Copyright in the IT industry - the most important information

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There is no denying that in the past few years the IT industry has developed most of all. It is therefore no surprise that an increasing number of young people are choosing to follow a career path in this particular industry. It is also common for entrepreneurs who have not dealt with it before to want to retrain and operate in this area.

If you are a programmer, run your own software house or are simply interested in IT-related topics, you should definitely read the following article. By reading it, you will learn about the most important issues concerning copyright law in the context of the IT industry. Keep in mind that familiarization with copyright law is one of the most important things for any person involved in this field. If you neglect it, you may not only harm your entire company, but also inadvertently bring it down.

Personal versus property copyrights - what are they and what do they apply to?

In the simplest terms, the task of copyright law is to define precisely the relationship of the creator with the work that he has made. It also regulates the use of the work and the transfer of copyright.

What are property copyrights?

Property copyrights concern the use of a work and earning money from its use by the creator.  They are transferable (that is, they can be transferred to another entity) - primarily by contract. This is the economic aspect of copyright.

What are author's moral rights?

Copyright moral rights primarily regulate the creator's bond with a particular work. They can consist of labelling the work with the creator’s name and surname, the right to make it available for the first time or to supervise it. However, these rights cannot be transferred, nor do they have a limitation in time.

Although personal rights cannot be transferred, regulating them is an important part of IT business management. Why? The creator can make a commitment that, while he/she will not transfer his rights, he/she will not use them.

How to transfer property copyright? What is a license?

As we mentioned earlier, property copyrights can be transferred - either by transferring them in full or by granting an appropriate license. What is a transfer of copyright and how to do it? What should you keep in mind when giving a license?

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Copyright transfer - the most important information

Copyright transfer is the "surrender" in full of all author's economic rights to a given work - that is, in the IT industry, for example, code, or a fragment thereof. Keep in mind that it must be done through a contract, which must necessarily be concluded in writing.

By concluding the agreement, the buyer will be able to use the work in the same way as if he/she were its creator. Thus, he/she will have the right to license or transfer the rights to another person.

Keep in mind that if you do not conclude the agreement in writing but, for example, through oral or correspondence arrangements, there will be no transfer of rights - and the agreement itself will be invalid by law. This is a very important point to pay attention to.

What is a license? How to grant it?

The granting of a license is an alternative to the transfer of copyright. Under it, the licensee (i.e. at least your software house) will obtain the right to use the work - but only to a limited extent. On the other hand, he/she is not entitled to sell the rights to the work, but - as long as the license provides for it – he/she can grant a further license.

The main difference between the transfer of author's economic rights and the granting of a license is that in the case of a transfer the creator divests himself/herself of the rights to the work, while in the case of a license the rights continue to remain with him/her. Therefore, the beneficiaries in such a case are both the creator and the licensee.

A license may be exclusive or non-exclusive. The former guarantees that the licensee will be the only one to use the product. This means that no one else will be licensed by the creator. Like a contract for the transfer of copyrights, it must be concluded in writing under penalty of nullity of contract. The latter entitles the licensee to use the work in question, while the creator may grant such licenses to any number of other parties.

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License or transfer of copyright?

There is really no uniform answer to the above question. This is because it all depends on what specific work you are dealing with. For example, if you are the creator of the software (work), then a license agreement with the client is the more suitable solution, especially if you want to continue to develop, modify or share the work with others. You can grant a license to multiple parties (unless it is an exclusive license, naturally).

So if you develop some application or software (e.g. SaaS), which is later to be used by as many users as possible, you will license each of them, not transfer the rights.

On the other hand, if you have an IT company and you want to acquire the copyright, it is a better solution to transfer the copyright to the company, especially if you want to develop a given solution further, within your own business. The same approach is suggested if, for example, a given program is part of a larger whole that you make for your client. Then you can both license the solution and transfer the right to it to another person.

In both a rights transfer agreement and a license, remember to specify exactly the scope of the transferred rights, as well as the scope of fields of exploitation - that is, how the work can be used. You also need to carefully determine the scope of remuneration.

Copyright versus employees or collaborators

If more than one person is working on the project, the software house should ensure that the rights to the works performed (or parts) are transferred by the employees. The rules for the transfer of such a right vary depending on which contract the employee is employed under.

Employment contract vs. transfer of copyright

As a general rule, the employer acquires any economic copyright that the employee has created in connection with the performance of their work. This happens by operation of law itself. Thus, if the creation of a computer program or a part of it is part of the employee's duties, then the employer does not need additional agreements to acquire the economic copyright to the resulting work.

However, in the employment contract it is worth regulating such issues as guaranteeing the use of the work to a sufficient extent or the right to dispose of it. It is also crucial to properly define the employee's responsibilities.

B2B contract vs. transfer of copyright

A very common phenomenon in the IT industry is the conclusion of business to business, or B2B for short, agreements between entrepreneurs. Such agreements are characterized by a high degree of independence between the parties and the freedom to determine the terms on which they will cooperate.

In a B2B contract, you should guarantee that your partner will transfer to the software house the copyrights to the created work, or alternatively grant a correspondingly broad license. This type of contract is different from an employment relationship and does not guarantee automatic transfer of copyright.

The business to business agreement should also regulate all issues related to the moment of transfer of the right, the field of exploitation, the principles of remuneration or the author's use of moral rights, and the liability of contractors.

Contract for work/contract of mandate vs. transfer of copyright

In the case of a contract for work and a contract of mandate, as in the case of a B2B contract, the ordering party or principal does not automatically acquire copyright from the collaborator, so the contract must adequately regulate these issues. The contract should therefore include provisions under which the software copyright will be transferred.

In each of the above types of cooperation, the form of the contract should be kept in mind. If copyright is to be transferred or an exclusive license granted, then a written contract is essential.

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