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Working from Home & IP: Who Owns What?

Home Working

When the Covid-19 pandemic began, thousands left their workplaces behind and began working from home. Over the past 18 months or so, working from home has not only become commonplace but now, as employees return to their normal places of work, it has become the preference for many. Working from home has made the long-elusive work-life balance much easier to strike. In many cases, working conditions are more comfortable and convenient, common workplace annoyances are reduced or even removed, and according to some studies, productivity rates have improved (in the interests of balance, however, it should also be noted that there are those who say the opposite).

Whatever the productivity merits, there are some employees who have become so attached to working from home that – according to a recent opinion piece in The Guardian (available here) – they are prepared to accept pay cuts to continue working at home instead of returning to the office. The merits of this approach warrant their own discussion, which we will save for another time. What is important, though, is that if greater numbers of employees are likely to make a permanent switch to working from home, some formalities that might have been overlooked in the scramble to lockdown last year must be addressed.

One of those formalities is copyright and intellectual property more broadly. The default position on copyright ownership is that works created by employees in the course of their employment belong to their employer unless there is an express agreement to the contrary (for example, a provision in an employment contract). In the case of self-employed consultants, the default position for commissioned copyright works is that the creator of the work is the owner, unless it is agreed otherwise in writing. Whether a commissioned work is assigned to the commissioning party or merely licensed to them should be dealt with in the contract.

So far so good. What happens, though, when an employee is working from home and creates something outside of their normal working hours, using their own computer?

Penhallurick v MD5 Ltd

Earlier this year, the High Court considered a case in which a former employee of MD5 Ltd, Mr Penhallurick, had developed a piece of software for use in forensic computers along with a graphical user interface and a user guide. Much of the work had been done outside of Mr Penhallurick’s normal office hours, at home, and using his own computer. The court nevertheless held that MD5 Ltd owned the copyright in the works in question.

A key factor in this decision was the fact that Mr Penhallurick’s normal job duties entailed the creation of the same kind of software. Consequently, there was a “strong and primary indication” that this work, even though it was outside of his normal hours, undertaken at home, and using his own computer, nevertheless formed a part of the course of Penhallurick’s employment.

“…in my view the place where the employee chooses to do the work will not generally make any difference. The same applies to the ownership of the tools the employee chooses to use.” – Judge Hacon

It is also important to note that the work in question was undertaken several years ago, long before the massive growth in working from home caused by the pandemic. If this reasoning applies to work undertaken at home under “normal” circumstances, then one would arguably expect it to be even more likely to apply to work undertaken at home under “new normal” circumstances. (Author’s note: Sorry, you knew we were going to say “new normal” somewhere here, didn’t you?)

With this in mind, then, whether you are dealing with an employee or taking on a contractor, it is important to consider copyright ownership from the beginning, particularly where the individual concerned will be creating some form of copyright works for you. Ensure that a proper contract is in place which clearly defines the individual’s role and duties and, if necessary, addresses copyright ownership and any other applicable IP rights.

If working from home is set to remain a preferred and more common way to work, be it fully or partly with time divided between home and the office, it is even more important to be clear on what constitutes “work in the course of employment”. Working from home is inherently flexible. In many cases, it makes little difference to an employer or to the resulting work whether it is done at 3pm or 11pm. If an employee’s previous office hours were 9am to 6pm, however, there is potential for confusion unless their contract of employment is amended accordingly.

Last year, we witnessed a proverbial stampede for the exit as employees left their offices behind and set up shop on the sofa with a laptop, clad in their finest pyjamas. Understandably, there was insufficient time (not to mention considerable panic and uncertainty over what damage the virus might do to businesses and the global economy as a whole) to get the formalities and legalities in order. Now, however, it is time to take a step back and get things sorted out.

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