Standard Contracts of Multinational Companies vs. National Copyright Contract Law –
Particular Examples
1. Introduction
The title of this paper “Standard contracts of multinational companies vs. national copyright
contract law” refers to the questions of validity and effects of the standard contracts in the
field of copyright law concluded between multinational companies and various legal subjects
(authors, end-consumers of the copyrightable works). Any standard contract (multinational,
national, in the field of copyright law or other area of law) which is contrary to (national) law
can be challenged on the grounds of validity, and invalid standard contract will lack the legal
effects intended by the party who created it. The standard contracts in the field of copyright
law have considerable tradition for various reasons. For example, in the beginning of XX
century in Germany, and after World War II in Austria, standard contracts were developed
between copyright, performers and publishing associations, and purpose of standard contracts
in those cases was establishing of cartels.1 This was in accordance with the general trend in
those days, when it was typical purpose of standard contract to secure that members of
professional associations, chambers of commerce and similar organizations obey certain rules,
which eventually led to monopolies.2 The purpose of standard contract has changed. Today
standard contracts in copyright contract law are developed because of various reasons.
Different types of standard contracts in copyright contract law were developed upon request
of the software industry. For example, the standard contracts appear in copyright law of IT
products as End-User-License-Agreement (EULA),3 the GNU General Public Licenses
(GPL), or Berkeley Software Distribution licenses (BSD), etc.4
1
M. Rintelen: Urheberrecht und Urhebervertragsrecht nach österreichischem, deutschem und schweizerischem
Recht, Springer Verlag, Wien, 1958, p. 450.
2
S. Hofer, in: M. Schmoeckel, J. Rückert, R. Zimmermann (Hrgs.): Historisch-kritischer Kommentar zum BGB,
Mohr Siebeck, 2007, pp. 1417-1418.
3
Term EULA is used for example in Adobe EULA http://www.adobe.com/products/eulas/pdfs/ps7_eula.pdf (9.
9. 2008.), Cisco EULA http://www.cisco.com/en/US/docs/general/warranty/English/EU1KEN_.pdf (9. 9.
2008.), Corel EULA http://www.cae_refcentar.fsb.hr/download/eula/Corel_11_EULA.pdf (9. 9. 2008.),
Microsoft
EULA
http://download.microsoft.com/download/5/E/7/5E7B79D4-90B8-4A3D-B9648A72F49A21A9/processoreula.pdf
(9.
9.
2008.),
Sony
EULA
http://www.sony.co.uk/res/attachment/file/65/1193315621365.pdf
(9. 9. 2008.), Sophos EULA
http://www.sophos.com/sophos/docs/eng/eula_2007_lall.pdf (9. 9. 2008.). See also L. E. Trakman: Adhesion
Contracts and the Twenty First Century Consumer, University of New South Wales Faculty of Law Research
Series, Year 2007 Paper 67, p. 6.
4
R. Mantz: Creative Commons-Lizenzen im Spiegel international Gerichsverfahren, GRUR Int. 2008, Heft 1,
pp. 20, 24.
1
Generally speaking standard contracts serve to simplify the process of the conclusion of large
number of contracts of the same type, which is typical for large business enterprises.5 Almost
any contract can be concluded as a standard contract, and the same is true for copyright
contracts. For the qualification of the standard contract only relevant matter is that standard
contracts are preformulated by one party and other party could not influence its content.6
The copyright contracts are often concluded between authors and different intermediaries in
copyright activity. Many copyrightable works can not be effectively distributed and exploited
without of the intermediaries. Traditionally the role of intermediary regarding copyright
belongs to publishers,7 but other intermediaries should not be neglected. Intermediaries are
also associations and organizations for collective management of copyright and related
rights.8 The publishers nowadays are legal persons, often large organizations which operate
worldwide. The multinational publishing companies posses considerable economic power in
comparison to authors who are almost in every case natural person.9 Therefore, it is
understandable that legal writers qualify the copyright contract law as an instrument for
5
Standard contracts falls into broader category of adhesion contracts. The term adhesion contracts (contrats d'
adhesion, conditions générales du contrat) were invention of French lawyer Raymond Saleilles. See Vera Bolgár:
The Contract of Adhesion: A Comparison of Theory and Practice, The American Journal of Comparative Law,
Vol. 20, No. 1 (Winter, 1972), pp. 54-55. etc. See also A. Goldštajn: Opći uvjeti poslovanja (General Contract
Terms), Zagreb, 1970, p. 25. In German law the notion of the Allgemeine Geschäftsbedingungen (AGB, general
transaction conditions) refers to terms and conditions of contract which are preformulated for a indefinite
number of contracts (§ 305 German Civil Code; hereinafter BGB). The notion AGB covers not only terms and
conditions of contract which are printed as a part of the deed (form) but also a reference that certain contract is
governed not only by statements contained in the contrat but also in the separate document containing the terms
and condtions.
6
In the words of EC legislation – unfair terms in consumer contracts. Standard contracts are not individually
negotiated. See infra fn. xxx.
7
I. Gliha: Nakladnički ugovor u svjetlu njegova razvoja u Hrvatskoj (Publishing contract in the light of its
development in Croatia), Zbornik Pravnog fakulteta u Zagrebu, God. 45, 4-5/1995, p. 483.
8
I. Gliha: Autorsko pravo (The Copyright Law), Zagreb, 2000, p. 13. The standard contracts of the associations
for collective management of copyright and related rights are not issue regarding subject matter of this paper
mostly because they lack multinational character.
