An employee is appointed to perform certain tasks and to provide required results in exchange for remuneration. Original creation and/or work in any form and the rights the author have over that work is referred to as intellectual property. Intellectual property is protected by copyright or patent or other rights. The rights to intellectual property generally vest in the author thereof.
So, how does it work if an employee creates something original during the performance of duties, is the employee or employer the holder of the rights? A new software program, an article for a newspaper or a broadcast, are all covered under this definition. If the employee creates the intellectual property during the performance of his/her duties, the rights vest in the employer. However, the story does not end here. The employee might be rewarded with shares in the royalties or other forms of recognition. The employer may choose not to take the rights to the creation. The right of ownership to the intellectual property may be assigned to the employee by agreement.
The intellectual property is protected by confidentiality and may not be disclosed, given away, sold or published without the authorisation from the employer. Reasons for the vesting of the ownership of the employer is that the employer did appoint the employee to perform certain duties, to develop and create work, the employer invests in the employee and therefore the employer owns the intellectual property. It must be noted that if an employee did create intellectual property outside of the performance of duties, the right will vest with the employee and employers should not just assume ownership. The employee can still create his/her own creation outside of his scope of work and own the intellectual property.
It is of the essence to always ensure that there is a written agreement assigning all rights to the employer to all intellectual property created by the employee. In the absence of such an agreement, the employee may in certain very few circumstances have ownership of the rights in the intellectual property. A signed written agreement will mitigate against possible issues arising at a later stage during the employment and development of the intellectual property.
An independent contractor will own the rights to the intellectual property created by the independent contractor in terms of a contract. There is no automatic assignment of rights as in the case with an employee during the performance of duties.
The Copyright Act 98 of 1978 “provides protection against the unauthorised copying or reproductions of certain work”. Section 21 (1)(d) of the Copyright Act states – 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“.
The Supreme Court of Appeal was faced, in the matter of King v South African Weather Service 2009 All SA 31 (SCA) (“King case”), with the decision to determine when the intellectual property is developed in the performance of duties, “in the course of employment”. The court concluded that it is “dangerous to formulate generally applicable rules to determine whether or not a work was authored in the course of the employee’s employment.” The court laid out the following guidelines to consider:
- The nature of the employer’s business.
- The nature of the employee’s duties.
- The causa between intellectual property developed and employment.
- Other objective facts.
Good news for the employer, not so good news for the employee. Intellectual property developed during the performance of your duties belongs to the employer until the contrary can be proven.
ABOUT THE AUTHOR
Elzette Engelbrecht is a SEESA Labour legal advisor in Pretoria. She obtained her LLB degree from the University of Pretoria and was admitted as an attorney in the Northern Gauteng High Court in 2009. She started her career at SEESA in 2018.