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I plan to engage a contract developer part-time in the UK through his own Ltd. He's currently contracting in the day time for a software company. My project is in a very different area. However, that company's consultancy agreement with him has a sweeping IP assignment clause (outside the office hours, personal equipment, etc).

  • Can that company claim copyright to the code that I jointly produce with him?
  • What remedies could there be for my protection (eg, a written waiver from that company)?
  • What are the risk if I only engage him for "non-coding" tasks (design, advice, code reviews, etc)? Presumably, he won't then produce any software or IP.
  • Design work normally produces design documents, which are subject to copyright, and in general are IP. Code implementing them may be derivative. – David Siegel Jun 7 at 23:35
  • Suppose I produce design docs, requirements, use cases, etc and the contractor implements them in software. Do this mean his code would be derivative and therefore neither he nor his other employer can claim copyright? – Tupolev._ Jun 7 at 23:38
  • That will depend on the exact facts. Such uncertainty is why it is best to spell out who owns what explicitly in a contract. Note that while a derivative work created without permission is an infringement, it still has its own copyright automatically. Note also that not just copyright is involved here. Trade-secret and patent law can be involved, particularly trade-secret – David Siegel Jun 8 at 0:00
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The article "Employers, employees and consultants - who owns what when it comes to intellectual property?" by Laura Harper says that in the UK:

The general rule in relation to IP created by an employee during the course of their employment is that, in the absence of agreement to the contrary, the first owner is the employer. The article says that thsi follows from provision in the Patents Act 1977, the Copyright Designs and Patents Act 1988, the Registered Designs Act 1949, and the Regulation on Community Designs (6/2002/EC).

A key provision here is "during the course of their employment". The article goes on to explain that:

Most IP disputes which arise between an employer and an employee hinge on whether the intellectual property in question has been created 'during the course of employment'. This is determined by a number of factors including whether the work falls within the job description of the employee, whether the work was created during working hours, whether the employee could have reasonably been expected to create the work and whether any agreement exists relating to the work between the employer and the employee. However, it is useful to note that just because a work is created during working hours does not necessarily mean that the intellectual property in that work is owned by the employer (though this may give rise to a disciplinary procedures for misuse of company time, computer equipment etc). Similarly, if work is produced outside working hours but falls squarely within the job description of the employee then it may be that the first owner of that intellectual property in the product of that work is the employer, notwithstanding the fact that the work was created, for example, in the evening.

The article also says that:

As a consultant is an independent party then unless otherwise agreed, all IP created by a consultant will be owned by them and not the company engaging the consultant.

Therefore, it is important that companies ensure that an appropriate consultancy agreement is entered into between the company and the consultant.

It seem clear that absent an agreement to the contrary, a UK employer will own work that is created as part of an employee's job, even if outside of working hours. However, it is not at all clear to me if a "sweeping" agreement which claims all IP, even if outside of hours and in no way related to the contracted job, will be considered valid and enforceable.

In such a case it may be best to obtain a specific agreement with the "daytime" employer (company D, let's say) that D makes no claim on work done by consultant C for second employer S. That has the possible downside of alerting D to the situation, and si something about which S should probably consult S's own lawyer.

  • Why do you think a sweeping agreement wouldn’t be valid if freely entered into? – Dale M Jun 8 at 5:58
  • @DaleM maybe for a similar reason that a slavery agreement might not stand? – Tupolev._ Jun 8 at 14:15
  • @Dale M In some jurisdictions such an agreement would be void as against public policy. In the US state of CA, such an agreement is specifically prohibited by law. I don't know if the UK permits such agreements or not. – David Siegel Jun 8 at 14:29
  • @Tupolev._ slavery is forced servitude without compensation - how is that in any way comparable to developing IP for money? – Dale M Jun 8 at 21:44
  • @Dale Slavery is now widely considered immoral, and is legally prohibited in many places for that reason. A contract in which an employer uses its superior economic power to overreach is not slavery, but some think is similarly immoral, and some jurisdictions prohibit or restrict such contracts on those grounds, and on the ground that it is better for society as a whole to limit an employer's control over an employee. . – David Siegel Jun 9 at 16:07

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