When will employees own the copyright in the literary works they produce?

This article reviews the basic principles of copyright law including what is required to create a copyrighted work, and how copyright in protected works is infringed. The article also considers ownership of copyright and, in particular, in what circumstances employers will own the copyright in works created by employees.

 

 

The purpose of this article is to summarize aspects of copyright law that are relevant to determining who owns the copyright in articles (literary works) produced by employees on their own initiative and in their private time. If the work produced is similar to other work previously done for the employer in the course of employment, many legal issues arise, including what it takes to create an original literary work, and in what circumstances copyright will be infringed. Therefore, this article sets out the basics of copyright law, beginning with what it takes to create a copyrighted work, and moving on to consider infringement and ownership issues.

 

Copyright is purely a statutory right, it does not exist at common law. Therefore, the analysis of what is required for copyright to subsist in a literary work, and who owns the copyright, begins with the provisions of the Copyright Act, R.S.C. 1985, c. C-42 [the “Act”]. However, it is also important to understand how courts have interpreted those provisions, and so this article reviews the relevant statutory provisions and judicial treatment of them.

 

This article does not consider the law relating to work produced by employees for publication in newspapers, magazines, or similar periodicals, to which special rules apply.  Another issue which employees should be aware of, and which has not been addressed in this article, is breach of confidence: employees owe a duty of fidelity to their employers to disclose the employer’s confidential information or use it to the detriment of the employer.

 

Section 5 of the Act describes the types of work that may be covered by copyright, and s. 5(1)(a) is the one that applies to written work:

 

5. (1) Subject to this Act, copyright shall subsist in Canada, for the term hereinafter mentioned, in every original literary, dramatic, musical and artistic work if any one of the following conditions is met:

(a) in the case of any work, whether published or unpublished, including a cinematographic work, the author was, at the date of the making of the work, a citizen or subject of, or a person ordinarily resident in, a treaty country;…

 

Generally, the term of copyright protection is 50 years from the end of the year of the death of the author (s. 6), or the last surviving joint author (s. 9).

 

According to s. 5(1)(a), to have copyright protection, the work must be an “original literary work”. The definitions section of the Act (s. 2) states that “every original literary …work includes every original production in the literary … domain, whatever may be the mode or form of its expression, such as compilations, books, pamphlets and other writings…”. Therefore, it is clear that an article is a literary work and would be protected by copyright if it is “original”.

 

The word “originality” has a special meaning in the context of copyright law. Originality does not require the work to be innovative or unique, but the work must be distinguishable from other pre-existing works.

 

Courts have commented on the requirement for originality as follows:

 

In order to be entitled to copyright protection, a work must be original. This concern relates only to the expression of the work, not the idea expressed in the work. The only requirement is that the work must originate from the author, and not be copied.

(British Columbia Automobile Assn. v. Office and Professional Employees' International Union, 2001 BCSC 156 at para. 171 [“BCAA v. OPEIU”]).

 

The word “original” does not in this connection mean that the work must be the expression of original or inventive thought. Copyright Acts are not concerned with the originality of ideas, but with the expression of thought, and, in the case of “literary work”, with the expression of thought in print or writing. The originality which is required relates to the expression of the thought. But the Act does not require that the expression must be in an original or novel form, but that the work must not be copied from another work – that it should originate from the author.

(University of London Press, Ltd. v. University Tutorial Press, Ltd., [1916] 2 Ch. 601 (Eng. Ch. Div.)).

 

To create an original work requires labour, but mere labour does not mean that the work produced is original: copying out a novel by hand would involve significant labour, but the product would not be original. Conversely, a sketch of a character drawn in a couple of seconds by a cartoonist would be protected by copyright if it was original. Whether labour was expended to create the work is relevant, but a work will not be original if it is an imitation of another work.

 

Literary merit is not required for a copyright protection:

 

The sole distinguishing characteristic of a literary work is not its quality as literature or art but simply that it be in print or writing.

(Apple Computer Inc. v. MacKintosh Computers Ltd., [1988] 1 F.C. 673 (C.A.), aff’d (1990), 30 C.P.R. 257 (S.C.C.)).

 

It is possible to create an original literary work by forming a compilation of other literary works. Section 2 of the Act includes the following definition: “literary work” includes tables, computer programs, and compilations of literary works. However, merely cutting and pasting to form a compilation will not result in an original literary work:

 

To secure copyright for [the] product it is necessary that labour, skill, and capital should be expended sufficiently to impart to the product some quality or character which the raw material did not possess, and which differentiates the product from the raw material.

(MacMillan & Co. Ltd. v. Cooper (1923), 40 T.L.R. 186 at 188, 93 L.J.P.C. 113 (India P.C.)).

 

He may have borrowed much of his materials from others, but if they are combined in a different manner from what was in use before…he is entitled to a copyright.

