owner of software that it provided to BPS as part of a consulting agreement. OSD also sought to restrain BPS from using or altering the software and source code.

The consulting agreement enabled BPS to offer pre-paid credit cards though a website. OSD was to be paid fees and royalties for each card sold. Upon termination, each other’s “property” was to be returned. BPS had ownership of the Deliverables, “excepting Consultant [OSD] property developed independently by Consultant and incorporated into deliverables as libraries, foundation classes and suchlike”. OSD argued that there was no copyright to what it sought to recover, and that the “foundation software platform” it created was “partitioned out”, in addition to the open-source framework code. However, OSD did not provide evidence of the exact nature of its product.

Both parties agreed that removing what OSD sought to have returned and stopping BPS from using it would shut down the ongoing business activity. The Court noted that this would have the effect of limiting or ending OSD’s claim for ongoing damages in unpaid license fees which it seeks to proceed with at the trial. BPS argued that the claim was comparable to that of copyright and the OSD needs to establish authorship of its original work.

The Court held that “the failure to tender evidence to precisely identify the property OSD seeks to have a declaration of ownership granted and stop its ongoing use results in the relief sought not being available”. The relief sought was comparable to obtaining injunctive relief and the Court considered the appropriate test. The Court determined that there are issues of ongoing rights to licensing and/or maintenance fees as well as the value of the intellectual property or computer programing which can be assessed as damages, and therefore injunctive relief ought not to be available. The Court held:

[14] In my view, in the absence of clear evidence presented by OSD of what the exact non-copyrighted foundation platform program is that it seeks to be declared owner of and stop BPS from using, this motion must be dismissed and is better dealt with in combination with the issues remaining for trial.

A copy of the Reasons for Decision can be found here.