9
The exception exist when copyrightable work is created on the basis of a work for hire contract. European legal
orders do not accept work-for-hire doctrine (see C. P. Rigamonti: Deconstructing Moral Rights, Harvard
International Law Journal, Volume 47, Number 2, Summer 2006, p. 360; H. Hansmann, M. Santilli: Authors'
and Artists' Moral Rights: A Comparative Legal and Economic Analysis, The Journal of Legal Studies, vol. 26
(January 1997), p. 134-135.). Croatian Copyright Act does mentions contract for works in the relations to
copyrightable work in the Art. 73-74. However, the Art. 74. states that author keeps the copyright on the object
of the contract unless otherwise is agreed or prescribed by the law. According the Art. 73. of the Croatian
Copyright Act in the case of work-for-hire contract author undertakes the obligation to create copyrightable work
and deliver the copy, while retaining the copyright. Therefore, regardless of the fact that Croatian Copyright Act
regulates contract for work in the respect of the copyrightable works it does not accept work for hire doctrine.
Even if author can be only natural person, heir of the author can also be legal person (R. M. Hilty, in:
Honsell/Vogt/Wiegand: Baseler Kommentar zum Schweizerischen Privatrecht, Obligationenrecht I, Art. 1-529
OR, 3. Auflage, Helbing & Lichtenhahn, Basel – Genf – München, 2003., p. 2118.).
2
protection of economically weaker party – the author.10 The economic advantage of the
(multinational) publisher in comparison to authors is reflected through different shapes, and
one of the examples for such advantage is standard contract. Of course, standard contracts are
not illegal instrument. It is typical for large enterprises to use standard contracts in order to
simplify the process of conclusion of contract, and publishing companies are no exception.
The conclusion of contracts via standard contracts is a reflection of mass production,
standardization and industry,11 and both copyright and publishing activities perfectly fit into
these categories, because today they are without any doubt a mass production industry.12 As
any other business enterprise, publishers use standard contracts in the legal relations with
authors, in the respect of end-consumers who buy copyrightable works (books, periodicals,
computer software, etc.), and in legal relations with other publishers.
The multinational publishing companies operate in many different legal orders, which
naturally lead to conflict between different sets of rules. Standardization of standard contracts
in multinational company can amount to same or similar contract terms regardless of the fact
that multinational company operates in different countries and consequently different legal
systems, and standardized contract terms are not adopted to some or theoretically even to
none of the existing national legal systems. Though not illegal the standard contracts can
seriously distort balance between contracting parties. This is why conflict between standard
contracts of multinational companies and national copyright contract law is not without
serious consequences. The fact that in some contractual relations economic difference
between contracting parties is considerable is in the case of standard contracts underlined
even more. Because of that this paper deals with the standard contracts in legal relations
between authors and publishing companies on one side, and between publishing companies
and end-users on the other side.13
10
H.-P. Götting, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang: Urhebervertragsrecth, Festgabe für
Gerhard Schricker zum 60. Geburstrag, C.H. Beck'sche Verlagsbuchhandlung, München, 1995, p. 59.
11
K. Zweigert, H. Kötz: Introduction to Comparative Law, 3 rd revised edition, Clarendon Press, Oxford, 1998, p.
333.
12
H.-P. Götting, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang, o.c., pp. 56-57.
13
The conflicts between different publishing companies are omitted. In the legal relations between publishing
companies standard contracts are also important issues. However, because of the fact that economic nature of
legal relation between publishing companies is different in comparison to legal relations between authors and
publishing companies or publishing companies and end-consumer, most notably difference regarding bargaining
power, these legal relations should be analyzed separately. There are also "technical" differences between these
legal relations. For example when both publishing companies use standard contracts, the conflict between
standard contract can arise (so-called “battle of forms” – see G. H. Treitel, in: A. G. Guest: Chitty on Contracts,
Sweet & Maxwell Limited, 1994, pp. 104-105.).
3
2. The conflict between standard contracts of multinational companies and national
copyright contract law
The relation between standard contract terms of multinational publishers and national
copyright contract law can be described as a conflict in case when provisions of standard
contracts deviate from the national copyright contract law. The national copyright law in this
context means the law of habitual residence of the author or another holder of copyright or
end-consumer of copyrightable work. The standard contracts (as any other type of contract)
can deviate form the provisions of national copyright contract law if such provisions are socalled ius dispositivum.14 Ius dispositivum is a law which can be set aside by dispositions of
contracting parties. The situation is different if provision of national copyright contract law is
ius cogens which can not be set aside by contracting parties. The conflict between standard
contract of multinational company and national copyright contract law exists in later case if
national law is applicable law, but can also exist in former case of ius dispositivum.
Eventhough it is allowed to exclude the applicability of ius dispositivum the exclusion
conducted against the principle of good faith or against specific provisions of national law
regulating standard contracts will not be valid.
The conflict between standard contracts and national copyright contract law is not always a
result of the willing acts of multinational companies contrary to the principle of good faith or
more specific provisions of national law. Some of the conflicts have their origin in substantial
differences between copyright law systems of the world.15 The conflict between standard
contracts of multinational companies and national copyright contract law can be easily
demonstrated in the case of standard contract of multinational company incorporated in
common law jurisdiction and civil law jurisdiction, or the other way around. If multinational
company standardized its standard contracts at higher level, without taking into the account
14
Ius dispositivum in German language means dispositives Recht, in French language lois supplétives, and
implied terms in English language – for translations see K. Zweigert, H. Kötz, o.c., p. 327.
15
Terms civil law and common law are used in literature to describe dichotomy between two large groups of
legal order – Anglo-American (and others in Asia and Australia) on one side and Continental Europe on the
other side (R. Zimmermann: The Law of Obligations, Roman Foundations of the Civilian Tradition, Clarendon
Press, Oxford, 1996, pp. ix-xi). The civil law in civil law jurisdictions also means the branch of law which
regulates property law, law of obligations (contracts, civil law liability, unjustified enrichment, negotiorum
gestio, and unilateral declarations of intent), succession law, and in some legal orders family law and copyright.
