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Inheriting programs for electronic computing machines

Feb. 26, 2020

A program for an electronic computing machine is something technically complex, this is a work that is expressed in a source code form, or this is an easily understandable and explorable subject matter of intellectual property that is simply a literary work. It is not so frequent that one has to deal with such an approach – the program for the electronic computing machine as a set of the rights, which the right holder may dispose of at his own discretion, in particular, to grant the right to the use, to alienate and even to transfer by inheritance. What is the complexity of this subject matter as the unit that is included in an inheritance mass?

In accordance with Paragraph 1 of Article 1259 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.), “The copyright subject matters shall be the works of science, literature and art, regardless of the merits and purpose of the work, as well as of the way of its expression ...

The copyright subject matters shall also include programs for electronic computing machines, which are protected as literary works.”

By virtue of Article 1261 of the C.C.R.F., the copyrights to all kinds of programs 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 the literary works. The program for the electronic computing machine is a set of the data and commands represented in an objective form, which are designated to ensure the operation of the 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 program for the electronic computing machine and the audiovisual images generated by it.

In accordance with Paragraph 1 of Article 1270 of the C.C.R.F., “The author of the work or other right holder shall have an exclusive right to use the work in accordance with Article 1229 of this Code in any form and in any way that does not contradict to the law (an exclusive right to the work), including in the ways specified in Paragraph 2 of this Article. The right holder may dispose of the exclusive right to the work.”

By virtue of Paragraph 2 of the same Article, the ways of the use include the following, namely: reproducing the work, that is, the manufacture of one or more copies of the work or its part in any material form, including in the form of sound recording or video recording, the manufacture in three dimensions of one or more copies of the two-dimensional work and in two dimensions of one or more copies of the three-dimensional work. In this case, recording the work to an electronic media, including recording to the memory of the electronic computing machine is also considered to be a reproduction. In addition, the ways of the use include distributing the work by way of selling or otherwise alienating its original or copies.

The similar legal position was reflected in Resolution of the Intellectual Property Court in case No. А53-938/2016 of 21.08.2017.

A theory is an essential part; let us analyze the following situation in practice. In the Russian Federation, the program under the conditional name “Multifunctional Diagnostic Complex” has been created. On the basis of a license agreement, the right to the use of this program is granted to the company that develops and implements disease diagnosis complexes. According to the conditions of the license agreement, the licensee has the right to correct errors, to make changes to the source code of the program and to modify it in various ways.

After several years of a successful promotion of the program, the right holder being an individual died. After the right holder’s death, according to a notary certificate for the right to inheritance by the law, the property was inherited by the right holder’s daughter. The certificate clearly states that the inheritance consists of “the exclusive right to the “Multifunctional Diagnostic Complex,” which right holder is the testator on the basis of the certificate issued by the Federal Service for Intellectual Property (Rospatent), the state registration in the Register of Programs for Electronic Computing Machines on September 25, 2016 (application No. 2016XXXXXX of September 25, 2015).”

In accordance with Article 1241 of the C.C.R.F., “The transfer of the exclusive right to the result of the intellectual activity or to the means of individualization to another person without concluding an agreement with the right holder shall be allowed in the cases and on the grounds that are established by the law, including by way of a universal legal succession (inheriting, a registration of the legal entity) and at the execution upon the property of the right holder.”

In accordance with the certificate for inheritance, the daughter inherited the exclusive right to the program for the electronic computing machine in the form and in the version in which it had been registered with Rospatent under No. 2016XXXXXX. At the same time, when establishing a scope of protection of the subject matter that was inherited by the daughter, it is necessary to take into account the fact that the different versions of the same program for the electronic computing machine may be registered as the independent subject matters, and when filing an application, the identifying materials should refer only to the particular version of the program, the details of which are specified in the documents submitted to the registration.

In accordance with Paragraph 2 of Article 1270 of the C.C.R.F., “The use of the work, regardless of whether the relevant actions are performed for the purposes of gaining profit or without such a purpose, shall include, in particular: ... a translation or other reprocessing of the work. At the same time, the reprocessing of the work shall be understood as the creation of a derivative work (processing, film adapting, arranging, staging and the like). The reprocessing (modification) of the program for the electronic computing machine or the database shall mean any changes made to them, including the translation of such program or such database from one language to another language, with the exception of the adaptation, that is, the changes made solely for the purposes of the operation of the program for the electronic computing machine or the database on the user’s particular technical facilities or under the control of the user’s particular programs.”

The reprocessing of the program as one of the ways to use it, respectively, is one of the ways to exercise the exclusive right to the program. The reprocessing of the program implies creating the new (derivative) work based on the one that already exists.

