Happy New Year and welcome to the January edition of Technol-AG, Addleshaw Goddard's monthly technology update.

This edition covers topics ranging from a new House of Lords report on trade between Great Britain and the EU post Brexit, together with a case law update on an employee's intellectual property rights in work created prior to and during the course of their employment.

European Affairs Committee publishes report on trade in goods between Britain and the EU

The House of Lords European Affairs Committee has published a report: One year on—Trade in goods between Great Britain and the European Union, which examines the extent to which trade in goods between Great Britain and the EU has been supported by the framework provided by the Trade and Co-operation Agreement (TCA). The report, published on 16 December 2021, notes that there is early evidence of an initial reduction in trade with the EU following the implementation of the TCA on 1 January 2021, although there have been signs of some recovery in recent months. The report also acknowledges the difficulty in separating the impact of the COVID-19 pandemic from the end of the transition period.

The European Affairs Committee has called on the Government to prioritise agreement with the EU on sanitary and phytosanitary requirements (relating to human, animal and plant health), and to give professional support to small businesses. The Committee raised a concern in relation to the expiry of the grace period for suppliers' declarations on rules of origin and the new requirement for full customs declarations (introduced on 1 January 2022). The Committee cautioned that there may be short-term disruption at the beginning of 2022, as new requirements are brought in, but this will depend on how the Government decides to enforce the rules. All affected businesses, should think pro-actively about how they will comply with the new requirements to try to reduce business disruption, particularly smaller and medium sized businesses who have less resources to comply with the increased administrative burdens.

Use of public cloud network linked to reduced carbon emissions and energy consumption

Amazon Web Services (AWS) has published a report on how EU businesses can improve energy efficiency and reduce carbon emissions. The report, commissioned by AWS and produced by 451 Research, found that by running applications on the AWS Cloud instead of operating their own data centres, European businesses could reduce their energy use by almost 80%. The report also found that migrating computer workloads to AWS across Europe could decrease greenhouse gas emissions equal to the footprint of millions of households.

Interestingly, Google has a target of 24/7 clean power and Amazon is aiming for 100% renewable energy by 2025

In the current climate, where businesses are under pressure to make their operating model and supply chains more environmentally friendly, cloud computing may be a key area in which businesses can look to reduce their carbon footprint.

Court of Appeal rules on ownership of copyright of software developed prior to the commencement of employment

The Court of Appeal (Civil Division) has ruled in the case of Penhallurick v MD5 Ltd [2021] EWCA Civ 1770 (02 December 2021), which centres around the ownership of copyright in a number of literary works consisting of computer software underlying a tool for the forensic examination of computers. The claimant and appellant (Michael Penhallurick) wrote the software partially before his employment at the respondent business, MD5 Limited, and he subsequently sued for infringement of copyright. The respondent contended that the software copyright belonged to it rather than the appellant, because it was all created in the course of the appellant's employment under a contract of service, or alternatively had been assigned to it by an agreement of November 2008, and that the copyright can therefore be exploited without the appellant's consent. The court ruled in favour of the respondent, dismissing the appellant's claim for copyright infringement. The court also dismissed the respondent's counterclaim, asserting that the appellant had infringed the respondent's copyright in the software by making an adaptation of the software without the consent of the respondent, or by retaining copies of the software.

The case is a useful reminder of the following:

(a) the position under English law is that ownership of copyright created by an employee during the course of their employment will reside in the employer, in the absence of express agreement to the contrary. Even if work is undertaken at home, in personal time and on personal equipment, if this work is the primary task for which the employee is being paid, the employer will own the copyright; and

(b) if employers and employees wish to depart from the above position, they should ensure that they enter into a written agreement, which reflects the parties' intentions regarding ownership of any work created during the course of employment.

We are seeing a growing number of examples where prospective employees are challenging terms in employment contracts regarding the ownership of work created during their employment. This is largely due to many people now having side-projects and, particularly in the IT industry, developing code in their spare time. As a result, we anticipate more issues arising in the future, particularly as the pandemic requires more people to work from home, blurring the boundaries between work and free time.

First global agreement on the Ethics of Artificial Intelligence reached

The United Nations Educational, Scientific, and Cultural Organisation (UNESCO) has announced the unanimous agreement of its member states on the first global standard on the ethics of artificial intelligence (AI) at the General Conference (41st session). The agreement defines the common values and principles that will guide the creation of a legal infrastructure to enable the advantages AI brings to society, whilst also reducing the risks it entails.

AI has long been of interest to the world of business, in terms of its ability to enable more efficient ways of working. However, now that it is clear those capabilities could also pose a threat to society, the development of guidance to ensure it does not harm people is likely to become even more important, as AI becomes a bigger part of our work and daily life. However, the difficulty with seeking to govern the use of AI is that we cannot be sure what challenges will arise, as we are still very much in the early stages of understanding the true capabilities and use cases for AI.

Key Contacts

Susan Garrett

Susan Garrett

Partner, Dispute Resolution
Manchester, UK

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