© ADEEL AMJAD OWNERSHIP OF COPYRIGHT & EMPLOYEE WORKS: UNITED KINGDOM, UNITED STATES, FRANCE & GERMANY Authorship and ownership have long been closely intertwined in copyright law. Indeed on of the notable features of the 1710 Statute of Anne was that it recognized authors as first owners of the literary property they created. The question of who is the copyright owner at a particular point of time will depend upon what has happened to the copyright since it was first created. It is also important to note that, while the law recognizes that a person other than the author may be first owner, the question of who is the author remains a distinct one (and an important one). A work made by an employee author, for example has duration dependent on the life of the author (i.e. the employee) even if the first ownership vests in the employer. Equally, issues of qualification and moral rights are determined by reference to authorship (not from ownership). A. UNITED KINGDOM So for as literary, dramatic, musical and artistic works are concerned, the treatment of creatorship and ownership follows a close pattern: the author of such a work is the person who first renders it into tangible form, and copyright vests in the author unless some other party has a better claim to it, such as, for example, an employer who had paid the author specifically to make it. While derivative works do not follow this pattern, some of the underlying principles are broadly the same. Copyright in sound recordings and films vests in their ‘author’. Sections 9(1) of CDPA, 1988 has given a specific definition to author. ‘Author’, in relation to a work, means the person who creates it. Section 9(2)(aa) states that the author of a sound recording is its producer, whilst subsection 9(2)(ab) confers the status of author of a film jointly upon the producer and director. Turning to Section 178, we find that ‘Producer’ means ‘the person by whom the arrangements necessary for the making of the recording or film are undertaken.’ Only the director enjoys moral rights. Under the 1956 Act, only transmissions made by the British Broadcasting Corporation (BBC) and the independent Broadcasting Authority (IBA) attracted copyright. Now the transmission of ‘pirate’ stations (as well as those of the many legitimate stations permitted to broadcast) will apparently be protected by copyright. It may be, however, that an old principle – no enforcement of copyright in an iniquitous work (Attorney General v Observer 1990)– would apply to hamper ‘pirate’ broadcasters in the unlikely event that they brought proceedings for the infringement of copyright. Ownership of copyright in broadcasts is conferred upon the person providing the programme and upon a person transmitting who has responsibility to any extent for content. Thus broadcasting copyright will frequently vest in joint owners. The owner of ‘typeface’ copyright is not the person who makes the typographical arrangement of the work but the person who publishes it. It is clear from this that the interest protected is not the typesetter’s labour but the publisher’s investment. In its dealing with entrepreneurial works, British copyright law has tended to concentrate on the person who made the arrangements necessary for the making of the work (the entrepreneur). In contrast, civil law systems have tended to focus on the persons who made creative contributions to the work. This difference has long been seen as an important point of contrast between the two systems. As a result of attempts to harmonize copyright law in Europe, this difference is slowly been undermined. 1- Initial Ownership Because copyright arises upon creation of the work, the question of initial ownership is not complicated, as is the case with patents and registered designs, by any need to apply for a grant. But given the lack of any formal record, it may later be difficult to establish who is the copyright owner. Hence the proposal in the Gowers Review to make it easier to secure permission to use "Orphan works”. With literary, dramatic, musical and artistic works, first ownership rests in the author or co-authors unless the exception concerning employment applies. There must be a contribution of “skill, labour and judgment” of the appropriate kind to its evolution. This is a simple than under the 1956 Act which also contained special provisions concerning employed journalists and certain artistic works made under commission. It is not, however, the solution proposed by the Whitford Committee, since it allows the copyright owner to have all the rights even when an unintended exploitation of the work materializes. Now that copyright is accorded (jointly) to the principal director of a film, he or she should fall to be treated like literary and other authors. (Sections 9, 11, Copyright, Designs and Patents Act 1988) 2- Criteria for commissioned/employee works For all the types of work under consideration, an employer becomes the initial owner of the copyright if it is made by his employee in the course of the employment and in the absence of contrary agreement. What falls within the scope of employment will depend upon the nature and terms of the job and the relation of the work to it. Stevenson, Jordan v Macdonald & Evans (1952) 69 RPC 10 A senior executive in a firm of management consultants wrote public lectures about the budgetary control of firms; he was held entitled to the copyright in them. In the Stephenson Jordon case, the employer was allowed copyright in a chapter written as part of an assignment for a particular client of employer. Byrne v Statist co. 1914 A journalist undertook a piece of translation and editing from the Portoguese as a special task outside his normal hours of employment; it made no difference that the piece was for an advertisement in his employer’s