Hybrid and fully remote work arrangements have blurred lines and shifted norms around how and where work is performed. These changes present numerous administrative and legal challenges to employers. They also necessitate new practices and policies to ensure that employers own and retain all necessary rights in intellectual property that their employees create. In an age where there is increased blurring of work and home life e.g., employees starting a task or project at the office and finishing off at home, the question of whether copyright works such as software are created “during the course of employment” can be unclear. This distinction is important because where works are created “during the course of employment”, pursuant to the statutory presumption in s.11(2) of the CDPA 1988, the copyright in the work belongs to the employer as first owner, absent an agreement to the contrary.

The recent judgment of PQ Systems Europe Ltd and Others v Aughton and Others [2023] EWHC 581 (Pat) considered this presumption, ultimately ruling in favour of the employer and providing some helpful insights into the test as applied in the context of hybrid working.

The judgment contained a detailed fact-finding analysis of the circumstances in which the software in question was created. We will spare you that detail here, but have picked out four key takeaways from the analysis and overall conclusion:

1. the fact that a copyright work is created at home during an employee’s own time is of little relevance, as no distinction can be made between personal and work matters;
2. an employee’s sense of ownership towards a copyright work does not detract from the position under s.11(2) CDPA;
3. despite an employer not having use for a specific copyright work, this does not mean it ceases to be of value to a competitor and thus something an employer has a continued interest in protecting; and
4. a reminder that experts should be balanced and neutral to avoid their conclusions being undermined.

With a further look into point 1 – working from home:

• an argument can be made, in favour of the statutory presumption that, if it can be evidenced that an employee’s working style has extended beyond the remit of their contract, it can be deemed that such copyright work has been created during the course of employment.
• To elaborate, the defendant in this case, Mr Aughton, made the argument that the software programme in dispute was made at home, in his own time (during weekends and evenings) and therefore ownership of the software belonged to him and not his former employer. The judge in this instance concluded this was of little relevance as no delineation could be made between personal and work matters.
• In this case, Mr Aughton’s contract was a very basic one, with no specific terms favouring either party. Mr Aughton was originally contracted to work between the hours of 8:30 am to 5:00 pm, Monday to Friday. However, by around 2007 he had become accustomed to working in the evenings and at weekends on company matters. Further, his position as ‘Senior Partner’ in the company meant he had some degree of autonomy over the way he worked and which projects he worked on. This scenario meant there was no clear distinction as to what could be regarded as work or a personal project.

In today’s current flexible working climate where individuals work in a variety of environments and many outside the typical 9-5 or contracted hours due to employers allowing greater flexibility to manage personal needs, there is a real risk that current contracts in place are not equipped to deal with similar situations to this case.

A couple of takeaway points:

• Employers and creators should consider clarifying any ambiguities around what is considered to be work carried out within the scope of employment, such as updating policies or the staff handbook around hours and resources etc. e.g. employers may want to make it clear that individuals producing work with help from the company’s materials or on any company resources, despite being used in a ‘non-working’ environment or during ‘non-working’ hours will be considered to be created in the course of employment.
• Employers should ensure that contracts, policies, and job descriptions are kept up to date to avoid a scenario where the type of IP being created or the role or extent of IP creation in the role risks not falling within what could reasonably be expected to be in the course of an employee’s employment.

Now, more so than ever in the age of hybrid working, making the position clear at the outset of any arrangement, and keeping it under regular review will help prevent any future ambiguity and disputes.