Employers generally believe that they own the copyright in all materials produced by their employees. However, this may not always be the case.

Pursuant to section 35(b) of the Copyright Act 1968 (Cth), an employer may own copyright in works created by an employee if the relevant ‘works’ were created by the employee “in pursuance of the terms of his or her employment under a contract of service…” The meaning of this phrase was recently considered in EdSonic Pty Ltd v. Cassidy [2010] FCS 1008.

In EdSonic Pty Ltd v Cassidy the respondent, Cassidy, developed education and training manuals which were subsequently published and sold by the applicant, EdSonic. The issue of copyright arose when the respondent notified the applicant that it was no longer permitted to use the materials the respondent had prepared.

In finding for the respondent, the Court noted that it was necessary to consider both whether the respondent was an employee of the applicant at the time the relevant works were produced and, if so, whether the works were created by the respondent in pursuance of the employee’s contract of employment – i.e. were the works completed because the contract of employment expressly or otherwise required or allowed it as part of the job, or did the employee create the works “in her own time”?

In determining that the relevant works were not created by the respondent in pursuance of the terms of her employment, the court noted that:

  1. while the respondent was paid a salary for some work, the respondent was paid royalties in relation to the works subject to the claim – not a salary, and
  2. the applicant and respondent treated the works subject to the claim as separate to any other work that the respondent did for the applicant.

This case highlights the importance of ensuring that you are the copyright owner for any works that you consider part of your intellectual property. If you have any concerns that a third party is preparing works for you but may not actually be either an employee or preparing the works in pursuance of their terms of employment, you should take steps to clarify the issue and ensure that you are the ultimate owner of the copyright in such works. This may involve requiring the third party to assign any copyright that may exist to you or specifically varying the employee’s terms of employment. This will remove any ambiguity and provide you with certainty of ownership if it is ever required.