If the civil law in this sense is enlarged with commercial law and consumer protection law the result is part of
law which is called private law. Although the division between private law and public law has several weak
points it is has not been abandoned till today.
4
particular legal orders in which company operates it can produce conflicts without any
specific intention. This problem is particularly emphasized when multinational company
operates in large number relatively small jurisdictions. If this is the case multinational
company probably will not adapt its standard contracts to every jurisdiction that it encounters.
For a long period of time it has been emphasized that fundamental difference between
common law and civil law jurisdictions in the field of the copyright is lack of statutory
recognition of moral rights.16 The moral rights are reflection of the personality of the author,
and in some jurisdictions connection between author and his/her work is particularly strong.
One should also bear in that in civil law jurisdictions private law protects not only pecuniary
interests, but also non-pecuniary (ideal) interests. 17 In this respect it should be mentioned that
both copyright law and private law are justified by the help of legal theory of the natural
law.18 If, for example, standard contract of publishing company incorporated in the common
law jurisdiction contains the clause stating that author transfers his/her moral rights to
publishing company, this can be qualified as a conflict in cases when author resides in the
civil law jurisdiction. The changes in the common law have to some extent diminished this
difference, but there are still substantial differences between the approach to moral rights in
civil law and common law systems.19
The conflict between standard contract of multinational company and national copyright
contract law should not be regarded as the conflict exclusively between civil law and common
law. It can also exist within civil law jurisdictions. The civil law jurisdictions are not uniform
system of law. In the respect of the copyright law in Continental Europe there is division
between monistic and dualistic systems. In monistic copyright system, which is for example
accepted in Germany, the copyright is a single subjective right consisting of economic and
16
C. P. Rigamonti, o.c., p. 354.
Since the time of great Roman lawyer Ulpianus law is divided in two main categories: private law and public
law. The civil law, traditionally synonymous for a private law is today only general part of private law while
civil law applies to all areas of the private law. Apart from general private law other branches of private law
regulate specific areas of private law (e.g. copyright law, company law, consumer protection law). See H.
Köhler: BGB Allgemeiner Teil, 24., völlig neubearbeitete Auflage, C.H. Beck'sche Verlagsbuchhandlung,
München, 1998, p. 8.; K. Larenz, M. Wolf: Allgemeiner Teil des Bürgerlichen Rechts, 9. Auflage, C. H. Beck,
München, 2004, pp. 11-16. In this paper term civil law is used both for general part of private law, and for the
legal systems of codified law (legal orders of Continental Europe) opposed to common law.
18
R. Versteed, o.c., p. 525.
19
The moral rights in Continental Europe are inalienable, while in common law the author can waive or transfer
the moral rights (E. Adeney: The Moral Rights of Authors and Performers, An International and Comparative
Analysis, Oxford University Press, 2006, p.64-66, 207-209, 271-272, 422-423, 512-516
17
5
moral rights.20 Dualistic copyright system means that economic and moral rights do not form
one unit, and therefore can split. In dualistic systems (France) moral rights can exist without
economic rights, and vice verse.21 If multinational company is incorporated in Germany (or
according to current German legal theory and case law has a real seat in Germany22) and
author resides in country which accepts dualistic system such as France, this again can
amount to conflict between the standard contract and national copyright contract law. This is
the consequence of the fact that contract between author and publisher under German law
should be formulated in accordance with monistic system of copyright (copyright is unity that
cannot be transferred to publisher), while in French law in accordance with the dualistic
system copyright contract can be assigned copyright to publisher or other person.23
The conflict between standard contracts of multinational companies and national copyright
contract law can lead to invalidity of the standard contracts which can annul whole
transaction.
3. Validity and effects of standard contracts in copyright transactions
Standard contracts can appear in different legal relations in the field of copyright law.
Standard contracts are often concluded between authors or other copyright holder and
publishers, and between publishers and end-consumers of copyrightable work in case of the
software. In the first instance standard contract takes form of the publishing contract and in
the second instance license contract.24, 25 This division is a little bit simplified. However, it
can serve as a basis for further analysis because as explained before standard contracts bring
one kind of the problems in relations between the economically uneven parties (author –
20
E. Adeney, o.c., pp. 221-222.; I. Henneberg: Autorsko pravo (The Copyright Law), Zagreb, 2001, pp. 35-36.;
I. Gliha: Autorsko pravo, o.c., p. 11.
21
I. Henneberg, o.c., pp. 36-37.; I. Gliha: Autorsko pravo, o.c., p. 11.
22
German law will probably be amended under the influnece of the European Court of Justice case-law, but the
real seat theory will be kept for non-EU legal relations.
23
See H.-P. Götting, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang , o.c., 64-71. See also S. von
Lewinski, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang, o.c., pp. 687-688.
24
The term license agreement is also widespread, particularly if copyrightable work is software (End-UserLicense-Agreement / EULA).
25
These are only examples. Naturally, license contract can be concluded not only between publisher and enduser, but also between two publishers (M. Rintelen, o.c., p. 449.). License contract are general basis for
intellectual property transactions. According to some opinions in legal literature license contract in the field of
the intellectual property are typically concluded through contract of adhesion (L. Carrière: The New Civil Code
of Québec and Intellectual Property: Preliminary Reflexions and Comments, p. 22 at
http://www.robic.ca/publications/Pdf/126-LC.pdf, 10. 9. 2008.).
