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28 April 2021 0 Comments
Posted in Employment, Opinion

So whose copyright is it anyway?

Author headshot image Posted by , Associate
Contributing authors: Charlotte Kilcar

In a recent case, the Intellectual Property Enterprise Court decided that the ownership of copyright in works relating to software developed by an employee largely from his home, in his own time, and using his own computer, belonged to the employer.

Intellectual property ownership

Our Employment and IP lawyers look into the reasons behind this decision and what this means for employers.

The case: Penhallurick v MD5 Ltd

Mr Penhallurick started his journey creating a method of retrieving a blue print of a targeted computer’s hard disk for forensic utility, before he started to work at MD5. He used freely available software, but the methodology improved and developed over his tenure as an employee of MD5.

When it comes to work protected by copyright, the general position is that the author (or creator) of a work is the first owner of copyright. However, Section 11(2) of the Copyright, Designs and Patents Act 1988 (CDPA) gives an employer automatic ownership of copyright provided that the employer can show that the work was created “in the course of [the employee’s] employment”.

MD5 said that in the course of his employment, discussions at work between MD5 employees and Mr Penhallurick were had around how he could develop this software as part of his duties as an employee. The Court considered the fact that making software for use in forensic computing was the principal task for which Mr Penhallurick was paid and this lead to a ‘strong indication’ that the software was developed in the course of his employment.

The fact that a significant proportion of work was carried out from Mr Penhallurick’s home and from his own computer was not enough to override that view. The Court also said that by virtue of MD5’s status as Mr Penhallurick’s employer, there was a binding agreement between the parties that copyright would be assigned to MD5.

Good news for employers

This will be a welcomed decision by employers, especially in the light of the pandemic, where employees have and perhaps will continue to work from home for some time.

There are, however, two important caveats:

  • It is important to bear in mind that this decision relates to copyright only. The law may be different when it applies to other types of intellectual property.
  • Also, section 11(2) of the CDPA only applies to employees. If consultants are creating work protected by copyright during the course of their consultancy, they will continue to own that copyright unless there is a written assignment of said copyright in place.

Regardless of the statutory protection afforded to your company under section 11(2) of the CDPA, we would recommend that employers ensure that your employment contracts include appropriate intellectual property provisions so as to prevent any ambiguity over the ownership of IP created by their employees.

If you would like a review of your employment contracts, or advice on ownership of intellectual property created by your employees, please do not hesitate to get in contact our Employment & HR team:

0330 404 8151     Email

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