A Briton has lost an appeal bid to claim copyright over software he wrote for his employer while being handsomely paid for doing so – despite saying he wrote parts of it in his spare time.

Michael Penhallurick had his case thrown out by Court of Appeal judges in London yesterday following his failed attempt to assert copyright over his Virtual Forensic Computing (VFC) suite in the High Court last year.

The former South Yorkshire police worker had claimed VFC was licensed to MD5 Ltd and the company infringed that licence when it stopped paying him sums of money he described as licensing fees, two years after he left MD5.

“The parties’ subjective intentions are not relevant to interpretation,” observed judge Sir Christopher Floyd. “As a consequence, it can often happen that the objective construction of an agreement does not align perfectly with the subjective intention of either party.”

Thus, said Sir Christopher, the words “the software developed at MD5 Ltd by yourself and sold as VFC” in a 2008 agreement between the developer and the company legally meant that copyright over VFC was owned by MD5.

As previously reported, Penhallurick had been paid 7.5 per cent of VFC’s annual sales, with those payments continuing for two years after his 2016 resignation. MD5 successfully argued in the High Court that the money was paid for ongoing support rather than royalties or licensing fees. The lack of a single clear contract resulted in the dispute going to court.

Discussing the 2008 agreement’s mention of a “bonus”, the Court of Appeal judge ruled: “I see no reason why that bonus should not be taken as valid consideration for the agreement to assign the copyright in such works as vested in the appellant as a result of his continuing work until the appellant left the respondent’s employment. Section 91 of the CDPA 1988 would then treat such copyrights as vesting in the respondent by operation of law.”

Praising barrister Nicholas Caddick QC’s “ingenious” arguments on Penhallurick’s behalf, Sir Christopher rejected them anyway and ruled in MD5’s favour, with fellow judges Lord Justice Arnold and Mrs Justice Falk agreeing.

His Honour Judge Hacon, sitting in the High Court, had previously found that everyone at MD5 knew Penhallurick was writing VFC for the company, including creating multiple versions of it, and paying him a cut of the sales as compensation for his work.

As we said previously: if you’re a dev working on something of your own, double check your contract of employment. Even if you’re doing it mostly in your spare time. ®

The US Federal Trade Commission wants to block Nvidia’s Arm takeover as it believes the combined company will stifle competition.

Nvidia’s contentious acquisition of UK chip designer Arm continues to face roadblocks as the US Federal Trade Commission’s (FTC) is suing Nvidia to block the deal.

The acquisition, which is now valued at $54bn, has been fighting an uphill battle since it was first announced more than a year ago, first from the UK’s competition watchdog in January 2021 and then from the EU.

Now, the FTC wants to block the acquisition. In a statement, the FTC said Arm’s technology is a critical input that enables competition between Nvidia and its competitors in several markets.

Therefore, it believes the proposed merger would give Nvidia the ability and incentive to use its control of this technology to undermine its competitors, reducing competition and ultimately resulting in reduced product quality, reduced innovation, higher prices and less choice.

The FTC’s bureau of competition director, Holly Vedova, said the proposed deal would allow the combined company to stifle the innovation pipeline for next-generation technologies.

“Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals,” she said.

“The FTC’s lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations.”

Opposition from all sides

The Competition and Markets Authority (CMA) in the UK raised similar concerns in August when it said the deal would require an in-depth investigation.

“We’re concerned that Nvidia controlling Arm could create real problems for Nvidia’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets,” said Andrea Coscelli, chief executive of the CMA.

In October, Nvidia’s planned purchase hit another roadblock from the European Commission launching an in-depth antitrust investigation into the deal at the end of October, with a decision expected by 15 March 2022.

“While Arm and Nvidia do not directly compete, Arm’s IP is an important input in products competing with those of Nvidia, for example in data centres, automotive and internet of things,” said executive vice-president Margrethe Vestager, who is responsible for competition policy.

“Our analysis shows that the acquisition of Arm by Nvidia could lead to restricted or degraded access to Arm’s IP, with distortive effects in many markets where semiconductors are used.”

