Many of us dream of writing a best seller however might be surprised to learn that, depending upon our job role, our employer could potentially have a claim to the copyright and the financial rewards associated with this apparently private activity. This complex area was considered by the IPEC earlier this year in February 2021 in the case of Penhallurick v MD5 Limited.
MD5 Limited is a leading digital forensics company specialising in data recovery and professional dialogue. Virtual Forensic Computing "VFC" is a technique of retrieving an image of a computer's hard disk without writing on it and loading that image on a virtual machine so that it can be investigated. It is mainly used in police and criminal forensics. Mr Penhallurick had been researching and working on his VFC method since 2002 and joined MD5 in 2006. During his employment, he developed a fully automated version of the VFC method and further upgrade versions. Following the end of his employment, both parties claimed that they owned the copyright specifically eight works relating to the source codes and a user guide for VFC.
The judge in the Intellectual Property Enterprise Court considered the question of whether the works had been made "in the course of employment" for the purposes of section 11( 2) of the Copyright, Designs and Patents Act 1988. Mr Penhallurick argued that he had done most of the work in his own time and on a personal computer. The judge held that although Mr Penhallurick might have worked on the software in his own time and on his own equipment, that did not displace the strong and primary indication that it was work done in the course of his employment. The nature of the work fell within the scope of duties for which Mr Penhallurick was employed. The judge then went on to hold that even if the works had not been carried out in the course of employment, then there was a binding agreement between the parties that the copyright in the works would be assigned to MD5. In this regards, the judge specifically considered the terms of the original contract of employment but also a subsequent bonus agreement which was tied to sales of VFC and a post-termination agreement to provide updates and support.
Each case relies upon its own specific facts but this case, with its emphasis on the purpose of the employment and what the employee's duties, seems particularly relevant in a situation where the dividing line between home/personal activity and work is harder to draw given the move to home working over the past year. Employers need to ensure that their contractual documentation is up to date and reflects the employee's update job duties given the court's decision to pay greater attention to the employee's duties not where, when or on what equipment the work is performed.
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