(Emerson v. Davies (1845), 3 Story’s U.S. Rep 768 at 778).

 

[I]t will not create copyright … merely to make a few emendations of the text, or to add a few unimportant notes. To create a copyright by alterations of the text, these must be extensive and substantial… With regards to notes…they must exhibit an addition to the work which is not superficial or colourable, but imparts…a true and real value…

(Black v. Murray (1870), 9 Macph. 341 at 355 (Ct. of Sess.).

 

Copyright may be infringed by appropriating a substantial amount of the material published by the original author, although the language employed by the infringer be different and the material be altered...

(British Columbia Jockey Club v. Standen (1983), 73 C.P.R. (2d) 164 (B.C.S.C.), aff’d (1985) 8 C.P.R. (3d) 283 (B.C.C.A.)).

 

[Where a substantial part has been copied], it is no defence that a defendant may have added original material of his own to an original work [that was] copied.

(C.P. Koch Ltd. v. Continental Steel Ltd. (1984), 82 C.P.R. (2d) 156 (B.C.S.C.)).

 

Thus, an original work will be the fruit of the author’s labour and will not be an imitation of another work, but may reproduce ideas expressed in other works, and quote from other works in a way that adds value.

 

Generally, the author of a work is the first owner of the copyright in the work: s. 13(1). However, an exception to this rule applies to works created in the course of employment. Section 13(3) of the Act states, in part, the following:

 

Where the author was in the employment of some other person under a contract of service or apprenticeship and the work was made in the course of his employment by that person, the person by whom the author was employed shall, in the absence of any agreement to the contrary, be the first owner of the copyright...

 

Three requirements must be met under s. 13(3) to vest copyright in the employer:

 

Section 13(3) only applies to works created by persons under “a contract of service or apprenticeship”, and so does not apply to independent contractors: Massie & Renwick Ltd. v. Underwriters’ Survey Bureau Ltd., [1940] S.C.R. 218. Employees enter into contracts of service, independent contractors enter into contracts for service: 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983 [“Sagaz”]. Whether a worker is an employee or independent contractor depends on the nature of the relationship, not on the labels the parties give the relationship. This determination is a question of employment law that is made in accordance with the parameters set out in Sagaz and discussed in subsequent cases.

 

The scope of the phrase “in the course of employment” is more an issue of employment law than copyright law, and every case will turn on its own facts.

 

No Canadian case provides clear guidance on this point, but the issue has been considered by a number of English cases. In Bryne v. Statist Co.,[1914] K.B. 622 (Eng. K.B.) [“Bryne v. Statist”] an employee was permanently employed on the editorial staff of a newspaper. The employer requested the employee to translate and summarize a speech. This was additional work which the employee did in his own time, and independently of his usual editorial duties. The court held that the employee owned the copyright in the translated summary of the speech because it was not created under the contract of service between the parties – it was created under a separate contract for services.

 

Relying on Bryne v. Statist, Lord Denning came to a similar result in Stephnson, Jordan & Harrison Ltd. v. MacDonald & Evans (1952), 69 R.P.C. 10 at 22 (Eng. C.A.):

 

It must be remembered, however, that a man who is employed under a contract of service may sometimes perform services outside the contract. A good illustration is Bryne v. Statist where a man on the regular staff of a newspaper made a translation for the newspaper in his spare time. It was held that the translation was not made under a contract of service but under a contract for services. Other instances occur when a doctor on the staff of a hospital, or a nurse on the staff of a school, is employed under a contract of service to give lectures or lessons orally to students. If he, for his own convenience, puts the lectures into writing, then his written work is not done under the contract of service. It is most useful as an accessory to his contracted work but it is not really part of it. The copyright is in him and not in his employers.

 

In Beloff v. Pressdram Ltd., [1973] 1 All E.R. 241 (Ch. D.) the court said that whether a work was made in the course of employment is a question of whether the work was created by the employee as an integral part of the employer’s business, or whether it was done by the employee on his own account.

 

In Corp. de l'École des Hautes Études Commerciales de Montréal v. 3178277 Canada Inc., [1998] A.Q. no 2143 (Que. S.C.) (QL) an employee claimed that he owned the copyright in a computer program because he had created the mathematical model of the software in his own personal time. The court held that the employer owned the copyright in the program because the work was subject to the employer’s approval and it was the employer who had taken steps to ensure the program did not infringe any pre-existing copyright. Furthermore, the employee was not at any risk of loss when making the program, and the court did not believe his claim that he worked on the mathematical model in his personal time.

