Copyright Rules on Software Developed by an Employee Working at Home

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Software Developed by an Employee Whilst Working at Home

In the recent case of Penhallurick v MD5 Limited, the Intellectual Property Enterprise Court has looked at the important question of who owned the copyright in computer software in circumstances where some of the development work had been done by an employee whilst working at home.  

The Court concluded that the copyright in various literary works relating to the computer software Mr Penhallurick had created for his former employer, MD5 belonged to MD5. The Court held that Mr Penhallurick had created the works during the course of his employment with MD5, and therefore MD5 was deemed to be the copyright owner in accordance with the Copyright, Designs and Patents Act 1988. 

This was despite the fact that some of the work had been done from Mr Penhallurick’s home, outside normal office hours and using his own computer.  

Reaching the Conclusion of the Case

In coming to this conclusion, Judge Hacon held that it was key that the software being made was the central task which MD5 were paying Mr Penhallurick, and therefore this created a “strong and primary indication” that the work in developing the software was done in the course of Mr Penhallurick’s employment. 

The fact that a significant amount of the work was done by Mr Penhallurick at his home and using his own computer was not enough to contradict this.    

The Court’s decision will no doubt come as a welcome relief to employers in respect of employee inventions, particularly in the current circumstances where employees may be required to work from home due to COVID-19 restrictions and because in the future, employees may increasingly split their working hours between the office and home. However, in this case, the Court’s decision relates to copyright only, and the Courts may well come to a different conclusion in respect of different areas of intellectual property law.  

Here to Help

Our specialist Intellectual Property Disputes Team routinely advise on a broad range of disputes relating to copyright, trademarks, patents and design rights, along with matters relating to data protection and confidential information. If you would like further information or assistance, you can contact us on 0161 941 4000 or email The Intellectual Property Disputes Team for more information.