Who Owns Copyright in the Works Created by Employees?
The decision of the English High Court of Justice raises some interesting issues concerning the ownership of copyright works created by employees.  EWHC 293.
The relevant legislation is the same in both England and in Canada. The Copyright Act provides that where the author of a work was in the employment of some other person under a contract of service and the work was made in the course of employment by that person, the person by whom the author was employed shall, in the absence of any agreement to the contrary, be the first owner of copyright.
The defendant is a leading UK provider of digital forensic and eDiscovery services. Agencies, typically the police, wish to analyze the content stored on a computer without, by the act of searching, corrupting or otherwise altering the files. The plaintiff had worked out a method of retrieving an image of a hard disk without writing on it, then presenting the image on a virtual machine so the image could be investigated. The plaintiff used a freely-available product, called VM software, to present the replica of the target computers hardware and operating system. Computer programs generally have safeguards to prevent them from being manipulated in this way, so part of the plaintiff’s method involved a password bypass feature he developed.
The plaintiff developed this method when he was studying for his MSc degree. A description of his method was part of his master’s thesis. The method was implemented manually and not performed automatically by the operation of the software.
The manual method that the plaintiff brought to the defendant on his employment with it was slow and cumbersome. The defendant’s position was that at this time, its representatives discussed with the plaintiff the possibility of developing software to implement the method automatically.
The parties disagreed over how the software to implement the method was developed. The plaintiff’s position was that he did it on his own time using his own computer system, which was outside the scope of his employment
The judge said that the determination required a multi-factorial assessment. There is no single test to be applied. The determination of whether or not given acts were carried out in the course of employment should be based on all the circumstances. Usually, where an employment relationship has been conceded, there will be factors which point to the copyright work being created in course of employment and some factors which point otherwise. The factors may include:
(a) the terms of the contract of employment;
(b) where the work was created;
(c) whether the work was created during normal office hours;
(d) who provided the materials for the work to be created;
(e) the level of direction provided to the author;
(f) whether the author could refuse to create the work/s; and
(g) whether the work was 'integral' to the business.
The initial contract of employment and subsequent agreements were not professionally drafted but developing the software was the central task for which the plaintiff was being paid by the defendant. This strongly suggested that the works were being created in the course of his employment. The plaintiff accepted the task with enthusiasm and worked on it at his home some of the time. However, his annual appraisal suggested much of the work was done during working hours at the defendant’s premises. Whatever the exact proportion of the work done at his home, it did not displace the strong indication it was work done in the course of his employment.
The plaintiff relied on the fact that each version of the software and the user guide identified him as the author of the works and the owner of copyright in the works. This gave rise to a presumption under the legislation that the plaintiff was the author and copyright owner until the contrary was proved. Given the conclusions that the trial judge arrived at, the defendant successfully proved it was the copyright owner and the presumption was rebutted.
The Canadian Position
As mentioned above the law is the same and it seems likely that a court in Canada would follow a very similar approach.
When an employer is engaged in a business that creates works or other subject-matter because of the action of its employees, it is important that their contracts of employment deal with ownership of the intellectual property, including copyright. In addition, each employee should provide a clear waiver of moral rights.
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These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.
A version of this article originally appeared on the Lawyer’s Daily website published by LexisNexis Canada Inc.