Posted on Categories employment contract, intellectual property

Are provisions regulating copyrights necessary in employment contracts with staff?

Employers frequently find no need to include provisions in employment contracts that regulate copyrights to work produced by an employee. They rest on the general principle that the employer automatically acquires economic copyrights to work created in the course of performing assigned tasks1 or that the right to them arises to his benefit by law (as in the case of computer software)2. Therefore, regulations in an employment contract are unnecessary. This is obviously true to a certain degree. The devil nevertheless lies in details. If an employer solely rests on statutory provisions, he may not obtain complete security and full rights that could be secured if certain matters were contractually stipulated.

Statutory acquisition = acquisition with limitations

Employers must be aware of the fact that legal regulations on statutory acquisition of employee works are general, not always precise, prone to dispute and, above all, only specify a certain minimum. In other words, the legally guaranteed acquisition of copyrights to works produced by an employee is limited. Obviously, statutory acquisition can be accorded to employees from whom the employer does not expect creativity (e.g., dealing with product packaging). However, if the outcome of employee actions may be individual and original works (e.g., programming, graphics, plans, strategies, social media entries, presentations or reports, etc.), particularly if their creation constitutes the essence of work, it is worth ensuring that a contract does not bypass the issue of copyrights. Statutory limitations and loopholes may indeed be supplemented or specified to an employer’s benefit in an employment contract. This possibility should be exploited.   

“Fifth” point for inclusion in an employment contract

  • First of all, copyright law solely envisions employer acquisition of economic copyright. It does not address matters of personal copyrights, namely the rights of a creator (here: employee) to, for example, the marking of a work with the creator’s first and last name or the right to prohibit other entities from tampering with the content or form of a created work. Personal copyrights cannot be transferred (this link between a creator and a work cannot be broken). However, in order for an employer to exercise personal rights of an employee a relevant stipulation must be included in an employment contract. In its absence, an employer will not be able, for example, to make changes to an employee prepared presentation of workplace activities, because such action could be deemed intrusion into the content or form of a work without consent of the creator (employee). The degree to which this may complicate proper functioning of a workplace requires no elaboration.
  • Secondly, doubts may arise as to whether an employer is entitled to exercise derivative rights to works created by an employee3. Derivative rights, put simply, relate to the exercise and dissemination of modified works. A derivative work may be, for example, translation, modification or adaptation. In order to avoid doubts over the status of derivative rights to employee works, an employer should regulate this matter in an employment contract. Then, the risk that an employer will not be able, for example, to disseminate a logo created by an employee within the framework of work duties, change colour, or add any additional elements, will be minimised.
  • Thirdly, unless an employment contract stipulates otherwise, an employer is obligated to disseminate a work within two years from the date of its acceptance. If this does not take place, the employee-creator can set the employer an appropriate deadline in writing after which rights obtained by an employer revert to the employee-creator. The obligation of dissemination may prove difficult, for example, due to organisational or economic reasons. As well, it is never known when such work may prove useful to an employer. For this reason it is worth either specifying a different and longer deadline for dissemination in an employment contract or even completely excluding this employer obligation.
  • Fourthly, if an employment contract is silent on this subject, an employer only acquires copyrights at the time of accepting a work. Bearing in mind the key significance of work acceptance for statutory transfer of copyrights, an employer should apply procedures on acceptance encompassing, for example, written confirmation specifying the work concerned as well as the time for submitting a statement on acceptance together with the scope of covered rights. Relevant contractual provisions with an employee can simplify this matter or regulated more beneficially to an employer. An employment contract can stipulate an earlier time of employer acquisition of rights than the time when a work is accepted. Moreover, it can specify employee duties within the scope of transfer of works for employer acceptance.
  • Fifthly, an employer acquires economic copyrights by law that arose solely as a result of the performance of work duties within bounds stipulated in an employment contract and joint intent of the parties. In practice, this frequently leads to numerous problems and constitutes a significant limitation, particularly if a contract does not clearly stipulate the scope of duties. For example, if a call centre employee, using a work laptop in the employer’s office during work hours, writes software to manage company clients, economic copyrights remain with the employee. Statutory acquisition of rights does not take place when a work arose only in connection (temporal, locational, etc.) or on the occasion of rendering work or thanks to employer contribution. Transfer of rights to the employer also does not take place if a created work simply has “some kind” of relation to employer operations. A solution can be an employment contract stipulating employer acquisition of economic copyrights to works created by an employee beyond the above narrow parameters, as well as specifying the scope of acquisition in certain areas of exploitation.

The law should not be solely relied upon

The above five are only certain areas that should be secured in a contract with an employee. An employer cannot allow departure from the firm, together with an employee, of “unsecured” or not sufficiently regulated rights to works. In such a situation an employer is exposed to copyright infringement claims that may result, for example, in the need to pay remuneration for use of a work (compensation claims) or need to withdraw from the market, substitute a product/service/work or make changes thereto.

Upon termination of employment the annexing of an employment contract or supplementation of its loopholes with copyright regulations is very difficult in practice. For this reason it is worth introducing appropriate provisions from the very start of employment. This should nevertheless be done skilfully, so as not to raise doubts over the extent to which the law and contract respectively apply.

Lena Marcinoska-Boulangé

1 Art. 12 of the Copyright and Derivative Rights Act (hereafter Copyright Law).

2 Art. 74 point 3 of the Copyright Law

3 According to the prevailing view, transfer of copyrights to an employee work in the scope set in art. 12 of the Copyright Law takes place together with derivative rights to a work. There are nevertheless differing opinions. This matter remains under dispute.