Background
Vero UK Limited owned copyright in VISI software (version 2021). It originally distributed the software through Vero USA, which merged into Hexagon Manufacturing Intelligence, Inc. in June 2021. In November 2024, Vero UK transferred its assets and intellectual property rights to Planit Software Limited via a Business Transfer Agreement, and was subsequently dissolved in March 2025. Three named plaintiffs then sued Sherwood Innovations Inc. for copying their software without authorization.
The defendant challenged the plaintiffs’ standing through a motion for summary judgment and, alternatively, to strike the claims. The defendant argued that Vero UK—as a dissolved UK corporation—lacked legal capacity to bring the action, and that Hexagon lacked standing to sue for copyright infringement in Canada because there was no written assignment of rights in Canada complying with section 13(4) of the Canadian Copyright Act.
The Court’s Holding
Justice Whyte Nowak dismissed the defendant’s motion on both grounds. Regarding Vero UK’s status: the plaintiffs offered to voluntarily remove Vero UK as a named plaintiff, rendering that issue moot. The court declined to issue a declaration that Vero UK lacked legal capacity at the time of an earlier procedural motion, noting that such relief had not been sought and would require expert evidence on UK company law.
Regarding Hexagon’s standing: the court identified a novel issue of law and fact concerning whether an unwritten agreement extending copyright distribution rights to Canada could satisfy the Copyright Act’s statutory writing requirement. The court found the Federal Court of Appeal’s decision in Tremblay v. Orio Canada Inc. (2013 FCA 225) suggested a less formalistic approach where the copyright owner has recognized the governing relationship, even if the relevant document was unsigned. Here, evidence showed that Vero UK and Hexagon had operated under the same distribution arrangements in both the United States and Canada, and Vero UK had not objected. The court concluded this issue cannot be resolved on summary judgment and requires trial testimony and full legal argument.
Key Takeaways
- A dissolved corporation’s status as a plaintiff becomes moot if the remaining plaintiffs voluntarily remove it before judgment and the appeal period has expired.
- Copyright assignment formalities under section 13(4) of the Copyright Act may not require strict adherence to written documentation where the copyright owner has recognized the assignment and operated consistently with it.
- Novel issues of fact and law, especially those requiring credibility assessment, are unsuitable for resolution by summary judgment and should proceed to trial.
- Corporate changes (mergers, dissolutions, asset transfers) during copyright litigation do not defeat standing where successor entities are properly added as plaintiffs.
Why It Matters
This decision reinforces that summary judgment is inappropriate for resolving novel questions about copyright assignment formalities, particularly where the copyright owner’s conduct and acknowledgment of an arrangement may satisfy the statutory purpose even without strict compliance with documentary requirements. The court’s analysis of Tremblay suggests Canadian courts may move toward substance-over-form in evaluating copyright assignments where the owner has consented and acted accordingly.
For software companies and technology licensors, the decision highlights the importance of clearly documenting territorial rights and the risks of relying on unwritten agreements or divergence between written terms and actual business practice. The case also demonstrates that procedural obstacles (like corporate dissolutions) in copyright litigation can often be cured through amendments, and that defendants cannot rely solely on technical standing defects where legitimate successors can be substituted.