Who owns copyright in software developed whilst working from home? Employer or Employee?

Posted Wednesday 28th April 2021

Since the start of the Covid-19 pandemic last year, many employees have been working from home and in the future the number of employees splitting their working time between the office and home is likely to increase.

In relation to intellectual property rights, it will be important for employers to consider who is granted ownership of original works or inventions created by employees whilst working from home. A recent decision in the Intellectual Property Enterprise Court (IPEC) will be reassuring for employers. In Penhallurick v MD5 Ltd [2021] EWHC 293 (IPEC), the Court found in favour of the defendant, the employer MD5 Ltd, in copyright infringement proceedings. The Court granted a declaration that MD5 Ltd was the owner of the copyright in various literary works relating to software created by the claimant, Mr Penhallurick, during this course of his employment.

Despite the fact that Mr Penhallurick had created some of the works outside of normal office hours and using his own computer at home, the Court found that the works were created in the course of Mr Penhallurick’s employment and formed part of his employment duties. Judge Hacon stated that was clear from the evidence that making certain software for forensic computing was a central task for which MD5 Ltd was paying Mr Penhallurick at the relevant time. Despite a large proportion of the work being carried out at Mr Penhallurick’s home and using his personal computer, this did not make any difference to the fact that it formed part of his employment duties to MD5 Ltd. Furthermore, all versions of the software were created by Mr Penhallurick with the knowledge and encouragement of MD5 Ltd; the software was also being made to improve a software product already being sold by MD5 Ltd.

Judge Hacon granted a declaration of MD5 Ltd’s copyright ownership in relation to all the works in issue. Providing the work undertaken can be shown to be part of the employee’s duties for the employer, then copyright in it should be owned by the employer. It must be noted that this decision only applies to copyright but nonetheless it will give reassurance to employers given the continued need and potential future increase in home-working.

This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.

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