6
publisher, publisher – end-consumer), and another in relation between economically even
parties (publisher – publisher). If copyright serves to protect author (economically weaker
party) then we should focus on conflict in legal relations between economically uneven
parties. The problem with standard copyright contracts between two publishers (battle of
forms) is different issue.
The copyright contract law does not regulate standard contracts as such. Different aspects of
the standard contracts (the definition of the notion of standard contract, conditions of validity
and effects of standard contracts) are regulated in the general contract law. Therefore the
general provisions of contract law are applicable.26 This means that validity and the effects of
the standard contracts are evaluated on the basis of the general contract law. The validity of
some copyright contract should be evaluated on the basis of consumer protection law.
Because of the factual inequality of contracting parties important part of the consumer
protection legislation are provisions on unfair contract terms which are basically lex specialis
on standard consumer contracts.27 The contracts between authors and other publishers can not
be regarded as a consumer contracts, because the author does not fit in the category of
consumer,28 and author does not acquire goods and services when concluding contract with
the publisher. Contracts between publishers and other intermediaries and end-consumers can
be consumer contracts, and therefore the provision of the consumer protection legislation is
applicable.29 However, idea that authors should be afforded same or similar protection as
consumer should not be easily dismissed. Eventhough author can not be qualified as a
consumer, and therefore can not obtain the protection granted to consumers by the consumer
protection legislation, the legal position of authors and consumers is similar. They are both
economically weaker parties in comparison to their contractual counterparts, and they both
hold central position in copyright law and consumer law.30 As it was already mentioned the
26
The applicability of the general contract law on copyright contracts is consequence of the principle lex
specialis derogat legi generali, and in some legislations on specific provision (see for example Art. 55. of
Croatian Copyright Act, Official Gazette No. 167/03, 79/07.
27
Consumer contracts are also governed by general contract law. For example, capacity of the parties, legality of
contract, conclusion of contract without error, deceit or duress are condition of validity of contract prescribed by
general contract law equally applicable to consumer contracts. Special legal regime is applicable only to certain
aspects of consumer contracts.
28
In accordance with the Art. 2. B of the Council Directive 93/13/EEC of 5 April 1993 on unfair terms in
consumer contracts “consumer” means any natural person who, in contracts covered by this Directive, is acting
for purposes which are outside his trade, business or profession.
29
The term intermediary is also mentioned by C. P. Rigamonti, o.c., p. 399.
30
A. Dietz, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang, o.c., p. 2; Ž. Šmalcelj: O ravnopravnosti
stranaka u ugovornom odnosu (On equality of contracting parties in contractual relations), Naša Zakonitost,
6/1981, pp. 63-64.
7
copyright contract law is to large extent instrument of protection of authors,31 in a similar way
in which consumer protection legislation protects consumer. The principle of equality and
protection of economically weaker party in contractual relations is also part of general
contract law (principle of good faith).
The fact that standard contracts are regulated within general contract law does not exclude
application of the copyright law. Terms and conditions of standard contracts of multinational
companies could be also "problematic" from the perspective of the national copyright contract
law because of the other reason. The provisions of the standard contracts could be contrary to
ius cogens of copyright (contract) law. If standard copyright contracts’ clause is per se
contrary to ius cogens of copyright (contract) law it will be invalid not because it is in
standard contract but while it is illegal. The provisions of copyright contract law do not
directly deal with the legal destiny of contracts which are contrary to ius cognes. That is not
necessary, because general contract law regulates nullity in case when contract is contrary to
ius cogens regardless of the fact whether ius cogens is part general contract law (e. g. general
conditions of validity of contract) or any other part of the private law (e. g. copyright law,
consumer protection law). Some provisions of standard contract can be contrary to law to
such extent that they are not only contrary to ius cogens but also to ordre public. Difference
between ius cogens and ordre public exist only in the respect of private international law. In
situations which are purely internal ius cogens and ordre public are practically the same
notions.32 In international situations ordre public covers only fundamental values of specific
jurisdiction. For copyright contracts (both individually negotiated and standard contracts) it is
important that at least in some jurisdictions copyright moral rights are part of ordre public.33
Special rules on standard contracts protect weaker parties in contractual relation in the respect
of the terms and conditions of contract which are per se in accordance with law (exclusion or
limitation of liability, right to withdraw form the contract, choice of law clauses), but in
circumstances of the inequality of the parties bargaining powers are unfair. Unfairness in this
context brings us to principle of good faith. The same applies to standard contracts in the field
of the copyright law. Regardless of the reason that lead to invalidity of the standard contract
31
H.-P. Götting, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang, o.c., p. 59.
H. Sikirić: Prisilna pravila, pravila neposredne primjene i mjerodavno materijalno pravo u međunarodnoj
arbitraži, Pravo u gospodarstvu, 38 (1999) , 1, p. 83.
33
Mireille M. M. Van Eechoud : Choice of law in copyright and related rights; Alternatives to lex protectionis,
Kluwer Law International, 2003, p. 41.
32
8
the copyright law and the general contract law rules cooperate – the copyright law represents
the limit to a contractual freedom and the general contract law regulates the consequence for
the contract terms which deviate from the copyright contract law by prescribing invalidity of
the contract. Terms and conditions of standard contracts which are contrary to the national
copyright contract law are null and void. Contracts which are null and void do not have legal
effects which would be consequence of valid contract. This means that, for example,
publishing contract would be null and void publisher would be neither obliged nor entitled to
publish the copyrightable work, and author would not be neither entitled to claim the fee nor
entitled to claim the publication of the copyrightable work.34Nullity of contract is again not
regulated by the national contract copyright law, but by general contract law. The
consequences of nullity of the contract are again issues of general contract law, or even
private law,35 not copyright contract law. Consequently, validity and effects of the standard
contracts of multinational companies in the respect of the national copyright contract law are
evaluated on the basis of copyright law, general contract law and in some cases consumer
protection legislation.