 

A. similar rule regarding ownership of rights applies in patent law i.e. employers own inventions created by employees in the course of employment, but not those created by employees on their own account. In the case of Spiroll Corp. Ltd. v. Putti (1976), 77 D.L.R. (3d) 761 (B.C.C.A.), an employee designed an improvement to a machine used by the employer, and patented the improvement. The employer argued that it should own the rights to the patent because the employee created the improvement while employed. The British Columbia Court of Appeal held that if someone is specifically engaged to create or improve a device, then ordinarily his employer is entitled to claim ownership of any resulting patent. The question is what the employee was engaged to do; if making discoveries and improvements is a normal incident of his contract of employment, then the result of the ingenuity belongs to the employer. The mere fact of employment does not make the invention that of the employer, the question is whether the invention was made in the course of employment.

 

Section s. 13(3) of the Act indicates that the employee may retain the copyright in work created in the course of employment, but that this must be agreed upon. To be valid, assignments of copyright must be in writing signed by the copyright owner, or her authorized agent: s. 13(4).

 

In the context of an employee creating a literary work, it is possible that the contract of employment states (perhaps by incorporating a company policy by reference) that the employer owns the copyright in all writings produced by the employee, regardless of whether they were created in the course of employment. This raises the issue of whether copyright can be assigned in a future work. Section 13(1) of the Act states that “subject to this Act, the author of a work shall be the first owner of the copyright therein.” No other section of the Act, including s. 13(4) which allows for assignment of copyright in existing works, allows for the assignment of copyright in future works. Accordingly, copyright in a future work cannot be assigned under the Act, which is very significant given that copyright is a purely statutory right.

 

Vaver, D., Copyright Law (Concord, Ont: Irwin Law, 2000) states at p. 243 that “in the common law provinces [of Canada], copyright in a non-existent work cannot in law be assigned, any more than one can transfer property in non-existent land or goods”.

 

McKeown, J., Fox on Canadian Law of Copyright and Industrial Designs, 4th ed. (Toronto: Carswell, looseleaf) [“Fox on Copyright”] states at 19:1(f) that the United Kingdom Copyright Act of 1911, which is substantially similar to the current Canadian Act, did not allow for assignment of copyright in a future work. To remedy this, provisions were included in the United Kingdom’s Copyright Act of 1956 and Copyright Designs and Patents Act of 1988 to allow for the assignment of copyright in a future work. Three Canadian studies have suggested that the Canadian legislation be similarly amended to allow for assignment of copyright in future works: Ilsley Commission, Report on Copyright (Ottawa: Queen’s Printer: 1957), Keyes & Brunet, Copyright in Canada: Proposals for a Revision of the Law (Ottawa: Consumer & Corporate Affairs Canada, 1977), and From Gutenberg to Telidon – A White Paper on Copyright (Ottawa: Consumer and Corporate Affairs, 1984). However, these suggestions have not been implemented. 

 

Fox on Copyright confirms at 19:1(f) that no Canadian case has addressed the issue of assignment of copyright in future works. Therefore, assignees may have to rely on their equitable rights that exist outside the Act. Parties who agree to transfer copyright in a future work are treated in equity as promising to assign the future copyright once the future work is created: the promisee becomes an equitable assignee and beneficial owner of the copyright, and the promisor becomes an equitable assignor who, in equity, holds a bare legal title to the work once it is created. The promisee will be able to apply to the court after the work in issue is created for an order compelling the promisor to transfer legal title: Performing Right Society Ltd. v. London Theatre of Varieties Ltd., [1924] A.C. 1 at 13 (H.L.). However, the promisor may be able to rely on equitable defences to resist the promisee’s claim. If the claim in equity fails and the promise is unable to obtain the copyright, she would be left with a contractual claim for damages – if in fact damages have been suffered. 

 

The foregoing indicates that even if employers were to insist on such an onerous contractual term as having the copyright to works created outside the course of employment, it may be difficult to enforce those right to obtain ownership of the copyright.

 

Section 3(1) of the Act sets out what copyright is i.e. exactly what the owner of the copyright has the exclusive right to do.

 

The opening words of s. 3(1) state that the owner of the copyright in a work has “the sole right to produce or reproduce the work or any substantial part thereof…”. Therefore, if work B reproduces a “substantial part” of work A, work B will not be original and there will be no copyright in it. In fact, work B will infringe the copyright in work A if it was created without the permission of the owner of the copyright in work A. Section 27 of the Act provides that it “is an infringement of copyright for any person to do, without the consent of the owner of the copyright, anything that by this Act only the owner of the copyright has the right to do”. Therefore originality and infringement are related issues and two consequences follow from the creation of an original literary work: first, copyright is obtained in the work produced, and second, copyright in other works is not infringed.

