Commercial litigation: Federal gov't sued by software developer

The Canadian government is being sued by a software developer over allegedly not paying a user fee for using intellectual property. The commercial litigation suit between the Ontario developer and the government stems from the allegation that Employment and Social Development Canada has been using the company's source code without a proper licence -- an allegation the government disputes. The company's management team says this supposed misuse was instrumental in the company not meeting its 2019 financial projections and contributed to layoffs and shareholder problems.

Although the government would not speak to particulars of the case now before the courts, it did allege that the company is the guilty party for using government data to develop its software. The lawsuit is born out of a 2017 $500,000 contract between the government and the developer. It involved the transfer of information between databases. 

Apparently, as the contract was coming to a close, the company was asked to provide for its product, which a government spokesperson said is a common request. The code is usually held in escrow and would only be used if the company went out of business. However, the company claims the government used the code anyway without the licence to do so.   

Commercial litigation suits can be very complex. It may be best to get the counsel of a lawyer in Canada experienced in business law before moving forward in any process. A lawyer will review cases on an individual basis and may be able to provide guidance on how to proceed with any action.  

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