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Case law: Court clarifies when rights in copyright work created by employee do not belong to employer

Employers should consider the extent to which terms in an employee's contract of employment mean they own intellectual property rights for those they pay employees to create, following a recent ruling.

September 2018

This update was published in Legal Alert - September 2018

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

If employees create intellectual property rights, such as copyright works or rights in a patentable invention, 'during the course of their employment', the law says that the rights usually belong to their employer, as it is usually created for the employer who has paid for it.

However, the law also says that a person is presumed to be the author of a work if their name appears on it when it is first made public, unless and until the contrary is proved.

In a case with complicated facts, a dispute centred on whether a person employed as a design director had designed greetings cards in the course of her employment, such that the copyright belonged to her employer.

The High Court gave guidance on the factors to take into account, although it stressed that not all will always be relevant, and no one factor takes prominence – it depends on the circumstances. Nor is the list exhaustive. It referred to:

  • The terms in the employment contract
  • Where the work was created – for example, in the office or at home?
  • When it was created – for example, during or outside normal working hours
  • Who provided any materials used (computer, software, equipment, etc)
  • Whether the employee was working subject to direction or on their own initiative
  • Whether the employee could have refused to create the work
  • Whether the work the employee produces is 'integral' to the business

Here, the Court ruled that given these factors, the employee had designed the cards outside the course of her employment, so the copyright in them belonged to her. She had also put her name on the cards she designed, creating the presumption she owned copyright in them. The other side was unable to produce evidence to rebut this presumption.

One point raised by the other side was that she was employed as a 'design director'. It therefore argued that this must mean her role included designing cards – she could not have refused to do so if asked. However, she successfully argued that her day-to-day role was mostly managerial and administrative and did not require her to be involved in any actual design work. The Court agreed with her, noting that job titles are not necessarily relevant when determining whether someone is acting in the course of their employment.

Operative date

  • Now

Recommendation

  • Employers should consider the extent to which terms in an employee's contract of employment mean they own intellectual property rights they pay an employee to create

Case ref: MEI Fields Designs Ltd v Saffron Cards and Gifts Ltd [2018] EWHC 1332

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.

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