Your employee develops software for his own use to improve his work performance or use by the employer. Who owns the copyright in the software? At a first glance, the answer seems obvious: The Copyright Act 98 of 1978 indeed makes provision for this in section 21 (1) (d) where it states 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 shall be the owner of any copyright subsisting in the work….“.
One may think that this question is only relevant in the context of the software development industry – an appointed software developer must know that the software developed under an employment contract will be owned by the employer. But what happens where your employee is not a “developer” by definition and not appointed as a “developer” under an employment contract? And what if your employee develops the software for his own use in performing his employment duties? And how does one decide whether the software was indeed developed “in the course of employment“? Not always that easy to answer.
How does one decide whether the software was indeed developed “in the course of employment”?
The Supreme Court of Appeal was faced with some of these questions in the matter of King v SA Weather Service (716/2007)  ZASCA 143 (“the King case“). The conclusion will make you as the employer smile. For the employee: unfortunately not good news.
Facts in the King case
Mr King was appointed as a meteorological technical officer in charge of the Upington office of the SA Weather Service. Over a period of time King created some weather related computer programs that he used in the performance of his duties as employee. He was not appointed as a software developer and developing these programs was not explicitly part of his job description. The SA Weather Service also used the programs King developed. King’s case was that:
- he developed the software at his house in his own time;
- the development was not done “in the course of his employment contract“;
- he gave his employer a tacit licence to use the software;
- he remained the owner of the software at all times; and
- his employer infringed the copyright in the programs by its continued use after King terminated the licence.
The crucial issue that the court had to decide was whether King developed the software “in the course of his employment” with the SA Weather Service or not. If so, the SA Weather Service as employer would own the copyright in the programs and if not, King would be the owner.
The Court considered local and overseas judgments on the issue and concluded that it would be: “dangerous to formulate generally applicable rules to determine whether or not a work was authored in the course of the employee’s employment.” The following guidelines should be considered to determine the issue:
- The nature of an employer’s business: in the King case the very nature of the business was to collect, store and process weather data;
- The nature of an employee’s duties: As part of his duties King had to collect and transmit data to the head office and developed the software for this very same purpose;
- The causa between the employment and the software developed: Was it not for King’s employment, he would not have developed the software programs;
- Objective facts of the matter: (a) King prepared reports on his job performance, which included the programming work; and (b) although he initially did the development at home in his own time, he later on spent increasingly more time at the office on the development of the programs.
The Court found that the software was indeed developed in the course of employment and therefore owned by the SA Weather Service.
We suggest parties agree on this issue before the software is developed
Employers must pay careful considerations to the guidelines specified in the King case when their employees intend to develop software for use in their day to day job. On the objective facts of a matter, the outcome may not necessarily be the same as in the King case. It is in both parties’ interest to know exactly who will own software that is developed and we suggest parties agree on this issue before the software is developed or used.