Anonymised, illustrative composite. The publisher held a properly signed written assignment and lost the library anyway, to a later assignee that paid, knew nothing, and registered first. Copyright Act s.57(3) runs the race between two registrations, not between a signature and a filing.
At a glance
A buyer was acquiring the assets of a Canadian e-learning publisher for $4,300,000. Thirty-one of its eighty-eight workplace-safety courses were built around a library of about nine hundred photographs commissioned from one photographer between 2016 and 2018 and assigned to the publisher in 2019 under a properly drafted written assignment covering the whole library.
Intellectual property diligence asked the right question and got the right answer. There was a signed written assignment. It satisfied Copyright Act s.13(4) in every respect. Nobody thought to ask the second question.
The 2019 assignment had never been registered with the Copyright Office. In 2023 the photographer, by then in financial difficulty, assigned the same library to a stock agency for $140,000, and the agency registered its instrument. Nobody at the publisher knew until the agency's licensing team wrote to one of its customers about a course screenshot.
This is the only file in the cluster where the company did everything right at the point of acquisition and still lost the asset. There is no drafting failure, no missing signature and no misclassified contractor. The defect is an omission after the fact, in a register nobody searched.
$4,300,000 asset purchase. Thirty-one of eighty-eight courses built on the library, carrying about $740,000 of $2,100,000 of annual revenue. The photographer was paid $96,000 for the original commissions and $47,000 for the 2019 assignment. The agency paid $140,000 and registered. Registering in 2019 would have cost the prescribed fee and an afternoon.
Section 57 creates a voluntary register and attaches a consequence to not using it. Subsection (1) obliges the Registrar of Copyrights to register an assignment, or a licence granting an interest, on being furnished with “the original instrument or a certified copy of it, or other evidence satisfactory to the Registrar of the assignment or licence” and the prescribed fee. Registration is never a condition of validity between the parties.
Subsection (3), When assignment or licence is void, decides the deal: “Any assignment of copyright, or any licence granting an interest in a copyright, shall be adjudged void against any subsequent assignee or licensee for valuable consideration without actual notice, unless the prior assignment or licence is registered in the manner prescribed by this Act before the registering of the instrument under which the subsequent assignee or licensee claims.”
Two units in that sentence are routinely misread, and both matter here.
It follows that a chain-of-title review which stops at "is there a signed assignment" is testing only half the provision. The other half is a search of the Canadian Copyright Register, which is a different register from the trademarks database and the patents database and is not covered by a corporate or personal property security search.
One point is genuinely open on the words. If the subsequent assignee never registers, the condition “before the registering of the instrument under which the subsequent assignee or licensee claims” never comes about. What that means for an unregistered prior assignment facing an unregistered later one is not resolved on the face of the subsection, and this file does not need it resolved — the agency here registered.
The same trap, a different statute, a materially different test. Patent Act s.49(4), Transfer void, reads: “A transfer of a patent that has not been recorded is void against a subsequent transferee if the transfer to the subsequent transferee has been recorded.” The shape is the same and the content is not: no requirement of valuable consideration, and none of absence of actual notice. On the face of it a later transferee who knew still takes — harsher than s.57(3). Reasoning from one to the other gets the answer wrong in one direction or the other.
The transaction closed at a reduced price. The buyer took the catalogue but treated the thirty-one affected courses as carrying a licence risk rather than an owned asset: $410,000 came off the price and $250,000 of that was held back against buying the agency's position or reshooting. The publisher registered its eleven other catalogue assignments the following week.
The negotiation with the agency settled at a paid-up licence for the existing courses, on the assessment that proving actual notice was a poor bet. Section 57(4) lets the Federal Court order rectification of the Register on the application of the Registrar or any interested person, but rectification addresses a wrongly made or omitted entry — not a validly registered assignment from a person who then still appeared as owner.
Registering in 2019 would have cost the prescribed fee per instrument and an hour of a clerk's time. Not registering cost $410,000 off the price, a $250,000 holdback and a negotiated licence for material the publisher had already paid for twice. It is one of the cheapest protective steps in Canadian intellectual property practice and one of the least often taken, because the assignment itself feels like the finished job.
The tell is an intellectual property schedule listing assignments without registration particulars. If the column is missing, nobody searched the register, and nobody knows whether a later instrument is already on it. The second tell is a counterparty in financial difficulty: an author who has assigned once and needs money is the one most likely to assign again. Compare the platform the contractor still owned.
A 30-minute call is enough to tell you whether AI pays for itself here.
Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
No pitch, no listings. One email when the first report lands.
