Case No. IP-2018-000200

56. “11. (1) The author (2) ” 57.58.It requires a multi-factorial assessment. My attention was directed to a nonexhaustive list of matters which may be considered, helpfully set out in the judgment of David Stone, sitting as an Enterprise Judge in Mei Fields Designs Ltd v Saffron Cards and Gifts Ltd [2018] EWHC 1332 (IPEC): (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.” 59.The final version of the 12-week contract between Mr Penhallurick and MD5 has not survived. An email exchange in early October 2006 between Mr Green and Mr Penhallurick shows that there was such a contract, beginning on 6 November 2006. It was common ground that the terms of this agreement were retrospectively replaced by those of the 2006 Agreement. 60.Clause 2 of the 2006 Agreement, headed “Job Title and Duties” states: “You are employed as a Computer forensic analyst, reporting to the Director. Your role will involve carrying out a range of duties relating to computer and mobile phone analysis. This includes, but is not limited to, forensic analysis of computers and other data storage equipment including mobile phones. Due to the nature of our business you will be expected to be flexible in your approach and undertake other duties as may be reasonably required of you commensurate with your position and capabilities. This may involve a change in job title, duties and, or, reporting online.” 61.62.63.Returning to the scope of Mr Penhallurick’s duties under the 2006 Agreement, there is no doubt that while employed by MD5 he wrote the Third Work and compiled the Fourth Work with the knowledge and encouragement of Mr Green and Mr Boyd and with the intention that if all went well the VFC software would be marketed by MD5. Mr Penhallurick described the creation of the Third Work in his second witness statement: “39. During the period from late-January to mid-March 2007 I spent almost every waking hour of my personal time developing VFC functionality at home whilst adding software and hardware-based security protection at work and ensuring that it worked against real world data. … I would often test a piece of code at work and, when it didn’t function entirely as expected, I would … then go home and code; oftentimes it was commented on at work that the development was coming on at a rapid pace. … 41. … I used my own personal computer system at work for any coding work and only copied the compiled code to the work machine for testing. I routinely copied the source code onto a USB memory stick and transported it home to copy back onto my own machine.” 64.Mr Penhallurick was challenged about this in cross-examination and maintained his position. 65.In argument there was a tendency to run down the list of factors in Mei Fields and suggest that the answer to whether the Works were created in the course of Mr Penhallurick’s employment depended on which way the majority of the factors pointed. In my view this is not that sort of case. 66.There can be no doubt that making VFC software was the central task for which Mr Penhallurick was being paid by MD5 from late January to March 2007. That is a very strong indication that the Third and Fourth Works were created in the course of his employment. It seems that Mr Penhallurick took on the task with enthusiasm, to the extent that he took his work home some of the time. His staff annual appraisal of August 2007 suggests that much of the work must have been done during working hours at MD5. But whatever the exact proportion done at home, it does not displace the strong and primary indication that it was work done in the course of his employment. The fact that an employee does work at home is relevant to the question of whether the work is of a nature to fall within the scope of the duties for which he is paid but it may or may not carry much weight. Where it is otherwise clear that the work is of such a nature, in my view the place where the employee chooses to do the work will not generally make any difference. The same applies to the ownership of the tools the employee chooses to use, here sometimes Mr Penhallurick’s own computer system. If it is clear that the employee is being paid to carry out a task as agreed with his employer, he may choose to use tools supplied by his employer or his own tools; either way, the task is carried out in the course of his employment. 67.It is probable that Mr Penhallurick wrote a small part of the VFC software before he was given permission by MD5 to devote all or the bulk of his time to writing it and that he did this early work at home on his own computer. But he had already by then demonstrated the manual version to MD5 with an eye to its being exploited by MD5. He must have contemplated that software which made the method automatic would be shown to and exploited by his employer to their mutual benefit. I have also accepted Mr Green’s and Mr Boyd’s evidence that after they were shown the manual VFC they discussed the creation of software with Mr Penhallurick. No precise date was given for this discussion, but since there was a consensus that the demonstration of the manual version was in November or December 2006, it is likely that the discussion took place before the end of December 2006. Work done by Mr Penhallurick on VFC software at the end of December 2006 would have been work which he understood to be integral to his duties as an employee of MD5. 68.69.In fact, the relevant considerations are the same for the Fifth to Seventh Works. All were created by Mr Penhallurick with the knowledge and encouragement of MD5 and all were directed to making and improving the VFC software product sold by MD5. Mr Penhallurick was paid by MD5 to carry out that work. The first owner of the Fifth to Seventh Works was MD5. It is convenient to consider the Eighth Work, the user guide, separately below.