In a world where content is king, intellectual property (IP) rights rule supreme. So, a key question in the employment relationship relates to when these rights arise and who is entitled to them. This article discusses the what, why, who and when of copyright in employment relationships.
There are a range of IP rights that exist, including trade marks, designs, copyrights, patents and even plant variety rights. For brevity, this article only considers the tensions that may arise from copyrights.
A copyright is a personal property right, which exists in “original works” and affords the owner of these creative works protection from infringement where the copyright owner has various exclusive rights. These include the right to copy the work, issue these copies to the public, display the work or make an adaptation of the work. Depending on the type of work, an individual’s copyright can last for up to 50 years after the death of the creator.
As “original works” is a wide-reaching term, a copyright arises in a broad range of circumstances and can apply to music, writing, software or drawings produced (among other forms of work). For example, this article itself has a copyright and as this was written for the Lane Neave website, it belongs to Lane Neave.
Apart from the creation of the works, nothing further must be done to bring a copyright into existence. It does not need to be registered with the Intellectual Property Office New Zealand (IPONZ), however IPONZ recommends noting the name of the copyright owner, the year the work was created and using the ‘©’ symbol.
Copyrights are a valuable form of IP rights. As a personal property right, these can be licensed or sold for profit and where they exclude the use from others, the owner of a copyright may take legal action against any person infringing this.
Successful legal action can give rise to remedies including damages or an injunction to prevent further infringement.
The default position under the Copyright Act 1994 (Act) is that an employer owns the first copyright in works that an employee has created in the course of their employment. However, a different arrangement can be reached between you and your employer on this matter. Also complicating things is when something is created on commission. In this instance, the person commissioning the work owns a resulting copyright.
Whether something has been created in the course of employment has been the subject of significant consideration. It is accepted that it goes further than just during the time a person is employed; in practice, determining if a work was created in the course of employment has often become a factual question that is dependent on the circumstances and scope of someone’s role.
For example, where a tutor created workbooks to use in her role which were useful to the employer, where that tutor’s employment agreement contained no requirement to create workbooks and she could fulfil her employment requirements without creating these, it was held that these were not created in the course of employment.
Similarly, the copyright in a new invention (falling within the class of products that an employer might sell) went to an employee as designing new products was not in the scope of his employment duties. The employee in question worked in a sales team and the scope of his duties included looking out for new products and considering feedback and practical suggestions from customers.
An employer’s IP rights can be extended from this default position in two ways. The first is by clarifying or extending what an employee’s role is to ensure the creation of original works would be in the course of employment and therefore the CA applies. The second is by agreeing to a robust IP clause that offers broader protections.
Any IP clause must be reasonable – if it is not, it risks being unenforceable. Accordingly, an IP clause that purports to provide an employer with IP rights over all works created by an employee would be considered unenforceable. Other IP protections may be available through confidentiality agreements (for trade secrets) and restraints of trade.
Even if you do not want to vary the default position of the Act, it would be beneficial to set out clear parameters on when and how an employer or employee may own a copyright to prevent misunderstanding and avoid disputes down the track.
Lane Neave has both a specialist employment team and IP experts able to help with any queries you may have about the above, so please do not hesitate to contact us.
 Section 21.
 Abbott v Chief Executive, Whitireia Polytechnic NZERA Wellington WA151/10, 27 September 2010
 Fleming v Fletcher Concrete and Infrastructure Ltd  BCL 161