AOD Corporation v. Miramare Investment Incorporated, 2021 ONSC 4280


Read full decision. Summary prepared by Alan Macek:

This Application relates to the validity of a patent agreement ... The Applicant, AOD, argues that the patent agreement is unenforceable because its president at the time, did not have authority to bind the corporation to this agreement without the required majority of 67% of its shareholders. ... The application for this patent was filed much earlier by AOD’s predecessor, WAC. WAC failed in about 2008 because of a lack of funding and its intellectual property was transferred to its secured creditors. ... Consequently, and in accordance with the common law rule of indoor management, Miramare never had any obligation or duty to investigate the internal affairs of AOD to ensure that Mercier had the actual authority to bind AOD. It was appropriate for Miramare to assume that Mercier, as director and president of AOD, had authority to bind the corporation. ... [The Agreement] is the equivalent of a licensing right or licensing agreement in favour of Miramare. In return, the patent agreement provides that AOD is to receive, amongst others, a stipulated percentage of Miramare’s gross revenues generated from the patent. In addition, the patent agreement provides to Miramare an exclusive option to purchase the patent at any time by paying to AOD its legal fees then incurred in order to advance the patent, up to $107,000.


Canadian Intellectual Property