3.1. Conditions of validity of standard contract
Standard contract will be valid if two set of conditions are fulfilled. First of all, general
conditions for validity of contract have to be met. Standard contract is a (part of) contract.
Therefore it has to be concluded, as any other contract, by parties who have legal capacity,
without mistake, deceit, duress, with content which is not illicit, and sometimes in a specific
form. 36, 37 These general conditions of validity of the contract are almost universally accepted
in both common law and civil law jurisdictions.38
34
See infra chapter 5. Consequences of invalidity of the standard contracts.
The issues of transfer of copyright on the basis of the contract which is null and void is not governed by
contract law in Germanic legal orders. In German, Austrian and Swiss law provisions relevant for this issue
belong to broader category of law of obligations (more specifically unjustified enrichment) and to some extent
by property law.
36
K. Zweigert, H. Kötz, o.c., 348-349, 366-367, 380-387, and 410-430.
37
Requiremenet regarding the form of the contract is exception not the rule. However, this exception is accepted
in copyright law in some jurisdictions. For example, Croatian copyright contract law prescribes written form as a
condition for validity of copyright contract. The same was true in the framework of previous Croatian copyright
legislation (see I. Gliha: Autorsko pravo, o.c., pp. 12-13.). Sanction for not fulfilling this condition can be found
in contract law – nullity of contract. However this does not mean that further destiny of contractual relation is
doomed. Rules of contract law contain the provision according to which contracts which are null and void can
35
9
The most important provision of contract law in this respect is a rule according to which
contract in order to be valid must not be illicit (illegal). If the content of contract is contrary to
ius cogens the consequence is nullity of contract. The copyright law contain proscriptions
regarding disposition of copyright, so in this way rules on copyright law (proscriptions) and
rules on contract law (nullity of contracts which are illegal) serve to protect legitimate
interests of author and other copyright holders.
Second set of rules which prescribe the conditions of validity of standard contracts is specific
for the standard contracts. Standard contracts can distort equality of contracting parties and
furthermore infringe the principle of good faith. Justification for invalidating of an agreement
can be also found in general part of contract law, for example in principle of equality of
contracting parties.39 Modern law deals with the unfair standard contracts in more details.
This is particularly so in the case of consumer contracts. End-users of copyrightable work are
often consumers, and contract which are legal basis to transfer the right to use of
copyrightable work are, if legal conditions are met, consumer contract, and if that is the case
rules of consumer (protection) law are applicable. In some legal systems differences between
general rules on general contract terms are similar to the provisions of the consumer law, but
in some legal orders position of consumer is much better (e.g. if so-called black lists of
general contract terms are introduced). Apart from the general clause which invalidates
provisions of standard contracts consumer protection legislation introduced so-called gray
and/or black list of standard contract terms. If the contractual clause falls into the category of
clauses on a black list it is invalid as such, and if it is on gray list additional conditions must
be met to invalidate it. In Member States of the EU the most significant act in this respect is
Council Directive 93/13/EEC.40, 41 Under the influence of the consumer protection legislation
become valid. French law also require written form for certain type of copyright contracts. See S. von Lewinski,
in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang, o.c., p. 691.
38
Nullity of the contract is sanction for not fulfilling formal requirement in Croatia, Germany, Austria and
Switzerland. Other legal systems sanction this omission by unenforceability (K. Zweigert, H. Kötz, o.c., pp. 367,
371-372.).
39
See for example Clifford Davis Management Ltd. v. W.E.A. Records Ltd. (1975). – Ž. Šmalcelj, o.c., pp. 6364.
40
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, Official Journal L 095 ,
21/04/1993 P. 0029 – 0034.
41
The idea that standard contract in the field of copyright law should be assessed on the basis of Directive
93/13/EEC has opposition in business community: “Under no circumstances should the definition of consumer
goods be extended to include the acquisition of licences for software and electronic data. As these contracts are
inextricably linked with underlying copyrights, licence claims and different contractual characteristics they are
not suitable to the principles of consumer sales.” - see GHK / Civic Consulting / Bureau van Dijk - Ingenieurs
10
the general contract law was also amended in some legal systems which enabled the courts to
revise the standard contracts on the basis of more specific provisions in comparison with legal
systems which have "only" the principle of good faith as a decisive criterion. It should also be
mentioned that certain legal orders like Germany had specific legislation on standard
contracts more then thirty years ago.42
Law that regulates standard contracts can invalidate standard contract even if content of the
contract is not contrary to ius cogens. Provisions of standard contracts are sometimes
perfectly legal in the respect of their content, but the problem is the unequal bargaining power
which led to conclusion of contracts under terms of one party. Consequently, the standard
contract that deviates from the ius dispositivum will be invalid if it is contrary to standard
contract regulation. The problem with the standard contract is not exclusively in its substance,
but in the circumstances in which it was concluded, or to be more exact in the economically
inequality of contracting parties. In some situations it is impossible to exploit copyrightable
works without the help of the intermediaries (e.g. publishers, producers).43 The authors of
literary works were in this respect the best example, even though today it is possible to bypass
publishers and, for example, publish literary works on a web site. Because of the fact that
statutory framework allows that only natural persons are authors of the copyrightable works,
with the exception of work for hire contract,44 and that intermediaries are in the most of the
cases legal persons, some of them with considerable economic influence the legal relation
between the author of the copyrightable work and intermediary is the legal relation of
economically unequal parties.
