Transfer of economic copyright – what should be borne in mind?

What are economic rights?

Firstly, as a reminder – economic copyright is nothing other than the exclusive right of the creator of a given work to use the work, decide on its distribution, dispose of the work as they see fit, and receive remuneration for it. Anyone wishing to use the work must first obtain the consent of the creator or their legal successor.

Failure to properly transfer the rights to the work and to meticulously describe the manner and conditions under which the purchaser may use the work may give rise to numerous legal problems, which in turn will often hinder the purchaser’s ability to achieve their business objectives. For if we draft the provisions regarding the transfer of copyright incorrectly or too broadly — for example, to a fragment of code that we need to use in the application being developed — we may face lengthy negotiations to mitigate the negative effects of the flawed drafting of the contractual provisions, or even a protracted court case, which will effectively halt the entire business process.

So what should an agreement transferring economic copyright to a work look like in order to effectively protect the parties to the agreement?

1. Written form of the agreement

An agreement for the transfer of economic copyright must be in writing, failing which it is void. Without the proper form, the agreement will be invalid and will have no legal effect; consequently, the rights will not be transferred to the transferee.

It is not necessary to enter into a separate agreement to transfer copyright in a given work. A clause concerning these rights, covering all necessary provisions, may—and in the vast majority of cases does—feature within the main agreement, e.g. a contract for specific work, a cooperation agreement, or a construction contract. However, one must always ensure the agreement is in writing, unless a more formal form is required for the main agreement (this is often the case with unnamed contracts, e.g. investment contracts, where, alongside the transfer of copyright, there may also be provisions regarding the sale of shares, for which a more formal form is required for the transfer to be valid – with notarised signatures).

2. Definition of the subject matter of copyright

The agreement must precisely identify the work to which the rights are being transferred. This may be an existing work or one yet to be created. By ‘work’ we mean any manifestation of creative activity of an individual nature, fixed in any form, regardless of value, purpose and mode of expression – thus, these may include photographs, musical recordings, audiovisual recordings, computer programs, source codes, documents, architectural designs, etc.

3. Specifying the fields of exploitation

Another essential condition is to specify in the contract the fields of exploitation in which the purchaser will be able to use the works. Here, it is necessary to specify to what extent and by what means the purchaser will be able to distribute the work. Although Article 50 of the Act on Copyright and Related Rights contains an open-ended list of fields of exploitation, it remains too general. The fields of exploitation should be listed specifically so as to leave no doubt in the minds of the contracting parties as to how and where the use of the works will be permitted.

Another common error found in such agreements is a provision stating that copyright in the work is also transferred to all future fields of exploitation unknown at the time of concluding the agreement. Such a contractual provision is invalid. Under the Act on Copyright and Related Rights*, the agreement may only cover fields of exploitation known at the time of its conclusion*.

In such a case, a solution may be to include a provision in the agreement whereby the parties undertake to jointly determine the terms (including remuneration) regarding the transfer of copyright to new fields of exploitation arising in the future.

4. Remuneration

The parties are free to determine the remuneration for the transfer of copyright. It may be included in the remuneration under the main contract, or it may be specified separately. The agreement may also provide that the transfer takes place without remuneration – in such a case, this must be explicitly noted in the terms of the agreement, as the Act on Copyright and Related Rights contains a presumption that, if the parties have not specified the creator’s remuneration in the agreement, it is due to them.

5. The purchaser’s right to exercise derivative rights

An extremely important provision in the context of the possibility of making changes to the work is the transfer, alongside economic rights, of derivative rights to the work. If the acquirer does not reserve for themselves the right to exercise derivative rights to the work, such as the right to modify it, they will not be able to make changes to it without the author’s consent. Pursuant to Article 46 of the aforementioned Act, unless the contract provides otherwise, the author retains the exclusive right to authorise the exercise of derivative copyright, even if the contract provides for the transfer of all economic copyright.

6. The moment of transfer of rights to the work

The agreement should also specify the moment at which copyright passes to the purchaser, although the parties to the agreement are free to determine this at their discretion.

From the creator’s perspective, it would be most advantageous for the transfer of rights to take place after remuneration has been paid to them. In the case of works not yet created, the moment of transfer of rights is most often defined as the moment the work is fixed, even in an unfinished form.

If the contract does not specify the moment of transfer, then Article 64 of the Act shall apply, according to which:

A contract obliging the transfer of economic copyright transfers to the purchaser, upon acceptance of the work, the right to the exclusive use of the work within the scope of exploitation specified in the contract, unless otherwise provided therein.

In this case, therefore, the moment of acceptance of the work by the purchaser is significant; however, this may give rise to doubts and potential problems where remuneration has already been paid to the author but the purchaser has not yet received the work, and thus the element of acceptance has not occurred. Hence, specifying the moment of transfer of economic copyright to the purchaser is of paramount importance in the context of protecting their interests.

Author

Zuzanna Bokina-Kielbasa

Radca prawny, Managing Associate

Specializes in corporate services for business entities and personal data protection. Assists the firm's clients in the preparation of all corporate documentation, including the registration of commercial companies and the further registration of changes, and provides ongoing and comprehensive advice on business. Provides advice in carrying out transformation processes of commercial companies, including transformations and mergers. Prepares and gives opinions on contracts, regulations and current documentation…

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