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Practical difficulties in the implementation of exclusive rights to computer programs created in the form of a work made for hire

June 3, 2019

The aspect of the emergence of the rights with respect to the programmes for electronic computing machines, when a developer is the employee of the Customer Company is extremely relevant.

At the same time, this issue, at the first glance, is not extremely complex and it is known to the Customer. They are aware that if the job agreement is available, the product created will be a work made for hire, and they do not consider it is necessary to be concerned about the registration of the rights or the creation of additional documents in the course of the development of the software product.

According to Article 1261 of the Civil Code of the Russian Federation: “The copyrights to all kinds of the programmes for electronic computing machines (including to operating systems and software complexes), which can be expressed in any language and in any form, including a source text and an object code, shall be protected in the same way as the copyrights to literary works. The programme for an electronic computing machine is a set of the data and commands represented in an objective form, which are designated to ensure the operation of electronic computing machines and other computer devices in order to obtain a certain result, including the preparatory materials obtained in the course of the development of the programme for an electronic computing machine and the audiovisual images generated by it.”

The programmes for electronic computing machines are the results of intellectual activity, and the citizen, whose creative labour has created such a result shall be recognized an author of the result of intellectual activity.

The Intellectual (copyright) rights to the programmes for electronic computing machines include, among other things, the exclusive right. The exclusive right is, in some way, an analogous to the property right to things and it consists in a possibility of its holder (right holder) to use the work in any form and in any manner not contrary to the law and to allow or prohibit its use to other persons (according to Paragraph 1 of Article 1229 of the Civil Code of the Russian Federation).

In the case, when the programme for an electronic computing machine or the database is created under an agreement, the subject of which has been its creation (by the assignment), the exclusive right to such programme or such database shall belong to the Customer, unless otherwise is stipulated by the agreement concluded between the Developer and the Customer.

However, in practice, the issue of ownership of the right may be not only ambiguous, but it may lead to much more complex situations for the Developer.

So, one large company has addressed to us, in which staff a group of developers had worked for a long time. As a result of many years of cooperation, a software and hardware complex was created, which was successfully used by some of their clients at large energy facilities.

However, after a certain time, a conflict between the Customer and the IT team occurred, as a result of which the developers left the company and organized a separate firm taking with them all source codes of the programmes included in the software and hardware complex (SHC).

As it was difficult afterwards for the Developer to maintain and upgrade the complex independently, they concluded a civil law agreement with the previous developers. Then, in the course of upgrading the SHC, new software products appeared, while the developers themselves, being much more knowledgeable specialists, were registering immediately the additional copyrights and the property rights.

As a result, the Customer Company addressed to us for a help at the stage, when it was on the edge of the situation, in which it had almost lost its exclusive rights to the SHC, since as a result of “updating and upgrading,” all the SHC elements on the basis of the old source codes had been replaced by the other ones without any significant changes, the authors and holders of the property rights to which were the individuals, who had nothing to do with the Customer Company.

Based on the analysis of the situation and the documents, it turned out that it was not as easy to prove and restore the ownership of the exclusive rights to the SHC elements as it seemed.

As a result, justice prevailed, however, it is necessary to take into account the fact that in practice, the issue of the emergence of the copyrights and the property rights to the programmes for electronic computing machines is not as simple as it seems.

In some cases, the issues emerge – who will be an author of the module for the programme for an electronic computing machine: the developer himself, the specialist, who writes the performance specifications, the developer of the user manual or the group of the authors?

Or, should the Customer pay any additional remuneration to the author, or is it possible to be confined to the payment of a wage?

The employees, who are directly developing the programme for an electronic computing machine must be definitely recognized its authors. The rights to the result of intellectual activity created by the joint creative labour of two or more citizens (co-authorship) shall belong to the co-authors jointly (Paragraph 4 of Article 1228 of the Civil Code of the Russian Federation). At the same time, the citizens, who have created the work by their joint creative labour shall be recognized the co-authors regardless of the fact, whether such work forms a seamless whole or it consists of the parts, each of which has independent significance (Paragraph 1 of Article 1258 of the Civil Code of the Russian Federation). It should also be taken into account that, by virtue of Paragraph 1 of Article 1228 of the Civil Code of the Russian Federation, the citizens, who have not made a personal creative contribution in achieving such a result, including those, who have rendered only technical, consulting, organizational, or financial support or assistance to its author, or who have only assisted in registering the rights to such a result or its use, as well as the citizens, who have exercised supervision over the fulfillment of the corresponding works, shall not be recognized the authors of the result of intellectual activity. Thus, the IT-developers should be recognized the authors.

At the same time, rendering support or assistance to the author does not exclude a possibility of making a creative contribution. Therefore, the experts, who have been preparing the performance specifications may well be recognized the co-authors. This position is confirmed by the decision of the IPC in case No. CIP-136/2015 of November 26, 2015.

So, in the light of the analysis of the above conflict situation, it should be noted that, in practice, the fact that the work made for hire has been created by the particular employee can be confirmed, in combination with other evidence, by the duty to write the programme in the author's job description, the fact of its inclusion in the individual development plan, the inclusion in the development plan signed by the employer etc. The employee's assignment to create the work made for hire can be formalized by an order and/or a duty assignment, or by an additional agreement concluded between the employee and the employer.

We pay special attention to the need for the availability of these documents. One should not rely on the job agreement considering it a panacea for further controversial situations. It is necessary and highly desirable to sign the additional documents specifying the creation of the product, the availability of which will allow the Customer Company excluding in future the prospect of the long judicial proceedings in order to prove the emergence of its property right to the programme for an electronic computing machine.

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Author of article

Natalya Nazarova

Natalya Nazarova

Agreement’s Lawyer