Who owns the IP for some software that I created in my spare time? Employee or Employer?

Question

I am employed as a designer in the UK by a UK employer. I do not work for a software company. On my own machine on weekends I created my own software that I believe my employer would benefit from. I pitched my software to my employer with the intention that my employer could use it for free, support with its future development, and share revenue from future external sales. My contract with my employer however states the following:

"Any process or invention which is discovered or made by an employee or intellectual property which arises during the course of their employment is, and shall be, the absolute property of the Company...."

This aligns pretty well with Copyright, Designs and Patents Act 1988 (legislation.gov.uk) which states:

(1)The author of a work is the first owner of any copyright in it, subject to the following provisions.

(2)Where a literary, dramatic, musical or artistic work [F1, or a film,] is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary.

So whether the IP of this software belongs to me or my employer appears to boil down to the definition of "during the course of their employment".

Based on Mei Fields Designs Ltd v Saffron Cards and Gifts Ltd [2018], the following tests where used which fell in favour of Mei's employer.

• (a) the terms of the contract of employment;
• (b) where the work was created;
• (c) whether the work was created during normal office hours;
• (d) who provided the materials for the work to be created;
• (e) the level of direction provided to the author;
• (f) whether the author can refuse to create the work/s; and
• (g) whether the work is ‘integral’ to the business.

In my case, my answers to the above would be as follows:

• (a) In line with England and Wales law.
• (b) At home
• (c) Outside normal office hours
• (d) I provided all materials to carry out the work
• (e) I had no direction from my employer
• (f) I chose to do this work, and initially didn't tell my employer about it so there was nothing to refuse.
• (g) It would be useful for the business. I wouldn't say it was integral (essential or fundamental)

Based on the above, who owns the software, me or my employer?

Answer 1

Based on the contract language quoted in the question, and the facts stated there, it would seem that the employee owns the copyright on the software. It would seem that the software was not created "during the course of employment."

However, when the employee offers it to the employer free of charge, the employer may well want to own the copyright and any other related IP. The employer might want the employee to sign an agreement transferring the copyright. Or the employer might simply treat the software as belonging to the employer. Asserting and enforcing the copyright against the employer might be difficult. Insisting on even a token payment would help establish thst the copyright belongs to the employee, or gettign the employer to sign an acknowledgement of the ewmployee's copyright would have a similar, bnt even stronger effect.