Despite opposition from several watchdogs, Nvidia has been confident the deal will go through.

“Although some Arm licensees have expressed concerns or objected to the transaction, and discussions with regulators are taking longer than initially thought, we are confident in the deal and that regulators should recognise the benefits of the acquisition to Arm, its licensees and the industry,” Nvidia CFO Colette Kress said earlier this year.

And in a letter to the Financial Times a month after the deal was first announced, Nvidia founder and CEO Jensen Huang said the company will maintain Arm’s open licensing model. “We have no intention to ‘throttle’ or ‘deny’ Arm’s supply to any customer.”

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Assessment and planning by the government relating to risks facing the UK are deficient and “veiled in secrecy”, a report has found.

The 129-page report, entitled Preparing for Extreme Risks: Building a Resilient Society, was produced by the House of Lords select committee on risk assessment and risk planning – a group appointed in October 2020.

James Arbuthnot, chair of the committee, said that while the UK’s risk assessment processes had been praised across the world before the pandemic, the impact of Covid suggested there may be problems.

“It had been advised that if there were to be a coronavirus pandemic, as a country we would suffer up to 100 deaths,” he said. “Over 140,000 deaths later, we realised that we could perhaps have been doing rather better in our assessment and our planning.”

The report – which draws on sources including oral evidence from 85 witnesses, including from the chief scientific adviser, Sir Patrick Vallance, during 29 sessions – looked at the country’s approach to assessing and preparing for a wide range of risks, from chemical warfare to the climate crisis and severe space weather.

“If you ask, what keeps me awake at nights, it is the growing possibility of major disruption due to more and more frequent cyber-attacks,” said Lord Rees, a committee member. “And even more, I worry on a timescale of tens of years about bioterrorism, bioengineered viruses and all that, which are going to be feasible.”

The report’s conclusions point to a number of shortcomings. Among them the committee highlighted a tendency for the government to focus on immediate problems rather than preparing for the long term.

“The likelihood of major risks actually occurring during the term of the government is low,” said committee member Lord Mair, noting as a result there is no incentive to prepare for them.

The committee also flagged concerns over the National Risk Register and the National Security Risk Assessment (NSRA), and called for better processes to categorise risks, including looking at how vulnerable the country would be to certain threats, and better modelling of how risks can cascade – with Arbuthnot noting as an example the impact of Covid on school exams.

Among other issues the report criticised a lack of transparency by the government. “The current risk management system is veiled in an unacceptable and unnecessary level of secrecy,” the report noted, adding that in turn has hampered the country’s preparedness, with frontline responders including local government and volunteer groups struggling to access the information they need.

It is not the first time the government has been accused of secrecy over risk assessment and planning: a report on Exercise Cygnus, the 2016 government simulation of how the country would handle a fictitious “swan flu”pandemic was only made public after a copy was leaked to the Guardian.

Among other actions, the latest report recommends:

• The establishment of an Office for Preparedness and Resilience by the government, headed by a newly created post of government chief risk officer.

• A presumption of publication by the government, and the publication of the content of the Official-Sensitive National Security Risk Assessment except where there is a direct national security risk.

• The publication, every two years, by the government of a brochure on risk preparedness to inform the public on topics including what to do in an emergency.

“[It’s] much better to face some of these issues, having prepared for, and practised for, and exercised for them in advance rather than doing them first in the heat of battle,” said Arbuthnot

Arbuthnot added the Covid pandemic had offered the chance to “address a public that is ready to be addressed. And people have proved that they’re up to it.”

Prof David Spiegelhalter, chair of the Winton Centre for Risk and Evidence Communication at Cambridge University, and who contributed evidence to the report, welcomed its publication.

“It’s extraordinary that the National Risk Register does not get any public promotion or media coverage, and I welcome the committee’s recommendation to radically improve the communication with the public about the risks they face,” he said. “These vital issues deserve to be widely known and discussed.”