A Work Life Balance? – How software produced at home can still be considered ‘during the course of employment’

In the recent case of PQ Systems Europe Ltd & Anor v Aughton & Anor[1], we saw how the age of hybrid working muddies the waters on what is done ‘in the course of employment’. In that case, the Court found that the copyright in a piece of software belonged to the Claimant company, as it was written during the course of the Defendant’s employment, even though the Defendant claimed to have created it at home during his free time. The facts showed that the Defendant had written the software code at home during his evenings and weekends, and that the software was of no direct use to the employer, but nonetheless the employer made a successful claim to it. Interestingly, the Defendants represented themselves without a legal team.

Background

This case concerned a dispute over intellectual property rights in the field of computer software development for quality assurance. At the material time, the Claimants, PQ Systems Europe Ltd (‘PQE’) and Productivity-Quality Systems, Inc., were both involved in this business, in particular statistical process control (‘SPC’) software. The first Defendant, Mr. Jeff Aughton, was employed by PQE from 1989 as a software developer and was later appointed as a director. The second Defendant was the corporate vehicle that the First Defendant used to exploit the software that he had written. The central issue was whether software written by Mr. Aughton after he left PQE was copied from software owned by the Claimants[2].

While Mr. Aughton was an employee of PQE until 2015, he was given the task of developing a charting module (written in a programming language known as VB.NET), called CHARTcore, or sometimes PQChartCore. Another employee was given the same task but in a different language, Windows Presentation Foundation (‘WPF’). When both modules were completed, PQE decided to only progress with the WPF version.

Mr. Aughton left the project, and was designated other work to do. However, he kept working on the SPC program in VB.NET, and he claimed to have spent 50 working days of his own time on such. Mr. Aughton called this program ‘ProSPC’. Mr. Aughton subsequently left PQE and started work on some software he claimed was new, which he called InSPC (referred to as ‘InSPC v1). Later he rewrote InSPC v1 in a further programming language, C# (‘InSPC v2’).

The Claimants discovered Mr. Aughton’s new program when it was demonstrated by a US firm, CyberMetrics in 2017, against which they brought proceedings in the US which were later settled. The Claimants then brought proceedings in the UK against Mr. Aughton and his corporate vehicle for copyright infringement.

Party submissions

The Claimants argued that the copyright in ProSPC was owned by PQE, as it was written during the course of Mr. Aughton’s employment. This was supported by the disciplinary hearing notes from April 2013 concerning an investigation into Mr. Aughton relating to another matter, which recorded admissions that routines from PqChartCore, a software owned by the Claimants, were used when writing ProSPC, and an acknowledgment that the code in ProSPC belonged to the company[3]. The Claimants further contended that ProSPC was copied when writing InSPC v1 and InSPC v2, either directly or indirectly via InSPC v1, amounting to infringement of copyright[4]. Evidence in support of the copying argument was provided by expert comparison of decompiled object code but the Claimants also relied on circumstantial evidence[5]. This was due to the fact that Mr. Aughton had deleted the source code for ProSPC and InSPC v1[6].

The Defendants argued that the copyright in ProSPC belonged to Mr. Aughton, as it was written as a hobby project, outside the course of his employment with PQE[7]. Mr. Aughton wrote it at home, during his own time (evenings and weekends). He denied copying from ProSPC when writing InSPC v1 and InSPC v2. It was clearly important to the judge’s findings that because between 2007 and 2012 (during at least part of which time Mr. Aughton was working on ProSPC) there was no clear delineation between personal and work matters in either respect, and this blurring is a factor that clearly has consequence.

Decision

The court determined that the copyright in ProSPC was owned by PQE, as it was written during the course of Mr. Aughton’s employment[8]. The Court further concluded that Mr. Aughton infringed the copyright in ProSPC when he wrote InSPC v1 and InSPC v2[9].

Reasons for judgement

The Court found Mr. Aughton’s admission that he used source code from PqChartCore when writing ProSPC persuasive but not conclusive to say that he wrote ProSPC in the course of his employment[10]. The judge was not convinced by the argument that Mr. Aughton was working on ProSPC during his own time because he was working on it during evenings and weekends. Despite Mr. Aughton’s contract saying his work hours were 8:30am to 5:00pm, Monday to Friday, he mostly worked from home, and was routinely working on PQE matters during evenings and weekends[11]. PQE had also provided at least some of the materials that Mr. Aughton used to write ProSPC, including Visual Studio and other resources licensed by PQE[12]. Writing SPC software was a core part of PQE’s business, and even though ProSPC was not of use to PQE (its products being developed within a different environment), ProSPC could still be of value to PQE’s competitors, and thus PQE had an interest in preventing the code in ProSPC being disseminated[13].