3.2. Validity of the standard contracts in the field of the consumer law
conseils: Preparatory Work for the Impact Assessment on the Review of the Consumer Acquis, DG HEALTH
AND CONSUMER PROTECTION, Analytical Report on the Green Paper on the Review of the Consumer
Aquis, submitted by the Consumer Policy Evaluation Consortium, Date: 06/11 /2007, p. 92.
http://ec.europa.eu/consumers/rights/detailed_analysis_en.pdf (16.9.2008.).
42
More specifically Germany adopted Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen
(AGB-Gesetz) which came into force on April 1 st 1977. At this moment standard contracts in German law are
regulated by §§ 305-310 of the German Civil Code (hereinafter BGB).
43
P.B. HUGENHOLTZ, L. GUIBAULT: „Copyright Contract Law: Towords a Statutory Regulation?“, Institute
for
Information
Law,
Amsterdam,
August
2004
(http://www.ivir.nl/publications/hugenholtz/Summary%2005.08.2004.pdf – July 23rd 2008 – 10. 9. 2008.).
44
Unless work for hire doctrine is accepted in specific jurisdiction. See supra fn. 9.
11
Standard copyright contracts appear not only in the legal relations between the authors and the
publishers. After obtaining a copyright or right/obligation to publish the copyrightable work
publisher will publish the work and sale the items which contain materialized copyrightable
works (books, periodicals, DVDs, CDs, etc.). It is important to remind that at least in some
cases publisher or his/her representative do not conclude with the end-user of the
copyrightable work only the contract of sale, but also a license contract.45 The license contract
governs the legal relation between the publisher and end-user in the respect of the use of the
copyrightable work. The license (waiver, consent) itself is permission given to end-user (or
anybody else) to use the copyrightable work in a certain way.46 The license is in some legal
orders qualified as legal transaction (Rechtsgäschaft), like for example in Switzerland47 and
probably Croatia,48 and in some legal systems has different legal nature, like for example in
Germany49 and Austria50. The license contract is a type of contract which can serve as a legal
basis for the disposition of copyright or a particular right derived out of the copyright.51
45
The license agreement or license contract is widely accepted term. Even in German law which was in first half
of XX century resilient to foreign and Latin legal terminology license contract is known as Lizenzvertrag.
Whether it is necessary to conclude the license contract in every case when materialized copyrightable work is
sold is another question.
46
H.-P. Götting: Personality Rights as Intellectual Property Rights, Recent Developments in IP Law,
Uniwersytet Jagielloński, 2007, p. 24.
47
A. K. Schnyder, in: H. Honsell, N. P. Vogt, Th. Geiser (Hrsg.), Baseler Kommentar zum Schweizerischen
Privatrecht, Obligationenrecht I, Art. 1-529 OR, 3. Auflage, Helbing & Lichtenhahn, Basel – Genf – München,
2003, pp. 390-391; I. Schwenzer: Schweizerisches Obligationenrecht Allgemeiner Teil, Dritte, überarbeitete
Auflage, Stämpfli Verlag AG Bern, 2003, p. 316.
48
Legal nature of license/consent in the field of the personality rights was discussed only on few occasions, and
different authors had different views. See, for example: N. Gavella: Osobna prava (Personality rights), Pravni
fakultet Sveučilišta u Zagrebu, Zagreb, 2000, pp. 39, 58-59; P. Klarić (ed.): Odgovornost za neimovinsku štetu
zbog povrede prava osobnosti (Civil law liability for infringement of personality rights), Narodne novine,
Zagreb, 2006, pp. 192-193.
49
W. Kohte: Die rechtfertigende Einwilligung, Archiv für die civilistische Praxis, 185. Band, 1985, Heft 2, 108,
116.
50
H. Barta: Zivilrecht, Grundriss und Einführung in das Rechtsdenken, Teil 1, WUV Universitätsverlag, Wien,
2004, pp. 685-686.
51
The issue of classification of the different types of contracts which can have the role of a legal basis for the
disposition of the copyright would be typically interesting for Continental European scholars and legal
practitioners. This is despite the fact that freedom of contract actually means that the contracting parties can
conclude any type of contract regardless of the title of contract and regardless of the fact whether the contract
which they have concluded is included in the list of so-called nominate contracts. As long as contract is not
illegal in its contest, the contract will be valid. However, legal scholars point out that catalog of contracts which
can be found in civil codes and other sources of law indirectly brings the principle of freedom of contract in
question. See E. Bucher: Hundert Jahre schweizerisches Obligationenrecht: Wo stehen wir heute im
Vertragsrecht? Referat für den Schweizerischen Juristenverein (1983), in: Zeitschrift für Schweizerisches Recht
(ZSR) n.F. 102 II (1983), pp. 317-318. (http://www.eugenbucher.ch/pdf_files/29.pdf 12. 9. 2008.). Proper
qualification (determining the legal nature) of the concrete contract is important because XIX. and XX. century
codifications of civil law regulate few dozens specific types of contracts. These regulations contain different
provisions for each type of contract. Determining the legal nature of a specific contract is necessary because
aforementioned provisions for specific contracts apply on concrete contract unless contracting parties have not
excluded application (ius dispositivum), regardless of the fact that parties omission to exclude them was not
deliberate. Proper qualification is also important because of the application of ius cogens. Some contracts have to
concluded in written form (provision which prescribes written form is ius cogens). If contracting parties make
12
In Croatian law license contract is regulated as nominate contract by Civil Obligations Act
(hereinafter COA).52 The COA regulation on the license contract defines the license contract
as a contract whereby one party (license provider) undertakes the obligation to transfer on
other party (license acquirer) right or partial right to exploit invention, knowledge and
experience (know-how), trademark, pattern or model, and license acquirer undertakes the
obligation to pay the fee.53, 54 From one point of view the fact that COA regulation on license
contract does not mention copyright does not exclude application of the provision of the COA
on license contracts. Even if not directly applicable on copyright transfer transactions mutatis
mutandis application seems to be acceptable.
