Executive Summary: Key Legal and Evidentiary Issues

• Sherwood Innovations Inc. sought summary judgment or an order striking copyright infringement claims brought by Vero UK Limited, Hexagon Manufacturing Intelligence, Inc., and Planit Software Limited over the VISI software.
• Dissolution of Vero UK in March 2025 raised questions about its capacity to have brought a related pleadings motion, though the Plaintiffs proposed removing it as a plaintiff.
• Hexagon's standing turned on whether its licensing rights in Canada satisfied the written-assignment requirement in subsection 13(4) of the Copyright Act, given that the Distribution Agreement's defined Territory was the United States only.
• Evidentiary disputes arose over portions of the Lee Affidavit, including inadmissible foreign law opinion and hearsay, and over the sufficiency of the Harris Affidavit's foundation.
• Justice Whyte Nowak found the Hexagon standing question to be a novel issue requiring trial testimony and credibility assessment rather than summary determination.
• Both motions were dismissed, and no costs were awarded despite the Plaintiffs' success on the motion.

Facts of the case

Vero UK Limited, Hexagon Manufacturing Intelligence, Inc., and Planit Software Limited alleged that Sherwood Innovations Inc. copied the source code and object code of version 2021 of their VISI software without consent. Sherwood denied infringement and instead brought a motion for summary judgment or, alternatively, an order striking the claims. The corporate and pleading history is central to the motion. The Plaintiffs served the original Statement of Claim on January 24, 2024, naming Vero UK and Vero Software, Inc. (Vero USA) as plaintiffs. On April 24, 2024, an Amended Statement of Claim substituted Hexagon for Vero USA, reflecting that Vero USA had merged with Hexagon on or about June 30, 2021, making Hexagon Vero UK's exclusive distributor and licensee of the Works in the United States and Canada. Sherwood consented to that amendment but later said it had not appreciated that the Distribution Agreement's defined "Territory" was limited to the United States, with no mention of Canada. Further corporate changes followed: on November 25, 2024, Vero UK transferred the Works and related intellectual property to Planit under a Business Transfer Agreement and IP Assignment Agreement, and Vero UK was dissolved on March 25, 2025. The Plaintiffs then sought leave to file a Further Amended Statement of Claim adding Planit, which Associate Judge Moore granted on June 11, 2026 after determining that motion should be heard before Sherwood's. The proposed further amendment removes Vero UK as a plaintiff and renames Hexagon as Hexagon Manufacturing Intelligence LLC, reflecting its conversion to a limited liability company on February 19, 2026.

Distribution agreement and evidentiary issues

Sherwood's motion rested on the Distribution Agreement dated January 1, 2017, under which Hexagon obtained its licensing rights, arguing that because the agreement's Territory was defined as the United States only, Hexagon had no written assignment covering Canada as required by subsection 13(4) of the Copyright Act. The Plaintiffs countered with evidence from Andrew Harris, a director of Planit and former director of Vero UK, who stated that Vero UK and Vero USA also had an unwritten agreement extending the Distribution Agreement to Canada, and that Vero USA, Hexagon, Planit, and Hexagon LLC had all operated under the same arrangements for sales in the United States and Canada. Sherwood challenged the Harris Affidavit's foundation based on Mr. Harris' omission of the dates he served as a director, though it did not cross-examine him or formally challenge his credibility. The Plaintiffs, in turn, objected to portions of Sherwood's affidavit from associate David Lee, including paragraphs offering United Kingdom company law opinion, factual or legal characterizations amounting to argument, and improper hearsay. The Court agreed that Mr. Lee's evidence on UK company law was inadmissible, as foreign law is a question of fact requiring expert evidence, and excluded the identified improper paragraphs under Rules 81(1) and (2) of the Federal Courts Rules.

Court's reasoning and analysis

The Court held that Sherwood bore a heavy burden to show no genuine issue for trial, and that novel legal questions are not a bar to summary judgment where they can be resolved as readily as at trial. On Vero UK, the Court declined to grant a declaration that Vero UK lacked capacity to bring the earlier pleadings motion while dissolved, noting that no such relief was sought in the Notice of Motion, that the time to appeal the Motions Judge's order had expired, and that the question would require interpreting the United Kingdom's Companies Act 2006 — itself a question of fact requiring expert evidence. On Hexagon, the Court accepted Mr. Harris' unchallenged evidence that Hexagon had, in practice, been treated as covering Canada under the Distribution Agreement without objection from the Works' owner, and found this raised a novel issue under subsection 13(4) best resolved at trial with live testimony and credibility assessment, drawing on the Federal Court of Appeal's less formalistic approach in Tremblay v Orio Canada Inc. On the alternative motion to strike, the Court found Sherwood had not shown it was plain and obvious the claims had no reasonable prospect of success, noting Vero UK had standing when the action was originally filed and there was no challenge to Planit's standing.

Ruling and outcome

Sherwood Innovations Inc.'s motion for summary judgment, or alternatively to strike the Plaintiffs' Amended Statement of Claim, was dismissed in full, with the Court ordering no costs to either party. Although the Plaintiffs succeeded on the motion, Justice Whyte Nowak exercised discretion to withhold costs because the motion raised a novel issue and both sides' conduct caused unnecessary expense — the Plaintiffs through their delayed offer to remove Vero UK despite its 2025 dissolution, and Sherwood by continuing the motion unchanged after the Plaintiffs' concession and Planit's addition as a plaintiff.