The Court found that Mr. Aughton wrote ProSPC in the course of his employment by PQE, and in part it did so because there was no clear delineation between his home and work life. Accordingly, PQE was the first owner of the copyright in such under s11(2) of the Copyright, Designs and Patents Act 1988. There was no assignment or licence of such to Mr. Aughton, so his use of ProSPC was infringing.

When he left PQE, Mr. Aughton retained ProSPC and had access to it throughout the period that he wrote InSPC v1. While the source code for each had been deleted, the judge found the Clamaints’ expert, Dr. Young, to be convincing on the question of copying. Dr. Young split the decompiled code for each of ProSPC and InSPC into ‘enums (a list of data included in source code, often with corresponding reference numbers assigned to them), methods (defined procedures) and properties (values which can be obtained, or set)’[14]. One of these enums ‘ChartTypeEnum’ was almost entirely replicated (including the numbering and ordering of charts, which is usually arbitrary[15]) from ProSPC to InSPC v1 (although the latter including other chart types as well)[16]. Dr. Young knew of no technical explanation of why this should be,[17] which implied that the latter was copied from the former. The judge agreed. He also drew an adverse inference against Mr. Aughton for deleting the source code in ProSPC and InSPC v1,[18] and found that InSPC v1 was an infringement of the copyright in ProSPC[19].

The judge accepted that ProSPC was deleted when InSPC v1 was finished, but prior to InSPC v2 being written in C#. This meant that any copying in InSPC v2 would have to be indirect copying (i.e. copying of InSPC v1)[20]. The change of programming language meant that a similar comparison on the decompiled code could not be undertaken[21]. There wasn’t sufficient evidence to establish whether Mr. Aughton had used an automatic translator to translate the VB.NET into C#, or whether he had done so manually, but in either case, the likelihood was that InSPC v2 was based on InSPC v1[22], as the latter did not make use of some C# features and used some features that were viable in VB.NET but did not function in C#[23]. Therefore, the judge found that InSPC v2 copied a substantial part of InSPC v1, which was a further infringement of the Claimants’ copyright[24].

Commentary

The blurring of work and home has increased dramatically in the age of hybrid working and as such working out when the code was written ‘during the course of employment’ may find that the time of day and being at home are less important factors than once they were. In these post-pandemic times, the boundaries between work-life and home-life have become increasingly malleable, with hybrid and remote working (and the accompanying flexibility of hours) now the norm in many service industries (despite the relevant written contracts often actually stating office-work and set hours). If an employee wishes to be certain about a hobby project that they are working on, they should be open to their employer about what it is, because without transparency they may find it hard to demonstrate the work was done at home and not as part of employment.

From an employer’s perspective, this case shows that an employee’s work using employer resources can come under the ambit of ‘during the course of employment,’ no matter where, or what time, the employee was using those resources to create the new IP work. This is likely welcome news for employers. This case therefore changes the way we should look at the factors that were previously referenced to decide whether the work was made during the course of the employment:

(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.[25]

Understanding entitlement and the distinction of when an employee is working in the course of employment or not is therefore more challenging. We are happy to discuss real life situations with anyone who is uncertain about whether their employee is working on a true side project or not.

[1] [2023] EWHC 581 (Pat) (22 March 2023)

[2] Ibid. at 5.

[3] Ibid. at 51.

[4] Ibid. at 31.

[5] Ibid. at 25.

[6] Ibid. at 21.

[7] Ibid. at 20.

[8] Ibid. at 76.

[9] Ibid. at 151.

[10] Ibid. at 67.

[11] Ibid. at 70.

[12] Ibid. at 74.

[13] Ibid. at 146.

[14] Ibid at 81.

[15] Ibid. at 84.

[16] Ibid at 83.

[17] Ibid. at 97

[18] Ibid. at 109.

[19] Ibid. at 111.

[20] Ibid. at 112.

[21] Ibid. at 113.

[22] Ibid. at 149.

[23] Ibid. at 121.

[24] Ibid. at 150.

[25] MEI Fields Designs Ltd v Saffron Cards and Gifts Ltd [2018] EWHC 132 (IPEC) at 42.