The co-founder who held the only keys
A startup's software lived in repositories that only one person could open. That person was a co-founder, a director, a 25 percent shareholder, and the Chief Technology Officer. When the relationship broke down, the company could not get at its own platform.
In DeliveryEase Inc v Tahir, 2026 ONSC 4558, the Ontario Superior Court of Justice ordered him to hand over access pending trial. The reasons are worth reading for anyone who founds, funds or litigates over a technology company.
What happened
The plaintiff provides pharmaceutical delivery services through a web portal and a mobile application. It was incorporated in July 2023 with four equal shareholders (at paras 1–3). The defendant co-founder built the platform, in part through his own company, of which he was the sole shareholder.
In the fall of 2024 the plaintiff needed new investment, and the investors wanted ownership of the software put in writing (at para 28). The co-founder drafted and signed an assignment agreement on behalf of his company on or about October 1, 2024, with an effective date of July 7, 2023 (at paras 29, 40).
By 2026 the parties were at an impasse. The co-founder was the only person with credentials to the source code, which was stored with third-party hosting services (at paras 72–73, 76). The plaintiff's evidence was that a single customer accounted for about 85 percent of its revenue, and that it had missed a deadline for a feature that customer required (at para 76).
The defendants' position was that the platform existed before the plaintiff was incorporated and belonged to the co-founder's company, and that the assignment was signed under pressure (at para 9).
What the court decided
The court applied the three-part test for an interlocutory injunction (RJR-MacDonald Inc v Canada (Attorney General), [1994] 1 SCR 311) and granted the order.
Serious issue. There was a serious issue to be tried on ownership, on two independent footings: the assignment, and the co-founder's status as an employee (at para 26).
Irreparable harm. The plaintiff was at risk of losing its business without access to the software (at paras 73, 81).
Balance of convenience. If the defendants succeed at trial, their claim to the intellectual property can be compensated in damages. The plaintiff's loss of its business could not be (at paras 63, 88).
The order prohibits the defendants from using or restricting access to the software, and requires them to deliver all credentials and transfer administrative control of the repositories, accounts and domains to the plaintiff.
Five points worth taking from it
1. An assignment needs only the assignor's signature
Subsection 13(4) of the Copyright Act, RSC 1985, c C-42, requires that an assignment be in writing and signed by the owner of the right. The court noted that there is no requirement for the assignee to sign (at para 32).
It drew on Tremblay v Orio Canada Inc, 2013 FCA 225, where the Federal Court of Appeal held an assignor to a clause he had drafted himself (at para 37). An assignor who writes the document will have difficulty saying later that it did not mean what it says.
2. What you say afterward counts
The court relied on the co-founder's own statements after signing: an email confirming that the plaintiff owned the software, a letter from his lawyer to the same effect, and his acknowledgment that he had referred to the software in business correspondence as the company's intellectual property (at para 38).
The allegation of pressure did not gain traction at this stage. The court found it unparticularized, and noted that he had not protested at the time, had drafted the document himself, and took no steps to avoid it for well over a year (at paras 43, 51–54).
3. Pleadings admissions can decide the point
On the motion, the co-founder said he was an independent contractor. His statement of defence had admitted a paragraph of the claim describing him as an employee (at paras 58–60). That brought in subsection 13(3) of the Copyright Act, under which an employer is the first owner of copyright in works made in the course of employment (at para 61).
A general admission of several paragraphs of a claim deserves a careful read before it is filed.
4. The threshold question
The order requires the defendants to take positive steps: deliver credentials, transfer control, update recovery contacts. That is mandatory relief in substance.
The Supreme Court of Canada has held that an applicant for a mandatory interlocutory injunction must show a strong prima facie case, and not merely a serious issue to be tried (R v Canadian Broadcasting Corp, 2018 SCC 5). The reasons in DeliveryEase apply the serious issue standard and do not refer to the higher threshold.
Given the admissions the court recorded, the result may well have been the same on either standard. A party seeking a similar order should still prepare its evidence to meet the higher one.
5. Control of the credentials was the leverage
The legal dispute is about ownership. The practical dispute was about access. The plaintiff's evidence was that access had been offered in exchange for a buyout of the co-founder's shares (at para 12).
A company whose only copy of its product sits in accounts controlled by one person has given that person a veto over the business, whatever the assignment says.
What the decision does not do
It is an interlocutory ruling. The court said repeatedly that its observations do not bind the judge who hears the case on the merits (at paras 41, 47, 65). Whether the assignment covers software that existed before incorporation, and whether the work was done in the course of employment, remain to be tried.
The court also left open a question that may matter in other cases: whether the ordinary principles of contractual interpretation apply to an assignment the assignee did not sign or negotiate (at para 50).
For founders and investors
Is there a signed, written assignment from every person and company that wrote code, covering work done before incorporation?
Does the company, and not an individual, own the repository, cloud, domain and app store accounts?
Do at least two people hold administrative access?
Are recovery emails, phone numbers and multi-factor authentication tied to company-controlled accounts?
If development is done through a founder's own company, is there a services agreement that deals with ownership and handover?
For litigators
Run both ownership theories. Assignment and employment are independent routes to the same result.
Build irreparable harm from specifics: the customer, the deadline, the revenue share.
Draft the order in operational detail. Credentials, administrative control and recovery contacts are what the client needs on day one.
Keep an urgent motion proportionate. The court observed that both sides approached this one as if it were a motion for summary judgment (at para 13).
This post is general information about Canadian law. It is not legal advice about your situation.
