Tuesday, August 11, 2009

In terms of section 21(1)(a) of the Copyright Act 98 of 1978 the ownership of the copyright in a work vests in the author of such work. One exception, which applies to computer programs, among others, is that where a work is made in the course of the author’s employment by another person under a contract of service or apprenticeship, that other person (the employer) is the owner of any copyright subsisting in the work.

In a recent judgment in the matter of King v The South African Weather Service 2009 (3) SA 13 (SCA) dealing with the ownership of copyright in certain computer programs, alleged by the Weather Service to have been created by Mr. King in the course of his employment, the Supreme Court of Appeal had occasion to pronounce on the meaning of the phrase ‘in the course of employment’. It held that “the term is unambiguous and does not require anything by way of extensive or restrictive interpretation. A practical and common-sense approach directed at the facts will usually produce the correct result.”

Writing on behalf of a unanimous bench Harms ADP held that the fact that an employee creates a work at home (or even during office hours at the premises of her employer) is only one of the factors that have to be taken into account in answering the question whether the work was made in the course of the employee’s employment. The thrust of the decision was that for purposes of section 21 of the Copyright Act the answer to the question remains primarily a factual issue that depends not only on the terms of the employment contract, but also on the particular circumstances in which the work was created. In other words the phrase ‘in the course of employment’ in section 21 is not limited only to tasks which are included specifically in terms of the provisions of the employment contract. This conclusion was justified on the basis of the principle that the scope of employment may change explicitly or by implication. In the result the court found in the particular circumstances of this case that the computer programs in issue were created by Mr. King in the course of his employment, notwithstanding that creating computer programs was not part of his job description according to his employment contract. The copyright subsisting in the programs therefore belonged to the Weather Service.

Some of the key evidence before the court was that a job evaluation investigation concluded some two years prior to the termination of Mr. King’s employment, and with which Mr. King had agreed at the time, stated that he was responsible for system development and programming. The estimate in terms of the evaluation was that Mr. King was at that time spending 50 per cent of his time on system development and programming. Quarterly reports prepared by Mr. King about the performance of his duties stated that the major component of his work was programming. Some of the other central evidence was that the programs were designed to fit with and become a part of the employer’s own system; the employer exercised the right to approve the programs before they could be implemented in the system; the programs were directly related to the employer’s business and were to the benefit of the employer; some of the programs were created specifically at the instance and for the use of the employer; and they were not created for external use by others, but were purely work related. The court concluded from all of this that, but for his employment with the Weather Service, Mr. King would not have created the programs and therefore that his employment was the primary cause of the programs.

Quite ironically it appears that none of the considerations which were decisive against Mr. King would apply in the case of a moonlighter who uses his employer’s time and resources, at the employer’s premises, to develop computer programs which he seeks to sell for his own benefit. The finding that the fact that an employee creates a work at home (or even during office hours at the premises of her employer) is only one of the factors that have to be taken into account appears to lend itself quite nicely as a defense in favour of the moonlighter. It is, however, not only the moonlighter that employers (primarily those in the information technology sector) would need to be concerned about. The ruling that a factual analysis that goes beyond the provisions of the employment contract must be conducted in each case also means that even a very well drafted agreement may not provide sufficient protection. The possibility of having to resort to the courts in each instance will be unwelcome to most.

What is clear from the judgment is that Mr. King’s claim that he was the copyright owner was undone, to a large, by the evidence contained in the progress reports and job evaluation investigation. The outcome might have been different if it were not for those reports. It is therefore recommended that if the provisions of an employment contract cannot secure the desired outcome then, as in the King case, progress reports or similar records may be employed generally to tip the scales in favor of the employer.  The result is that it can no longer be left up to the employee to notify the employer of, or to maintain records of, or keep all material relating to or evidencing the creation of software or computer programs in the course of employment.

It would be particularly insufficient to require, baldly, that such records shall be delivered to the employer on termination of employment or on demand by the employer. Each employer must formulate a comprehensive policy to periodically record the evidence and take a lead role in ensuring that the policy is implemented. If this is done diligently, the evidentiary burden on an employer would be reduced substantially in the event of a dispute regarding the ownership of copyright in programs created in the course of employment. The employees’ knowledge that the evidence is carefully recorded could also reduce the likelihood of such disputes arising in the first place.