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Who owns copyright in software developed at home?

This question has become more important, and much more frequently asked, since the advent of COVID-19, with its lockdowns and the accompanying spread of working-from-home culture.  Programmers and software engineers are now more likely to be working from home, often using their own computer equipment, and the old division between office time and personal time has become more and more blurred.

As is always true of questions about the law, the answer to the question in the title above is, “It depends on the facts”, but there is now in 2021 a piece of very clear, settled case law,[1] applicable in England and Wales, that makes it fairly straightforward to determine ownership of copyright in some typical situations involving employees working outside working hours and using their own equipment. The ownership of the copyright in such situation is a point that is left undetermined by the wording of relevant statute – the Copyright, Designs and Patents Act, 1988 (CDPA 88).  The statute merely states that where a work is produced by an employee “in the course of his employment”, the first owner of any copyright in the work is the employer (absent an agreement to the contrary), thus leaving open the definition of  “in the course of his employment”.

Until recently, a 1989 case[2] (that never reached a final verdict on this specific issue) strongly indicated that when an employee who was employed in a senior position involving the creation of software wrote a competing program outside work time and using his own equipment, either the copyright in that software belonged to the employer by virtue of its being produced in the course of the employee’s employment for that specific type of work (following CDPA 88), or the copyright was held in a constructive trust for the employer by virtue of the employee’s fiduciary duty as an employee of sufficient seniority to be trusted with company confidential information, and its fruits therefore belonged to the employer.  The position indicated in this case is now confirmed and clarified in the settled case of 2021.

This 2021 case makes the “in the course of his employment” issue very much clearer.  The employee programmer in the case produced some software and accompanying documentation works in his own time and using his own equipment.  He claimed that the copyright in the works was his own and not his employer’s. The court, however, found that the software and documentation works were “of a nature to fall within the scope of the duties for which he was paid”, being the same specific type of work that the employee programmer was employed to produce, and this created a “very strong indication” that the works were created “in the course of his employment” . The fact that parts of the program and documentation were produced in the employee’s home, outside normal working hours and using the employee’s own equipment was not enough to overcome that “very strong indication” and the court found that the copyright in the works therefore belonged to the employer.

 

[1] Penhallurick v MD5 Ltd [2021] EWHC 293 (IPEC)

[2] Missing Link Software v Magee [1989] FSR 361