The fact that the versions of the program are the independent subject matters of intellectual property, the certificate may be issued for each of them and the right holder may dispose of each of them at his own discretion, is confirmed by the judicial practice. Thus, according to the position set out in Resolution of the Intellectual Property Court of 02.02.2016 in case No. A63-1829/2015, “The defendant’s references that the case files lack the proper proofs of the plaintiff’s exclusive right to program products “1C: Enterprise 7.7 for SQL. Integrated Supply + ITS USB” and “1C: Enterprise 7.7 (network version). Integrated Supply + ITS USB” (these programs are not called by names in the attachments to the agreements on the alienation of the exclusive rights) are dismissed by the courts, indicating to the fact that the said programs are complex (integral), and they consist of the components, each of which has been registered by the former right holder in the Russian Agency for Patents and Trademarks, what is confirmed by the certificates of the official registration of the programs for the electronic computing machines.”

In accordance with the license agreement concluded by the right holder and the licensee, the latter shall render the services for the localization, search and correction of the product defects with making changes to the source code, develop additional components and modify them. The licensee has the right to make changes to the source codes of the product.

As a result of using the program for the electronic computing machine “Multifunctional Diagnostic Complex,” the new versions of the program could have been created. In this regard, it is important to specify in the license agreement the information on the fact, who will hold the exclusive rights to the created versions. However, even if the exclusive rights belong to the right holder, he should dispose not only of his right to the program, but also of the right to the versions of the program. This is due to the fact that the heir can inherit only the property that is written in the certificate. Accordingly, if the exclusive right to the created versions has arisen from the right holder, but the rights to those versions have not been included in the inheritance mass, for which the notarized certificate is issued, then the rights to the versions have not arisen from the heir and the heir cannot dispose of these rights.

And what will happen to the versions of the program? In accordance with Paragraph 87 of Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 No. 10 “On the Application of Part Four of the Civil Code of the Russian Federation” (hereinafter referred to as “Resolution No. 10”), "The right to the reprocessing of the work shall be one of the ways of the use of the result of the intellectual activity and, as such, it shall belong to the right holder, including to the one, who is not an author of the original work, who shall be entitled to reprocess the work (in particular, to modify the program for the electronic computing machine or the database) and to implement the subsequent use of the new (derivative) work independently of the author’s original work.

The right to the reprocessing of the work may be transferred along with other powers within the framework of the transfer of the exclusive right under the agreement on the alienation of the exclusive right in a full scope (Article 1234 of the C.C.R.F.) or granted under a license agreement (Article 1235 of the C.C.R.F.), and it can also be transferred under the grounds established in the law without concluding the agreement with the right holder (Article 1241 of the C.C.R.F.).

In relation to the programs for the electronic computing machines and the databases, the reprocessing of the work (modification) shall mean any changes thereof, except for the adaptation (Subparagraph 9 of Paragraph 2 of Article 1270 of the C.C.R.F., Subparagraph 1 of Paragraph 1 of Article 1280 of the C.C.R.F.). As a result of the use of the program for the electronic computing machine, it may be reprocessed and its new versions may be created. The exclusive right to the reprocessed program can belong either to the right holder of the original program, or to the person, who has made this reprocessing. As a rule, this provision shall be regulated by the agreement.”

Even if the license agreement stipulates that the exclusive right to the reprocessed versions has arisen from the right holder of the original program, the right to the modifications has not been inherited. Accordingly, the heir does not have the right to apply to the court for the defense of the exclusive right to the programs, in respect of which he does not have the rights.

This opinion was confirmed by the judicial practice, namely, in Resolution of the Intellectual Property Court of 09.12.2016 in case No. A56-7695/2016 “The judicial acts are motivated by the fact that the program for the electronic computing machine “The Code for Windows” shall be defended by the law in exactly the manner as the program for the electronic computing machine is specified in the certificate for the registration of the program for the electronic computing machine “The Code for Windows” of 05.01.2004 No. 2004610138, that is, without specifying the particular versions of such program. Each subsequent version of this program shall be a modification of the program for the electronic computing machine “The Code for Windows.” Therefore, the courts’ opinions on the fact that it is the program for the electronic computing machine “The Code for Windows” that is subject to be defended, and not the particular version of such program, shall be legitimate.”

So, it is obvious, that only the program was inherited. But what is to do with the license agreement, as the right holder is no more?

After the death of the right holder of the program for the electronic computing machine, the exclusive right to the program was inherited. In accordance with Paragraph 7 of Article 1235 of the C.C.R.F., “The transfer of the exclusive right to the result of intellectual activity or the means of individualization to the new right holder shall not be the grounds for the change or termination of the license agreement concluded by the previous right holder.”

The above norm of the law allows asserting that the license agreement that is concluded by the right holder is valid both for its heir and for the licensee.

As exemplified by this article, it is possible to imagine the entire importance and significance of determining correctly the scope of the rights and the legitimate disposal of these rights.

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Author of article

Aleksandra Pelikh

Aleksandra Pelikh

Head of Department / Senior Lawyer