Executive Summary: Key Legal and Evidentiary Issues

• Jawad, as CEO and acknowledged fiduciary of ILP, incorporated a competing company (DAI) days before the asset purchase agreement took effect and secretly pursued AI-enhanced K-12 education software for his own benefit.

• Evidence of undisclosed conflict of interest included hiring graduate students through DAI to conduct AI research using ILP's Dossier software, building DAI marketing materials with ILP resources, and presenting DAI's advanced progress at public conferences — all while still employed by ILP.

• The Court applied the higher strong prima facie case standard given the employment-derived fiduciary obligations and the practical likelihood that an injunction would effectively end the action.

• Non-Compete Clause in the APA was found unambiguous, reasonable, and enforceable, covering the creation or licensing of K-12 education software directly competitive with Dossier for a five-year post-employment restricted period.

• Non-Solicitation Clause was struck down as fatally ambiguous and unreasonably overbroad because it referenced present-tense customers and business relations without limiting them to those known during Jawad's employment.

• Irreparable harm was established through the imminent May 2026 launch of the DAI App, the niche K-12 market at stake, contractual acknowledgment of irreparable harm in the APA, and the unquantifiable loss of potential new customers and goodwill.

Background and the parties involved

Intellimedia Limited Partnership (ILP), an Alberta-based software company operating in the K-12 education sector, brought an application for an interlocutory injunction against its former CEO, Ahmad Jawad, and his corporation, DOCEOAI Analytics Inc. (DAI). The dispute arose from the 2020 acquisition of Intellimedia Incorporated (IINC) — a company Jawad had co-founded in 2006 — by ILP pursuant to an asset purchase agreement valued at $5,124,500 (before adjustment) plus the assumption of defined liabilities. As part of that transaction, Jawad entered into an employment agreement to serve as ILP's CEO for a three-year term, expressly acknowledging his fiduciary status and agreeing to devote all his time, attention, and effort to ILP's business.

The asset purchase agreement and restrictive covenants

The APA contained restrictive covenants, including a Non-Compete Clause and a Non-Solicitation Clause. The Non-Compete Clause prohibited Jawad from involvement in the creation or licensing of education software products for K-12 institutions that directly competed with IINC's software — most notably its flagship product, Dossier — in specified Canadian provinces and territories. The restricted period ran from the APA's closing date until five years after the termination of Jawad's employment agreement. The APA expressly stated that these covenants were integral to the transaction and that the buyer would not have acquired the assets without them. Jawad himself agreed, in the APA, that the terms were reasonable and necessary.

Jawad's conduct during employment with ILP

The evidence revealed that just days before the APA took effect on April 1, 2020, Jawad incorporated DAI to pursue AI opportunities in the education sector. He admitted during questioning that he created DAI specifically to build an AI solution for K-12 education. He did not inform the buyer about these intentions. During his tenure as ILP's CEO, beginning in 2022, Jawad obtained a grant from Technology Alberta, hired graduate students to research AI applications for education data through DAI, and used ILP's bookkeeper and at least one of ILP's international contractors to support DAI's activities. Invoices from the graduate students indicated they were given access to ILP's Dossier software, and described their work as AI research "for the Dossier system and assisting [in] building [an] AI algorithm within Dossier." DAI marketing materials referencing AI in K-12 education were created, some initially bearing ILP's branding before being changed. Jawad never disclosed the specifics of these activities to any other directing mind of ILP or its general partner.

The May 2024 presentation and departure from ILP

In May 2024, while still CEO of ILP and in the midst of transition discussions, Jawad delivered a public presentation at an AI seminar under DAI branding. He described how DAI was working to place AI at the centre of school data and decision-making — a concept strikingly similar to ILP's own Dossier value proposition. He disclosed that he had a machine engineer building models and expected an algorithm ready for testing within six months. This was notably inconsistent with his affidavit claiming that no code had been written before his departure and that DAI's pre-departure work was limited to preliminary considerations. Even when Keplar principals raised concerns about DAI, Jawad assured ILP that his work was not competitive and reconfirmed his obligations under the restrictive covenants, without disclosing the true scope of DAI's progress.

Direct competition between the DAI App and Dossier

The Court examined whether the DAI App would directly compete with Dossier. While Dossier functions primarily as a data management system allowing educators to input, view, sort, and analyze student data, the DAI App was designed to use AI models to access the same categories of school data and generate substantive recommendations and predictions through a chat-based interface. Jawad himself acknowledged that both products serve as data-informed decision-making tools to support student learning, with the key difference being that the DAI App uses AI to make that process "faster and better." The Court found that even though the products differed in some features, they would directly compete for school districts that do not yet use Dossier or similar software — districts that would need to choose between the two products when seeking to leverage their data for improved decision-making.

The applicable merits standard

The parties disagreed on whether the lower "serious issue to be tried" standard or the higher "strong prima facie case" standard should apply. The Court acknowledged that because the restrictive covenants were linked to a commercial asset purchase agreement between sophisticated parties, the lower standard would normally apply. However, because ILP's claims also relied on Jawad's post-APA breach of employment-derived fiduciary obligations — which constituted a restraint of trade — and because granting the injunction would likely end the action from a practical standpoint given DAI had no other business or revenue, the Court applied the strong prima facie case standard.

Findings on breach of fiduciary duty and the Non-Compete Clause

The Court found that ILP established a strong prima facie case that Jawad breached his contractual and common law fiduciary duties by failing to advance ILP's best interests, failing to devote his time to ILP's business, breaching his duties of candour, loyalty, and avoidance of conflicts of interest, and diverting the corporate opportunity of developing AI-enhanced K-12 software to DAI for his own benefit. Regarding the Non-Compete Clause, the Court found it unambiguous in scope of activities, duration, and geography, and that there was a strong prima facie case Jawad had breached it through the creation of the DAI App. Even if the geographic scope were challenged, it could be saved through blue-pencil severance to cover at least Alberta.

Findings on the Non-Solicitation Clause and breach of confidence

The Non-Solicitation Clause fared differently. The Court found it fatally flawed because it purported to apply to customers and business relations in the present tense without limiting the restriction to persons with whom ILP had a connection during Jawad's employment. This ambiguity and overreach could not be cured through severance. As for breach of confidence, the Court found that ILP did not meet the strong prima facie case standard, though it would satisfy the lower serious issue to be tried threshold given the apparent use of Dossier and ILP resources in the graduate research.

The ruling and outcome

Justice M.A. Marion of the Court of King's Bench of Alberta granted an interlocutory injunction in favour of ILP, though not on the exact terms requested. The Court enjoined the Defendants, pending trial, from engaging in any business involving the creation or licensing of AI software products in the K-12 education sector that are directly competitive with ILP's Dossier software in the geographical regions where ILP conducted Dossier business as of August 2024, and specifically enforced the Non-Compete Clause. ILP's claims for relief based on solicitation and the Non-Solicitation Clause were denied. The question of whether DAI's completed chat application, Clario, falls within the scope of the injunction was left for the parties to resolve, with a further process available if agreement cannot be reached. ILP was found to be substantially successful and presumptively entitled to costs, though no specific monetary amount was awarded or determined at this stage.