Works created by employees are a constant issue in terms of copyright, as in labor law.
As employees take part in the development of their employer’s projects, it is essential to determine who owns the copyright to the work carried out by employees and under what conditions their employer can exploit such works.
I – Assignment of copyright ab initio
In this regard, French Intellectual property code (CPI) opens with “The author of a work of the mind shall enjoy in that work, by the mere fact of its creation, property right which shall be enforceable against all persons. » (art. L111-1 of CPI).
The mere existence of an employment contract does not imply any derogation from such disposition and from the allocation to the salaried author of the copyright of the works he creates.
Case law is constant in this area and does not admit any tacit assignment of rights in favor of the employer (Civ. 1re, 16 Dec. 1992: RIDA Apr. 1993, p. 193, Sirinelli note; JCP 1993. IV. 549.) and this even if the work is created in execution of the directives of the employer ”(T. com. Lyon, ref., 22 Oct. 2001: Rev. juridique 2002, no 970).
Accordingly, in the absence of assignment of rights for his benefit, the employer cannot exploit the work created by his employees.
However, French law provides exceptions for the benefit of employers regarding certain professions (journalist, civil servant), certain products (software) and on certain types of works (collective work).
Specific regimes are not addressed hereunder as will focus on general provisions. However, the notion of collective work requires further development.
A collective work shall be the property, unless proved otherwise, of the natural or legal person under whose name it has been disclosed ant the author’s rights shall vest in such person (art. L 113-5 CPI).
This provision allows employers who initiate a collective work to hold copyright on it without any formality.
As such derogatory status is strongly favorable to the employer, article L 113-1 of CPI provides a strict definition of a collective work and the qualification of a collective work requires a work « created at the initiative of a natural or legal person who edits it, publishes it and discloses it under his direction and name » and “in which the personal contributions of the various authors who participated in its production are merged in the overall work for which they were conceived, without it being possible to attribute to each author a separate right in the work as created. »
Case law approved the qualification as collective work in various cases, in particular for dictionaries, websites, multimedia works, advertising creations, etc.
However, an author may claim rights over his contribution, in particular by demonstrating that his contribution is distinct and can be isolated from the final work. In this matter, case law is severe in and strictly assesses the above conditions.
Thus, the qualification as a collective work has previously been denied for audiovisual works, for a collection of contributions from speakers at conferences, for a magazine, etc.
The conditions of application of the collective work regime are strict and the risk of requalification is real. The establishment of an assignment of rights clause therefore remains judicious.
II – Assignment of rights to the employer
Assignment of rights shall be subject to each of the assigned rights being separately mentioned in the instrument of assignment and the field of exploitation of the assigned rights being defined as to its scope and purpose, as to place and as to duration Civ. 1re, 16 déc. 1992 above).
The clause by which an employee assigns his copyright must therefore comply with the requirements of Article L. 131-3 of the Intellectual Property Code, which is regularly recalled by case law (Cass. Soc., 7 janv. 2015, n°13-20.224):
-Assigned rights being separately mentioned in the instrument of assignment
-Field of exploitation of the assigned rights must be defined as to its scope and purpose, as to place and as to duration
-Moral rights of the author remain inalienable
Overly general or imprecise assignment clause for works created under an employment contract may be canceled, as article L 131-1 of CPI provides that total transfer of future works shall be null and void.
However, case law already admitted that the provision, in a contract between an advertiser and an advertising agent, of an automatic assignment of literary and artistic property rights as and when the works are exploited or paid, does not constitute a global transfer of future works (Civ. 1re, 4 Feb. 1986: Bull. civ. I , No. 12; RTD com. 1987. 198).
In the same sense, “provision of an automatic transfer of literary and artistic property rights as and when possible works are created do not constitute the overall transfer of future works” (Lyon, 28 Nov. 1991: Gaz. Pal. 1992. 1.275, note Forgeron).
Such decisions are therefore favorable to the validity of the assignment of rights clauses in employment contracts, as long as they are sufficiently clear.
III – Remuneration for the assignment of rights of the employee
The rights may be transferred, for or without payment (art. L122-7 CPI) however article L. 131-4 of CPI expressly provides that assignment shall comprise a proportional participation by the author in the revenue from sale or exploitation of the work.
However, derogations are established as to the possibility to resort to a lump sum in particular when the basis for calculating the proportional participation cannot be practically determined; the means of supervising the participation are lacking; the cost of the calculation and supervising operations would be out of proportion with the expected results and if the nature or conditions of exploitation make application of the rule of proportional remuneration impossible, either because the author’s contribution does not constitute one of the essential elements of the intellectual creation of the work or because the use of the work is only of an accessory nature in relation to the subject matter exploited.
In the context of works created by employees, proportional remuneration is generally not suitable, in particular for all cases where the author solely contributes in an ancillary manner in the work: consultant on a project, production of secondary graphic elements, writing of presentation texts etc.
Thus, the remuneration of the employee shall comprise a fraction corresponding to the remuneration of copyright assignment and salary and such lump sum remuneration must be separated.
Case law is however rather flexible in this respect and admitted the possibility that the lump sum remuneration « does not make any distinction between the remuneration for the actual work performance and the consideration for the assignment of copyright during the execution of the employment contract ”. (Paris, 22e ch., sect. B, 9 juin 2009, RG n°07/02330).
The judges also established the fact that an employment contract does not detail the financial terms of the assignment of rights and that the salary includes both the consideration for the assignment and that of the implementation of the work service (Paris, pôle 6, 5e ch., 10 mars 2016, RG n°15/00318).
It is necessary to note that where the work has been assigned against lump sum remuneration, author may demand review of the price conditions under the contract if he suffers a prejudice of more than seven-twelfths as a result of a burdensome contract or of insufficient advance estimate of the proceeds from the work. (art. L131-5 CPI).
Prejudice must be assessed at the time of the conclusion of the contract and therefore independently of the subsequent profits of the employer, by reference to professional uses and taking into account the overall exploitation of the works by the employer.
The insufficient advance estimate of the proceeds from the exploitation of the work is taken into account only if the intensity of such exploitation was not foreseeable at the time of the transfer due to lack of indications from the employer.
It is therefore advised to establish a fixed remuneration that is not derisory and in compliance with the professional uses and exploitations of the work envisaged.
In order to draft, negotiate or control the legality of an assignment of rights clause in an employment contract, it is wise to seek advice from a specialized lawyer in order to study the applicable uses and to guarantee the protection of your interests as an employer or as an employee, depending on your situation.
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