Software Created By Employees - Who Owns The Copyright?

There is a widely held belief that an employee who creates software outside normal working hours is entitled to the copyright in that software. While this may be true in some cases, the correct position is that, subject to contrary agreement, the copyright will belong to the employer if it was created "in the course of employment". Depending on the circumstances, this may include work done at home or outside normal working hours.

High Court guidance

The recent High Court decision in Penhallurick v MD5¹ makes it clear that, when deciding whether the work is done "in the course of employment", a number of different factors must be balanced against each other. The starting point will usually be to ask what the employee was employed to do, and the terms of the employment contract are an important indicator here. Employers should ensure that the duties specified in the contract include creating software of the relevant kind and are described as widely as reasonable.