Employees Working From Home and Copyright Ownership

The most recent government guidance says that “office workers who can work from home should do so”. It also says that people should continue going in to work if they need “to access equipment necessary for their role or where their role must be completed in person”.


What happens when an employee is working from home and creates something outside of their normal working hours, using their own computer?


It is important to consider copyright ownership from the beginning when you are hiring an employee or a self—employed contractor especially where the person concerned will be creating some form of copyright work for your business.


In the case of an employee the general rule on ownership of copyright is that works created by an employee in the course of their employment belong to their employer unless there is an express provision in their employment contract or agreement to the contrary. Where someone is a self-employed consultant, the general rule for copyright works eg software development is that the creator of the work is the owner, unless there is an agreement to the contrary.



It is therefore essential when hiring an employee or a self-employed consultant that there is an express provision in the contract of employment or contract of engagement dealing with ownership of intellectual property created by the employee or self-employed consultant.


You should have a contract in place which clearly sets out the individual’s role and duties and addresses copyright ownership and any other applicable IP rights. As working from home (whether full-time or part-time) is gradually becoming an accepted way to work more home it is also important to be clear on what constitutes “work in the course of employment”.


When the Covid-19 pandemic began, many employees began working from home. Now working from home has not only become standard – it has also become the preferred mode of work for many.



Working from home has made it easier for employers and employees to attain the long desired work-life balance. For many, home working conditions are more convenient and some common workplace distractions have been eliminated or reduced. In addition some employers have reported an increase in productivity rates, though some employers have reported a decline in productivity rates.


If greater numbers of employees are likely to make a permanent switch to working from home, it will be important for employers to consider who owns original works or inventions created by employees whilst working from home.


Penhallurick v MD5 Ltd (March 2021)


In the recent case of Penhallurick v MD5 Ltd (March 2021) heard in the Intellectual Property Enterprise Court (IPEC) the issue arose as to who was the owner of works created by an employee outside of his normal office hours and using his own computer at home.


In this case Mr Penhallurick a former employee of MD5 Ltd, had created eight works, which included various versions of software for use in forensic computers together with a graphical user interface and a user guide. Much of the work had been done outside of Mr Penhallurick’s normal office hours, at home when employed by MD5 Ltd using his own computer and according to Mr Penhallurick in his own time. The court nevertheless held that the works were created in the course of Mr Penhallurick[‘s employment and formed part of his employment duties therefore MD5 Ltd owned the copyright in the works in question.


A key factor in Judge Hacon’s decision was the fact that it was clear from the evidence that Mr Penhallurick’s normal job duties entailed the creation of the same kind of software for forensic computing – this was a central task for which MD5 Ltd was paying Mr Penhallurick at that particular time. Therefore it was clear that despite the fact that a large proportion of this work was undertaken at home outside of his normal hours and using his own personal computer, this did not make any difference to the fact that if formed a part of the course of his employment. In addition all versions of the software created by Mr Penhallurick were created with the knowledge and encouragement of the employer and the software was also being made by Mr Penhallurick to improve a software product that was being sold by the employer.


As Judge Hacon said in his judgment:“…in my view the place where the employee chooses to do the work will not generally make any difference. The same applies to the ownership of the tools the employee chooses to use.”


It is essential to note that the work in question was undertaken by Mr Penhallurick some years ago, before the growth in home working brought about by the pandemic.


However, If this reasoning applies to work undertaken at home before the pandemic and the growth in home working then it is arguable that it is even more likely to apply to work undertaken by staff at home during the pandemic.


Conclusion


This case provides employers with guidance in relation to who is the first owner of copyright in works created by an employee when working from home. It is of great significance given the increase in home working occasioned by the pandemic. To ensure that such claims do not arise or are easily quashed when they arise you should review your employment contracts to ensure that your employees duties are clearly defined and that the relevant intellectual property clauses are included. You should seek legal advice immediately if you have any concerns.


As we are approaching a new year, it is time to take a step back and get things sorted out.


How can Pure Business Law help?


We are specialist intellectual property Solicitors based in Bedford and London and operating nationally. As business law specialists, we will protect your intellectual property rights and resolve any disputes which may arise regarding your intellectual property ownership.


If you would like to discuss any legal issues, disputes concerning your intellectual property rights or anything raised in this article please contact us and speak with one of our solicitors. Pure Business Law is regulated by the Solicitors Regulation Authority and is a licensed member of the Law Society of England & Wales.


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