However, different approach can be also justified. The license contract as regulated by COA
does not cover licensing copyrightable works which is obvious from the definition of the
license contract. One should also bear in mind that in Croatian law there is long tradition of
division between copyright law and legislation which regulates this area and different sources
of contract law. The license contract regulated by the COA plays significant role as a legal
basis for the transfer of industrial property rights, and eventhough industrial property law
together with copyright law forms intellectual property law, these are two separate category.
The one of the most important differences is that copyright originally belongs to the creator of
the copyrightable work, and can not be (completely) transferred to other persons, because of
the moral rights. It should also be mentioned that eventhough Croatian civil law belongs to
so-called monistic legal orders, which means that as a matter of principles both civil law and
commercial law are governed by the same set of rules, in many different aspect commercial
law prevails. 55 The main legal source for law of obligations (contract law, civil law liability,
mistake in qualifying contract that they have concluded, and for example think that their contract is publishing
contract regarding periodicals (which is in Croatian law informal contract), but the proper qualification is regular
publishing contract which has to be in written form, their mistake regarding qualification can lead to nullity of
contract.
52
Official Gazette of Republic of Croatia 35/05, 41/08.
53
Art. 699. COA.
54
According to legal literature license contract in the respect of know-how belong to so-called pseudo-licenses
(E. Bucher: Obligationenrecht Besonderer Teil, Schulthess Polygraphischer Verlag, Zürich, 1988, p. 39.
http://www.eugenbucher.ch/tempor_ORAT.html, 11. 9. 2008.). For the transfer of know how it is not relevant to
give/obtain license, because know how is not an intellectual property (unless it is at the same time patent), but to
transfer classified information. See Z. Parać: Patntirani izumi i know-how kao predmet ugovora o licenci
(Patented Inventions and Know-How as the Subject-Matter of Licensing Contracts), Zbornik Pravnog fakulteta u
Zagrebu, 36 (3-4), 1986, pp. 489-490.
55
On the division between monistic and dualistic private law systems see L. Vékás, Privatrechtsreform in einem
Transformationsland, in: Basedow/Drobnig/Ellger/Hopt/Kötz/Kulms/Mestmäcker,75 Jahre Max-Planck-Institut
für Privatrecht, Mohr Siebeck, 2001, p. 1056.
13
unjustified enrichment, negotiorum gestio, and unilateral declarations of intent) the COA is to
large extent more adopted to commercial environment.56 This fact can be decisive in process
of determining the scope of application of the provisions of the COA on license contract. If
one takes into the account that legal definition of license contract (Art. 699. COA) mentions
only industrial property and that the COA itself tends to be of more commercial then civil law
regulations nature the final conclusion can be that the license contract does not fall into the
category of copyright contracts. Copyright transactions, unlike industrial property right
transactions, do not belong to commercial law. “Commercial” character of COA does not
exclude application of general part of contract law on different contracts of copyright law, but
it does exclude application of COA regulation on specific contracts on copyright contracts.
The COA's provisions on license contract are not relevant for the licensing the copyrightable
works, but this does not exclude the possibility to conclude license contract regarding the
copyrightable work. Therefore, in Croatian law the license contract can be concluded between
the copyright holder and end-user of copyrightable work, but as innominate contract. This is
not so strange because in the comparative law there are examples in which regardless of the
fact that legislation limits the scope of application of certain provision both theory and
practice accept the possibility to conclude the same type of the contract outside of the scope
of application.57
Standard licensing contracts are typical in the case of consumer licensing contracts. Because
of the fact that both consumers and authors are in the weaker positions in comparison to their
contractual counterparts consumer protection law and copyright law each in its own area try
to protect consumers and authors by "protecting them from themselves".58 More specific in
the field of the copyright law moral rights have protective purpose in the respect of the
author.59 Being inalienable even if author transfers moral right to another person the transfer
will have no legal effect (the contract will be null and void), which means that moral rights
56
For example general rule on limitations prescribe that period of limitation is only 5 years, rules on contract law
are to large extent more adopted to transaction of goods, which are object of commercial and consumer
transaction. Pure civil law transactions do not have for the object so often goods (movable generic things) but
species or real estate. The COA only in the version of the year 2005 regulates typical gratuitous transactions such
as donations and commodatum (although old COA mentions gratuitous transactions on abstract level), as well as
non-gratuitous contracts such as lifelong maintenance which is also strong argument in the favor of more
commercial law approach.
57
See, for example, H. Sprau, in: Palandt Bürgerliches Gesetzbuch, 63. Auflage, Verlag C. H. Beck München,
2004., pp. 1153-1154.
58
H.-P. Götting, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang, o.c., p. 64.
59
C. P. Rigamonti, o.c., p. 399.
14
will still belong to author.60 In the case of consumer license contract consumer protection
legislation applies, and consequences are nullity of unfair standard contracts.
