Who owns the copyright in software created while working from home?

24 May 2021

In the recent UK High Court decision of Penhallurick v MD5 Ltd [2021] EWHC 293 (IPEC), the High Court ruled that certain copyright works which were created during an employee’s tenure with a former employer were owned by the employer, despite the work being partially conducted from the employee’s home and outside of standard office hours.

The case in question concerned the ownership of copyright in software designed for use in forensic computers, which was developed by Mr Penhallurick, a former employee of MD5. A significant proportion of the software was created by the employee at his home, outside of his normal working hours and using his own computer. Notwithstanding this, given that the creation of this type of software was the central task for which Mr Penhallurick had been engaged by MD5, Judge Hacon held that there was a “strong and primary indication” that Mr Penhallurick’s work in developing the software in question formed part of the course of his employment duties. The court concluded that MD5 was therefore the owner of the copyright in the works.

This decision will no doubt provide comfort to employers in light of the increased need for employees to be working from home as a result of the COVID-19 restrictions.

"The fact that an employee does work at home is relevant to the question of whether the work is of a nature to fall within the scope of the duties for which he is paid but it may or may not carry much weight. Where it is otherwise clear that the work is of such a nature, 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...If it's clear that the employee is being paid to carry out a task as agreed with his employer, he may choose to use tools supplied by his employer or his own tools; either way, the task is carried out in the course of his employment." Judge Hacon (at paragraph 66)