Creation by employee is a constant issue in terms of copyright, as well as in labour law.

As employees necessarily take part in the development of their employer’s projects, it is essential to determine who owns the copyright on the work of the employee and the conditions under which it can be used by the employer

Ownership ab initio

Article L111-1 of the French Intellectual Property Code establishes that  » The author of an intellectual work enjoys over this work, by the sole fact of its creation, an exclusive intangible property right enforceable against all ».

The mere existence of an employment contract does not entail any derogation from the benefit of the intellectual property rights to the salaried author.

French case law is consistent on the subject and no tacit assignment of rights to the employer is recognized (Civ. 1re, 16 Dec. 1992: RIDA Apr. 1993, p. 193, note Sirinelli; JCP 1993. IV. 549.) even if the work is « created in execution of the employer’s instructions » (T. com. Lyon, ref., Oct. 22, 2001: Rev. judiciaire 2002, No. 970).

In the absence of an assignment of rights to the employer, the employer may not exploit the work created by its employee.

However, exceptions have been created for the benefit of employers for certain professions (journalists, civil servants), for certain products (software) and for certain types of works (collective works).

We will not consider the specific schemes but will concentrate on the general provisions. However, it seems important to return briefly to the notion of collective work.

The collective work is, in the absence of proof to the contrary, the property of the natural or legal person under whose name it is disclosed, who is vested with the copyright (Article L 113-5 French IPC).  This provision thus allows employers who initiate a collective work to be the owner of its copyright without any further formality.

As the derogation is very favourable to employers, article L 113-1 of the French Intellectual Property Code establishes a restrictive definition of a collective work.

Qualification of a collective work cumulatively requires a work «created on the initiative of a natural or legal person who publishes and disseminates it under his direction and name » and « in which the personal contribution of the various authors participating in its elaboration merges into the whole work for which it is conceived, without being possible to attribute to each of them a distinct right.»

French case law recognized such status notably for dictionaries, websites or multimedia works etc. but the case law is severe on the matter and strictly assesses the above conditions.

Thus, the qualification of collective work has been denied for audiovisual works, for a collection of contributions from speakers at conferences, for a magazine, etc.

It is also always possible for an author to claim rights to his or her contribution, by demonstrating that his or her contribution is distinct and individualizable from the final work.

The conditions for the application of the collective work regime are strict and the risk of reclassification is real.  The establishment of an assignment of rights clause or a separate agreement is therefore strongly recommended. 

Need for an assignment to the employer

The assignment of rights is expressly subject to the condition that the field of exploitation of transferred rights is delimited as to its extent and destination, as to the territorial scope and as to the term of such assignment (Civ. 1re, 16 Dec. 1992 cited above)

The clause by which an employee assigns his or her copyright must therefore comply with a certain number of conditions, pursuant to 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) :

– The rights transferred must be subject of a separate and precise mention in the assignment

– Scope, territory and terms of the assignment must be defined

– The moral rights of the author remain non-transferable

Any overly general or imprecise assignment clause for works created under an employment contract may be annulled, as infringing the principle of the prohibition of the global assignment of future works (article L. 131-1).

However, it has already been accepted that the provision, in a contract between an advertiser and an advertising agent, of « an automatic transfer of literary and artistic property rights as and when the work is exploited or paid« , with all the rights and charges relating thereto, did not constitute a global transfer of future works (Civ. 1^re, 4 févr. 1986: Bull. civ. I, n^o 12; RTD com. 1987. 198) . Similarly, « the provision for an automatic transfer of literary and artistic property rights as and when any work is carried out does not constitute the overall transfer of future works ». (Lyon, 28 nov. 1991: Gaz. Pal. 1992. 1. 275, note Forgeron.)- what the French courts frequently recall (Versailles, 21 janv. 2021, Comm. com. électr. 2021, n° 4, comm. 27, Paris, 25 janv. 2023, Comm. com. électr. 2023, comm. 14, P. Kamina ; Propr. intell. 2023, n° 87)

Such decisions therefore support the validity of assignment of rights clauses in employment contracts, if they are sufficiently clear.

Remuneration for the assignment of rights of the employee author

The assignment may be made free of charge or for a fee (Article L. 122-7), however, article L. 131-4 of the French Intellectual Property Code expressly provides for the author an appropriate and proportional contribution to the income from the sale or exploitation of his work.

However, exceptions are detailed and allow for a flat-rate remuneration, in particular in the following cases: the basis for calculating the proportional participation cannot be determined in practice; the means of monitoring the application of participation are lacking; the costs of the calculation and control operations would be out of proportion to the results to be achieved or the nature or conditions of the exploitation make it impossible to apply the proportional remuneration rule (either the author’s contribution is not one of the essential elements of the intellectual creation of the work, or the use of the work is only incidental to the object exploited).

As of salaried creations, the proportional remuneration is generally not appropriate, particularly for all cases where the author participates only incidentally in the work: consulting on a project, producing secondary graphic elements, writing presentation texts, etc.

It is then necessary to include in the employment agreement a remuneration of authors’ rights by making a breakdown between salary and flat-rate remuneration of authors’ rights.

However, French case law is relatively flexible in this regard and has been able to accept the possibility that the remuneration « makes no distinction between the remuneration for the performance of work in the strict sense and the consideration for the continuous transfer of copyright during the performance of the employment contract« . (Paris, 22e ch., sect. B, 9 juin 2009, RG n°07/02330).   

Case law also validates the fact that an employment agreement 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 work performance (Paris, pôle 6, 5e ch., 10 mars 2016, RG n°15/00318).

Finally, it should be noted that in the context of such lump-sum assignments, the author who has suffered a loss of more than seven-twelfths due to an insufficient prediction of the proceeds of the transferred work may solicit the payment of the difference (art. L131-5 CPI).

The financial damage must be assessed at the time of the conclusion of the assignment and therefore independently of the subsequent profits of the employer, by reference to professional practices and according to the methods of exploitation of the work, and the insufficient forecast of the proceeds of the exploitation is only taken into account if the intensity of the future exploitation was not foreseeable at the time of the assignment due to a lack of information from the employer.

It is therefore advisable to set a fixed remuneration that is not derisory and complies with the professional uses and intended exploitation of the work.

In this context, to establish, negotiate or control the legality of a clause for the assignment of author rights within an employment contract, it is wise to seek advice from a specialized lawyer to study the practices applicable to your situation and to favour the protection of your interests as an employer or as an employee, depending on your situation.