Are you helping your employer too much?

If you are designing products for your employer or creating software or other products which your employer then sells to or licenses to customers then you need to be aware of the possibility that you may be helping your employer too much. This is important because, as the law stands your employer is likely to own the designs or the copyright to the software or other work product, even if you have written or are writing that software or creating that product design on your own computer or while using other equipment in your own time at home. As a result, your employer could be making a handsome profit from your labours while you remain on a fixed salary!

In this article I will first refer to the applicable statute law (acts of parliament). After that I will consider case law (the law as interpreted by judges) and, finally, I will make suggestions as to how you can protect your interests in these circumstances.

Legislation The relevant legislation is section 11(2) of the Copyright, Designs and Patents Act 1988 (‘CDPA 1988’) which states that: “Where a literary, dramatic, musical or artistic work [or a film,] is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary”.

The above also applies to lesson plans for teachers and lecturers: the teacher or lecturer is producing the plan or the lesson/lecture itself ‘in the course of his/her employment’.

Note that the important caveat in section 11(2) is ‘subject to any agreement to the contrary’. In other words, the employee can bargain with the employer in order to preserve his or her rights in the product design, software, film or lesson/lecture plan, as the case may be by entering into a separate rights agreement.

In addition, creators of designs, software, films, lessons, etc can take some comfort from another section of CDPA 1988, namely section 104(2) which states: “Where a name purporting to be that of the author appeared on copies of the work as published or on the work when it was made, the person whose name appeared shall be presumed, until the contrary is proved – (a) to be the author of the work; (b) to have made it in circumstances not falling within section 11(2) (i.e. works produced in the course of employment)…” What section 104(2) does in terms of helping you, the employee, to preserve your rights is that it requires proof as to whether the work was produced ‘in the course of employment’.

In this connection, a great deal will depend on whether the employer paid the employee to do the work. If producing software is within the services that the employee is contracted to provide – in other words receives payment for – then even if the work is carried out in the employee’s own home using his or her own equipment – then the court is likely to consider that the product (design, software, film, lesson, lecture etc) was produced in the course of employment. This would mean that the employer would hold the copyright and the creator would get no reward for his/her work – unless specifically agreed to the contrary.

As usual, this type of question is often best resolved by looking at relevant case law. Case law is formed when a senior court makes a ruling on a particular matter, often with the intention of intrerpreting statute law.

Case law The usual issue in this kind of copyright case is simply put: did the employee produce the work in the course of employment?

In a leading case, Mei Fields Designs Ltd v Saffron Cards and Gifts Ltd [2018] EWHC 1332 (IPEC), the judge said that deciding whether an employee produced a given work was an analysis requiring the assessment of multiple factors (this list is not exhaustive): (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 can refuse to create the work/s; and (g) whether the work is ‘integral’ to the business.

I would also add that whether the employee was paid to create the work as part of his or her normal duties – for example, as specified in the contract, or possibly as part of the employee’s job description is also something to be taken into account.

The way forward I suggest that one way you as the employee can protect your interest in the work you create is to draw up an agreement with your employer that you would be entitled to a share of the proceeds of sale, if the work materialises into a product which your employer goes on to sell or even forms part of a product which is exploited commercially.

Such an agreement should at least do the following: state the employer—employee relationship; exclude the provisions of s.11(2) of the act and include section 104(2), but with certain specifications; state that the employee is the creator of the work and is entitled to benefit from his or her input.

It is important that the agreement is incorporated into the employer contract.

This type of agreement requires a very precise form of drafting on the lawyer’s part. However, it is important to ‘get it right’ so that your intellectual property rights are protected and that you gain the appropriate reward for your work.

In a more recent case than that mentioned above, it was found that the employee had not taken steps to protect his intellectual property rights. The court held that a clause in the contract was fatal to his claim. It said:

“We the employer may assign other tasks or duties to you from time to time and we expect that you will be flexible to our needs and will reasonably accept such tasks or duties”.

By signing the contract, the employee had effectively agreed to that clause. As he was employed as a computer analyst, it was not unrealistic to expect him to write software for the company from which the company was able to profit. Had that employee taken the trouble to instruct a solicitor to draft an agreement protecting his copyright, the outcome may have been very different.

As it is, the company profited from the employee’s brilliance, but he did not.

Do not let this happen to you. We can help you solve this kind of problem to your advantage. Or, feel free to use the contact form. We look forward to hearing from you.

No part of this article constitutes legal advice. Always consult a solicitor for any legal problem you may have.

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