Who Own's the Copyright in Works Created By Employees in the Course of thier Employment?

19 April 2009

Who Owns the Copyright in Works Created By Employees in the Course of Employment?

By Paul Bicknell.

This article will address the issues surrounding works that are created by an employee in the cause of employment and the effect of the aforesaid in relation to the ownership of copyright works.

Section 11(2) of the Copyright, Designs and Patents Act 1988 (CDPA) provides: "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" this section will be analysed and explained in four sections.

Section I: The context of section 11(2).

When an employee creates a work that is, a literary, dramatic, musical, artistic, or film work absent an agreement to the contrary, the employer has first ownership of the copyright in that work. Although the employee retains his moral rights in relation to that work.

On the one hand it could be argued that the law fails in relation to the incentive based theory of production, that is by affording first ownership to the employer and not the creator - the law does not provide an adequate degree of incentive for the creation of new works. Others however, argue in favour of first ownership to be vested in the employer, after all the employer provides the facilities and possibly the materials used to make new works, and the employer is arguably better placed to exploit these new works than the employee.

Section II: what is an employee?

The CDPA s. 178 defines an employee as a person who is employed under a contract of service or apprenticeship. Generally, in practice this is not a difficult issue to determine, however, this article will address the circumstances that are situated on the fringes of what constitutes an employee.

A court will examine all the surrounding issues when discerning whether a person is an employee or not. However, the case law indicates that there must be degree of "mutuality of obligation" and "control".

"Mutuality of obligation" is illustrated by the fact that an employee will provide labour in return for pay and the work itself - the House of Lords has held that were there is an absence of such mutuality of obligation a person is not an employee (Carmichael v. National Power Plc [1999]).

"Control" concerns the fact that the employer must be able to exercise a degree of control over his employee: Ready Mixed Concrete v. Minister of Pensions and National Insurance [1968]. However, the reader must not be mislead - these two factors are not conclusive they are merely factors to be weighed in the overall consideration of as to whether or not a person is an employee.

Section III: Acting in the course of employment?

An employer still has to show that the employee created the work in the course of employment, notwithstanding the fact that the person is an employee. It can be seen from the authorities that the courts tend to look towards whether the work is the sort of work which falls within the type of activities that can be expected from the employee's line of work. An example of which, is the case of Stevenson Jordan v MacDonnell (1952) where an accountant who was an employee of a firm of management consultants, this accountant gave some public lectures; the issue arose as to who had first ownership of the lectures, was it the accountant or his employer? The court held because it was not shown that the employee could be ordered to give the lectures, he was not acting in the course of his employment, notwithstanding the fact that the employer paid the employee's expenses and that the employee was allowed to prepare for these lectures during work hours.

On the other side of the coin, just because works are completed by the employee in his own time or using his own personal recourses does not mean that the work falls out side the employee's duties. This is supported by the case of Missing Link Software v. Magee [1989] were the court held that, notwithstanding the fact that the employee had written the software in his own time and using his own tools and materials, it was not unarguable that the programmes were created in the course of employment.

Section IV: Keeping copyright in works created in the course of employment?

The issues above can be solved by an agreement whether oral, express or implied can between employer and employee, which vests first ownership in the employee.

By Paul Bicknell assistant to Izaz Ali (izaz.ali@lawdit.co.uk) Izaz Ali is a commercial lawyer who specialises in information technology law and intellectual property law with an emphasis on IT, escrow and buying and selling online businesses.