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Intellectual Property Created During Employment

Intellectual property created during employment relates to employees creating products, documents, and materials which are copyrightable. These goods and products include things such as designs, blueprints, documentation and otherwise.

For more information on what is considered copyrightable under the Copyright Act 1968 (Cth) and the Copyright Regulations 1968 (Cth), see our article Copyright in Australia.

Under the legislation, any material that is either classified as an ‘original work’ or ‘subject matter other than work’ is copyrightable by the author. This includes intellectual property created during employment. However, sometimes the material is not owned by an employer and may be held by the employee.

Work produced in the course of employment

The general rule is that any intellectual property created during employment is owned by the employer. This rule is found under section 35(6) of the Copyright Act.

For something created during employment to be copyrightable and owned by the employer, the following must be satisfied:

  1. The creator is an employee; and
  2. The intellectual property was created during employment.

It is important for both employees and employers to know who owns intellectual property created during employment.

Intellectual property created during employmentWhen the copyright is owned by an employer, the employee has no way of recourse if the copyright is infringed. This is exactly what had happened in the case of Beloff v Pressdram. There, a London Observer employee took The Private Eye to court over copyright infringement. Because the employee obtained intellectual property in their ordinary course of employment with the London Observer, the court held that only the London Observer could take The Private Eye to court over copyright infringement. This was because the employee did not have rights over the copyrighted material.

Who is an employee?

For a worker to be considered an employee under the Copyright Act 1968 (Cth), different factors must be taken into account. This includes the employment status of the worker. It also includes how and when the worker is being paid, hours of work and whether there is holiday pay.

The court in Stephenson Jordan & Harrison Ltd v Macdonald & Evans (1952) 1 TLR 101 considered the question of employee for copyright purposes. It held that the best way to determine whether a worker was an employee or not is to look at whether the worker is an integral part of the business or merely an accessory. The High Court of Australia accepted this United Kingdom case in Stevens v Brodribb Sawmilling Company Pty Ltd.

This means that even if a worker is paid for their services, it does not mean that they are an employee for the purposes of the Copyright Act. If a business exercises discretion and control over the work, it is more likely that the worker would be an employee rather than an independent contractor.

The court in Oceanroutes (Australia) Pty Ltd v M C Lamond [1984] AIPC 90-134 found that independent consultants retain copyright over the work they produce. This is, of course, unless the contract explicitly says otherwise.

Was the intellectual property created within the terms of employment?

Intellectual property created during employment can only be owned by an employer if the intellectual property was created in the course of employment. This means that the employee must have created the intellectual property while they were completing their employed duties. For instance, an employee is employed as a graphic designer. The employee is ordered to design graphics by the employer. All of those graphics would be intellectual property created during employment and the property of the employer.

This question was explored in the case of EdSonic v Cassidy [2010] FCA 1008. In that case, the judge noted that it is not just a question of whether the author is employed but whether what they make is made in furtherance of the contract of employment. The question to ask is whether the employee would make the intellectual property because the contract of employment expressly or implicitly required, or at least authorised, it to be made. In that sense, the court focused on the importance of what was written in the contract of employment.

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