Who owns Your Copyright Work?

Copyright Law

In an employment setting, who owns a copyrighted work? Is it the employer or the author of the work/ employee? To find out more, let us briefly look at the case of DNC Asiatic Holdings Sdn Bhd & Ors v Honda Giken Kogyo Kabushiki Kaisha & Others Appeals to obtain an answer on this issue.

Brief facts of the case

Honda Giken Kogyo Kabushiki Kaisha (“Honda”) a Japanese automobiles company, brought an action for copyright infringement against DNC Asiatic Holdings Sdn Bhd, Demak Marketing Sdn Bhd, Demak Motor Corporation Sdn Bhd, MForce Bike Holdings Sdn Bhd and Malaysian Formula Bikes Sdn Bhd (collectively known as “DNC and Others”) for allegedly create, manufacture and sell motorcycles that are similar to that of Honda (the EX-5 or EX-5 Dream variant) known as Demak and SYM E-Smart (“the said motorcycles”). 

Honda (amongst others) claimed that there exists a copyright on the design of those motorcycles and the design of the motorcycles belonged to them as it was created by an employee of theirs (Mr. Koizumi) during his tenure with Honda from 1977 until 2014. DNC and Others contended otherwise- they claimed there was no copyright on the motorcycle design and that the first motorcycle was created independently by another company (Bally Transportation, Research and Design Corporation), while the latter was created independently based on a Vietnamese motorcycle (Sanda Boss) that was launched in 1994.

The court’s decision

The High Court found that the motorcycle design was indeed copyrighted by Honda. However, the High Court also noted that DNC and Others did not commit any copyright infringement against Honda. On appeal by both parties (in different appeals) for different reasons, the Court of Appeal agreed with the High Court’s decision in part- the Court of Appeal noted that if indeed the motorcycle design lawfully belongs to Honda, the Court of Appeal would then (unlike the High Court who found that there were no infringement of copyright) have to decide whether DNC and Others have infringed upon Honda’s copyrighted design.

The court’s rationale

The court noted that:

1. Based on the facts of the case, during Mr. Koizumi’s employment with Honda, Mr. Koizumi was involved in various lawsuits as Honda’s witness against other companies in similar lawsuits i.e. when Honda needed to prove its ownership claim in respect of copyright over the motorcycle’s design. One such instance occurred in Malaysia in the High Court case of Honda Giken Kabushiki Kaisha v Allied Pacific Motor (M) Sdn Bhd & Anor. In that instance, the High Court held that Mr. Koizumi was indeed the owner of the motorcycle designs. The court noted that that fact itself was pivotal to Allied Pacific Motor’s case as well as in Honda’s current claim against DNC and Others; and

2. Under the law, the works of the employee are deemed to belong to the employer. This can be found in section 26(2) of the Copyrights Act, which reads as follows:

“Notwithstanding subsection 27(6), where a work- 

(a) is commissioned by a person who is not the author’s employer under a contract of service or apprenticeship; or 

(b) not having been so commissioned, is made in the course of the author’s employment, 

the copyright shall be deemed to be transferred to the person who commissioned the work or the author’s employer, subject to any agreement between the parties excluding or limiting such transfer.”

In conclusion, unless there is an agreement between the employer and employee on the ownership of the employee’s work/ copyright work- an employee’s work will automatically belong to the employer.