newspapers. Noah v Shuba  FSR 14 This was a copyright infringement action in relation to a book called “A Guide to Hygienic Skin Piercing” written by claimant Dr. Noah. Dr. Noah was an employee of the Public Health Laboratory. It was less clear as to whether the book was written in the course of his employment. In this case, the decisive factor was that the employee had created the work at home in the evenings and at weekends. *** It should be pointed out that the mere fact that a work is made at home or that the employee makes use of their personal resources does not necessarily mean that it will fall outside the scope of the employee’s duties. Ultimately, the question of whether a work is made within the course of employment depends upon the contract of the employment. Robin Ray v Classic FM plc (1998) FSR 622 In this case a consultant was commissioned to advise on the composition of music and catalogue the music library for the commissioning radio station. Part of the aim was to assist in assessing the popularity of the music. The consultant created a database based on the information provided and granted licenses of his work elsewhere. Although the documents were provided by the commissioner for the benefit of the consultant to carry out his task, it was by virtue of the commission that allowed the consultant to hold on trust the copyright in the documents for the purpose of carrying out his role. It was held a minimalist approach should be adopted where a license can be implied to give efficacy to the contract. Only where the client also needs to exclude the creator and third parties from using the work is an assignment of copyright likely to be implied. ---(Putting the boot in by Charles Swan)---- Overriding the statutory requirement of writing is an instance of the long standing willingness of courts to qualify formalities in the interests of justice, an attitude stretching back at least to the Statute of Frauds 1677. Nevertheless, such an implication is to be made only where it is necessary. Unless the Commissioner can show that he needed to exclude the author from using the work and the ability to enforce the copyright against the third party, he will only have an implied license to use for the purposed of the commission. The distinction between servants and independent contractors – between those under contracts of service and contracts for services – is a familiar part of the principles governing vicarious liability and it has become increasingly important with the growing variety of labor laws. It was in the context of copyright that Denning L.J. suggested that the old test of whether the person contracting for the work could exercise control over how it was done was becoming obsolete; the question ought rather to be whether the person performing it was doing so as an integral part of the business. Under the former law, the employed journalist was permitted to have copyright in exploitation of his work beyond the purpose of which it was created, and there was some case for making this a general rule. Instead amid loud cries of “anomaly” from the newspaper industry, the 1988 Act cut away the exceptions and all employees were left to bargain for special arrangements or to demonstrate that they arise by implication. (Important Criticism) Critics have suggested that by granting first ownership of works made by employees to employers, British law fails to provide creators with sufficient additional incentives to create. It is also said that British law also fails to acknowledge the natural rights which employee-authors have in their creations. In so doing, it is said that British law fails to follow the underlying rationale for copyright. In response to arguments of this sort, it is suggested that employer may not create work; they provide the facilities and materials that enable the act of creation to take place. In so doing, they make an important contribution to the production of new works. It is argued that granting first ownership to employers encourages employees to invest in the infrastructure that supports creators. 3- Equity and Implied Licenses To determine whether an implied term can be inferred it will be necessary to establish whether the implied term: - Is reasonable and equitable;- Necessary to give business efficacy to the contract;- It must be obvious;- Capable of clear expression without contradicting express terms of the contract. Where it is necessary to imply the grant of some right, it must not exceed that which is necessary. Ownership in equity will arise in those circumstances where although copyright belongs to the author at law, the work might in fact be said to be held on trust by the employer. Attorney General v Guardian Newspapers (1988) In this “Spy-Catcher case”, the ex M-15 officer, who wrote memoirs in flagrant breach of the confidence owed to the Crown, was said by Members of the House of Lords to be under such an obligation. Where a work is made by an officer or servant of the Crown in the course of their duties, copyright in that work belongs to the crown and not to the author of the work. (sec. 163,164) Griggs Group Ltd v Evans  In the particular circumstances of Griggs where a logo was commissioned, it was held that the minimalist approach should not be adopted since ‘in order to give business efficacy to the contract, it will rarely be enough to imply a term that the client shall enjoy a mere licence to use a logo and nothing more… He will surely need some right to prevent others from reproducing the logo.’ The creator was the legal owner but Griggs was the owner in equity and therefore the legal title should be assigned to Griggs. (Putting the boot in by Charles Swan) 4. Employees and Films Subsection 9(2)(ab) confers the status of author of a film jointly upon the producer and director. The copyrights in sound recordings, films, broadcasts, cable-casts and typographical formats are conferred upon the “authors” who are responsible for organizing production of the material. A & M Records v Video Collection 1995 The management company of the skater, Torville and Dean, commissioned the recording of the music for one of the pair’s skating routines. The company was held to be the makers of the resultant sound recording, rather than the person with whom it contracted to organize the writing of the musical arrangement, the hiring of the musicians and technicians and the arrangements for the studio. It was the former who took the essential initiative and investment risk. 5. Employees and Computer program Work by a computer programmer as a partner has been treated as impliedly assigned in equity to the partnership and a similar conclusion is possible where designs are fully commissioned. 6. Moral Rights ss. 79, 82, Copyright, Designs and Patents Act 1988 B. UNITED STATES 1. Initial ownership s. 201, US Copyright Act (17 USC) : (a) INITIAL OWNERSHIP.—Copyright in a work protected under this title vests initially in the author or authors of the work. The authors of a joint work are co-owner of copyright in the work. (b) WORKS MADE FOR HIRE.—In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright. (c) CONTRIBUTIONS TO COLLECTIVE WORKS.—Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the 2 (a),(b) author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series. 2. Work made for Hire s. 101, U.S. Copyright Act: A “work made for hire” is— a work prepared by an employee within the scope of his or her employment; or a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwards, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities. Community for Creative Non-Violence v Reid, (1989) The Court, in an opinion by Justice Thurgood Marshall, noted that there are two distinct categories of persons to whom the work-for-hire doctrine applies: employees, or contractor for nine specific types of work, with written acknowledgment. Congress having left out a definition, "employee" was understood to be common-law master-andservant definition. The Court then looked to traditional factual determinations about the relationship between the parties (hired party’s control over accomplishment of the task; provision of tools; right of artist to employ his own helpers; whether creation was in hirer’s line of business; hirer’s control over when and how long hired party is to work; method of payment; tax treatment of the hired party, etc.). Based on this examination, the Court found that the defendant fell into neither category, so the work was not workfor-hire. Carter v. Helmsley-Spear Inc. (1996) This is an early case of authors attempting to exercisers their moral rights under the Visual Artists Rights Act (VARA). VARA was passed in 1990 and added several new rights for artist in the US including the right of authors to prevent mutilation of works they retain the copyright on. The District Court for the Southern District of New York granted the artists an injunction under VARA prohibiting removal of the work. That decision was appealed to the Second Circuit. The Second Circuit found that the sculpture was a work made for hire and vacated the injunction. New York Times Co. Inc., et al. V. Tasini, et al, (2001) 533 US 483. Freelance authors sued The New York Times and others regarding the reproduction of material they had written in electronic databases (such as the archives at nytimes.com or on LEXIS-NEXIS) without compensation. It was held that :Section 201(c) does not authorize the copying at issue here. The Publishers are not sheltered by §201(c) because the Databases reproduce and distribute articles standing alone and not in context, not “as part of that particular collective work” to which the author contributed, “as part of … any revision” thereof, or “as part of … any later collective work in the same series.” C. FRANCE 1 Initial Ownership Arts. L.111-1, L.113-1, 1992 I.P. Code Art. L. 111-1. The author of a work of the mind shall enjoy in that work, by the mere fact of its creation, an exclusive incorporeal property right which shall be enforceable against all persons ……..………… The existence or conclusion of a contract for hire or of service by the author of a work of the mind shall in no way derogate from the enjoyment of the right afforded by the first paragraph above. Art. L. 113-1. Authorship shall belong, unless proved otherwise, to the person or persons under whose name the work has been disclosed. 2 Employee works The general rule in civil law countries is that, subject to contract or special legislative provision, the author’s right in works created by an employee in the course of his employment belongs to the employee. The employment contract may provide for transfer to the employer of the exploitation rights in the employee’s work. There is, as a result of the adoption of the EC Computer Program Directive (Art 2(3)), a general rule throughout the EC according to which the employer is entitled to exercise all economic rights in the program created by the employee in execution of his duties or following instructions given by the employer, unless otherwise provided by contract. The EC rule is reflected in art L 113-9 of the French Code, with special provision as to the exercise of certain moral rights (art L 121-7). A characterisation of a work by several employees as a collective work will result in the rights in the final work created by employees being vested initially in the employer. The Law of 1 August 2006 introduces a cessio legis (transfer of right) relative to works which, in the course of their employment, State agents create pursuant to instructions given by superiors (IP Code, new articles L 131-3-1 to L 131-3-3). Such authors’ exploitation rights are transferred by law to the State “to the extent strictly necessary to fulfil the mandate of public service.” A decree will determine the conditions for the payment of remuneration to such authors when the State profits from the noncommercial exploitation of their works. However, the State will have a “right of preference” for the commercial exploitation of these works, subject to certain exceptions. There are certain restrictions on the moral rights of such authors: for example, their rights of integrity may be asserted only for modifications prejudicial to honour or reputation (IP Code, new article L 121-7). 