 

Given the relationship between originality and substantial reproduction, judicial commentary on substantial reproduction is to some extent a paraphrasing of that related to originality. However, the following excerpts may help clarify the relevant principles:

 

If he does copy, the question whether he has copied a substantial part depends much more on the quality than on the quantity of what he has taken … [the] correct approach is first to determine whether the plaintiff's work as a whole is "original" and protected by copyright, and then to inquire whether the part taken by the defendant is substantial.

(Ladbroke Ltd. v. William Hill Ltd., [1964] 1 All E.R. 465 at 469 (H.L.))

 

To determine whether a "substantial part" of a protected work has been reproduced, it is not the quantity which was reproduced that matters as much as the quality and nature of what was reproduced.

(Robertson v. Thomson Corp., 2006 SCC 43 at para. 38 citing Édutile Inc. v. Automotive Protection Association (2000), 188 D.L.R. (4th) 132 at para. 22 (F.C.A.)).

 

Substantial copying cannot be defined precisely.  The question is whether on a qualitative, not simply a quantitative basis, there has been substantial copying.  It is said to be a matter of fact and degree.

(BCAA v. OPEIU at para.186)

 

It would be risky to confine oneself to determining the number or extent of the borrowings: it is their quality and nature that should be looked at. To enter upon a simple calculation of percentages or proportions in order to determine whether there was an infringement would be to unduly minimize the protection given to copyright. In a copyright matter a part may be as important as the whole and this seems especially relevant when we are considering arrangements of data which are in the public domain.

(Beauchemin v. Cadieux, 10 B.R. 255 at 262 aff’d (1901) 31 S.C.R. 370)

 

Thus, it is difficult to determine how much a work needs to be changed to create an original work, and persuade a court that a previous work was not substantially copied. The law sets out criteria such as “originality” and “substantial part”, but the application of these criteria is subjective:

 

[The court must] decide, by way of a strictly subjective assessment mixed with objective criteria, nature of the product, evaluation of evidence, presumptions, circumstances and context, if the work of the defendants is an original work or if it is only an imitation of the work of the plaintiffs. In other words, it is essentially a question of fact.

(Bilodeau v. 2821061 Canada Inc. (1998), no. C.S. Montreal 500-05-003184-957 (C.S. Que.) (emphasis added)).

 

The subjective element in the evaluation of originality and substantial reproduction make it difficult to predict which way courts will rule on cases close to the line. To some extent, the result will depend on policy: how broad a monopoly should an author have over the work that they produce. Bearing in mind that this article considers the law relating to whether the copyright in articles produced by employees in their own time would be owned by the employer, if the new literary work contained similar content to a work produced by the employee during the course of employment, the court may use the latitude of subjectivity to find that the new work infringed the copyright in the original work.

 

In BCAA v. OPEIU at para. 173, Sigurdson J. summarized what must be proved to establish infringement of copyright: 

 

In order to establish a claim for copyright infringement the plaintiff must establish that the work in which the plaintiff claims copyright is original, that there has been copying from that work and that if there was copying, a substantial portion of the work has been reproduced.

 

What is significant about this quote is that it does not say that the plaintiff must have registered its work, or used the copyright symbol, ©, to succeed in its claim for copyright infringement.

 

As mentioned above, s. 5 of the Act sets out the requirements for creation of copyright: “Subject to this Act, copyright shall subsist in Canada, for the term hereinafter mentioned, in every original literary…work.” Accordingly, to have copyright protection in Canada, one need only produce an original literary work; registration or notice is not required. Because Canada, like most countries, is a signatory to the Berne Convention, original literary works created in Canada will also be protected in other signatory countries. The reason many people use the copyright symbol, or put “Copyright 200X”, on their work is because it is necessary to do so if you want copyright protection in countries that are signatories to the Uniform Copyright Convention and are not signatories to the Berne convention.

 

In order for there to be copying, the copier must have had access to the original work. Hypothetically, if person B totally independently and coincidentally writes an identical article to that previously written by person A, B’s work will not infringe A’s copyright. However, copying from memory will infringe copyright. In Delrina Corp v. Triolet Systems Inc. (2002), 17 C.P.R. (4th) 289 (Ont. C.A.) the defendant moved to a new employer and re-created a computer program he had written for the plaintiff, his previous employer. The defendant did not have the original computer program in front of him when he created the second program. For other reasons there was no breach of copyright, but the court held that “copying” in the law of copyright goes beyond copying from something which is physically before the person who copies, and that it includes copying from memory, even subconscious memory.

 

Employees can create literary works in their private time which they will own the copyright in. However, employees must be aware of the following key issues:

o       Copyright in works created by employees in the course of their employment, belong to the employer.

o       To be created outside the course of employment, a work should be created without instruction from the employer, on the employee’s own time, using the employee’s private resources, and for the employee’s private purposes.

o       To be protected and not infringing, a work created outside the course of employment must be an original literary work and not merely an imitation of work which the employee, or some fellow employee, created in the course of employment.