3 Implied licences 4 Legal persons Art. L. 113-5. A collective work shall be the property, unless proved otherwise, of the natural or legal person under whose name it has been disclosed. The author’s rights shall vest in such person. 5 Employees and collective works Guidelines for a collective work: a) A collective work must be created on the initiative of a single principal, who can be a legal or natural person. b) It must be reproduced and published by and divulged under name of principal. c) All author’s contributions must be fused together so that contributions have no distinct rights in the resulting work. d) The test to determine the fusion of work: Desbois’s two part test whereby the various contributors must not have contributed to the overall conception of the work, and their contributions must have been limited to the specific tasks given them. Directory Case (1987) 133 RIDA 192. e) There is a presumption in favour of the company which exploits it commercially House of Chanel Case (Cass. civ. I, 4 May 1994, (1995) 163 RIDA 201) 6 Moral Rights: Art. L.121, I.P. Code. 7 Employees and Computer programs Arts. L113-9, L.121-7, L.122-6, I.P. Code 8 Special Cases: presumptive transfers a) Audiovisual works – Arts. L.113-7, L. 121-5, L.132-24 b) Commissioned advertising contracts – Art. L. 132-31 D. GERMANY 1 Initial Ownership: Arts, 7, 10, German Author’s Rights Law 1965 Art. 7: The person who creates the work shall be deemed the author. 4 2 Employment/Commissioned Works Art. 43: The provisions of this subsection shall also apply if the author has created the work in execution of his duties under a contract of employment or service provided nothing to the contrary transpires from the terms or nature of the contract of employment or service. As in other civil law jurisdictions, the general rule under the 1965 Law is that the employee is the owner of the author’s right in works he creates in the course of his employment. Following the requirements of the EC Computer Program Directive (art 2(3)), art 69b(1) provides that the employer is exclusively entitled to exercise all the economic rights in a program created by an employee in the course of his employment, unless otherwise agreed. There are no special rules as to the exercise of the employees’ moral rights. The exploitation rights may be exercised by implication (art 43). 3 Implied licence Hummelrechte decision (A. Dietz, Copyright, 1980, p. 132) 4 Computer programs and employees Art. 69b: a) Where a computer program is created by an employee in the execution of his duties or following the instructions given by his employer, the employer exclusively shall be entitled to exercise all the economic rights in the program, unless otherwise agreed. b) Paragraph (1) shall apply mutatis mutandis to service relationships. 5 Performers as Employees Art. 79.: If a performer has given a performance in execution of his duties under a contract of employment or of service, the extent and conditions under which his employer may use it or authorize others to use it shall be determined, if not otherwise agreed, by reference to the nature of the contract of employment or service. Also see Art. 92 6 Films and Presumptions Arts. 88, 89, 90, 91 Videozweitauswertung - Secondary Exploitation of Video, OLG, Munich, December 8, 1988, affirmed BGH, October 11, 1990, (1991) 22 IIC 574 Videozweitauswertung III - Secondary Exploitation of Video III, BGH, Jan 26, 1995, (1997) European Commercial Cases 71 7 Moral rights and films Arts. 90, 93 E. EXAMPLES OF REGIONAL LEGISLATION 1. EC Law a) Computer Programs Directive 91/250/EEC:Arts. 2(1), 2(3). b) Rental and Lending Rights Directive 92/100/EEC:Arts. 2(5), 2(6). c) Database Directive 96/9/E.C.: Arts. 4 (1), 4(2) 2. NAFTA Art. 1705(3): Each Party shall provide that for copyright and related rights: d) any person acquiring or holding economic rights may freely and separately transfer such rights by contract for purposes of their exploitation and enjoyment by the transferee; and e) any person acquiring or holding such economic rights by virtue of a contract, including contracts of employment underlying the creation of works and sound recordings, shall be able to exercise those rights in its own name and enjoy fully the benefits derived from those rights. Note that these provisions implicitly accept the notion of assignment of economic rights by employees (Article 1705(3)). 3. Cartagena Decision 351: any natural or legal person can exercise economic rights (either ab initio rights or derived rights) in works created under employment or commission. F. INTERNATIONAL INSTRUMENTS A. WIPO/UNESCO Draft Model Laws on Employed Authors B. WIPO Draft Model Provisions for Legislation in the Field of Copyright See (1990) Copyright 241 There are no provisions in the Berne Convention or the Rome 1961 Convention, the TRIPS Agreement or the WIPO Treaties 1996 concerning ownership of rights in employees’ works. However, Article 14bis 2(8) of the Berne Convention provides that ownership of copyright in a cinematographic work shall be a matter for legislation in the country where protection is claimed. Note the presumptions in Article 17 of the Berne Convention.