4. Practical examples of conflict between standard contracts of multinational
companies and national copyright contract law
The conflict between standard contracts of multinational companies (and other legal entities)
and national copyright contract law is particularly enhanced when one deals with legal
relations with international law. The standard contracts are sometimes in foreign language and
foreign legal terminology is used. Foreign legal terminology can be difficult to translate. An
obvious example is the notion copyright. Though there is direct and unproblematic translation
to French (droit d'auteur), German (Urheberrecht), or indeed Croatian language (autorsko
pravo), if the standard contract is drafted in English language the question of the content of
term copyright can not be avoided. The word copyright can be translated, for example in
French language as droit d'auteur, but it can also mean copyright as traditionally understood
in common law, as economic rights, not the morale rights. If for example clause of standard
contract mentions transfer of copyright it could be contrary to ius cogens if it is interpreted as
unity of economic and moral rights, because in legal systems of Continental Europe moral
rights are inalienable. However, if standard contracts contains expression on transfer of
copyright understood "only" as economic rights its validity is not problematic.61 Therefore
the conflict between standard contract of multinational companies and national copyright
contract law can exist on the linguistic and systematic level. There are examples for this type
of conflict in the field of Croatian higher education and science. Scientific projects are funded
by the state and public funds. One of these funds is Unity trough Knowledge
Fund
(hereinafter the UKF). The funding in the framework of the UKF is provided on the basis of
the standard contract which is drafted in English and which contains clauses on copyright
regarding scientific work within the project. The English language and copyright terminology
60
The only exception is transfer on the basis of the legal transactions and transferes mortis causa (e.g. last wills,
intestate inheritance). See C. P. Rigamonti, o.c., p. 361.
61
The different meaning of the notion copyright in common law and civil law is the reason why some legal
writers when writing on copyright in European Continent instead of the copyright use notion author's right,
authorial right, etc. See E. Adeney, o.c., p. 221.
15
close to common law is very likely caused by the fact that UKF has financial ties to World
Bank.
The abovementioned example of the UKF Agreement contains following provision:
“Foreground Intellectual Property financed by the UKF shall be owned during the duration
of the project as stipulated in Article 3.1 solely by the UKF if not otherwise regulated by IPR
transfer agreement signed by the UKF and the Croatian organization.“62
63
This provision
could be invalid if Croatian law is applicable, because the Croatian copyright law recognizes
moral rights as inalienable rights and it does not accept work for hire doctrine. Following
provision could be also invalid: "In the event that Croatian organization does not provide
proof or evidence of diligent efforts to exploit the Foreground Intellectual Property within a
period of 1 year after the project end date, the UKF may request the ownership of
Foreground Intellectual Property financed by the UKF." This provision comprehands transfer
of the IPR (copyright included) as penalty. Eventhough copyright law does not regulate
transfer of the copyright as a penalty in the case of breach of contract, the inalienability of the
moral rights once more prevents the validity of such penalty clauses.
The conflict between standard contracts of multinational companies and national copyright
contract law can materialized also if the standard contract is translated into the language of
national copyright contract law. This can occur if original standard contract is drafted for
example, in the manner of the common law copyright system and then translated and applies
in civil law systems. Substantive difference between these two systems can lead to a conflict
between standard contract of multinational companies and national copyright contract law.
The same is true regarding monistic and dualistic systems of copyright within civil law
jurisdictions.
Practical examples of conflict between standard contracts of multinational company and
national copyright contract law are common when publisher belongs to common law
jurisdiction, and author has habitual residence in civil law legal order. Standard publishing
62
"Intellectual Property Rights (IPR) means all copyright and neighboring rights, all rights in relation to
inventions (including patent rights), plant varieties, registered and unregistered trademarks (including service
marks), registered designs, confidential information (including trade secrets and know how) and circuit layouts,
and all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields."
63
"Foreground Intellectual Property means Intellectual Property Rights arising from the research and
development undertaken within this project after the date of signature of this agreement."
16
contracts of common law publishers contain clauses on work for hire which means that
creator of the copyrightable works is not regarded as authors at all. Work for hire doctrine is
generally not accepted in civil law jurisdictions,64 and if in particular case law of the civil law
country is applicable this can endanger the validity of the contract. Additional clauses in such
contract sometimes state that to the extent that any portion of work is not deemed to be work
made for hire author transfers copyright to the publisher to the full extant, which includes at
least some moral rights (e.g. right of integrity if publisher is entitled to revise or adapt
copyrightable work and particularly if publisher is entitled to transfer the revise or adapt
copyrightable work to the third person). Inalienable character moral rights cannot be alter by
contracting parties, because it is determined by ius cognes and consequently any contract
clause contrary to ius cognes is invalid.
The standard contract of multinational companies can be in the conflict with national
copyright contract law not only in contractual relations between the author and multinational
publishing company, but also in the field of the license contracts. If, for example, standard
license contract concluded by the publisher and end-user of the copyrightable works contains
the provision contrary to the national copyright contract law.
It was mentioned earlier that license contracts can appear as a standard copyright contract,
which can involve application of the consumer protection legislation. However, license
contract in the field of copyright are not exclusively connected to consumer contracts. In legal
practice license contracts are concluded between publishers, but also between authors and
publishers. In later case by concluding license contract instead of the publishing contract
publishers do not undertake obligation to publish the work for remuneration, and for example
undertake only obligation to deliver the copy of copyrightable work and/or to sell one or more
copies to the author. This is not uncommon practice in the respect of the books that are
created by many different contributors. Only the editor of edition receives the payment and
authors of particular chapters are entitled to "free" copy. In some standard contracts authors
who receive “free” copy are undertaking obligation neither to sell nor to transfer free of
charge copies of the copyrightable work. The invalidity of such provision could be justified
on the following ground. If only consideration/remuneration that author will receive for
his/her work is "free" copy or the right to purchase further copies at discount price. Although
64
See supra fn. 9.
17
it is understandable that publisher can not allow that the author becomes his/her competitor in
distributing copyrightable work the provision of standard contracts can not simply exclude the
possibility that author sells or gives away without compensation at least single copy of the
work.
5. Consequences of invalidity of the standard contract
Both civil law and common law jurisdictions accept two types of invalidity of contracts.
Invalid contracts can be either null and void or avoidable. In the case of nullity of contract
(the contract is null and void) contract "… has no legal force from the moment of its
making."65 The avoidable contracts have full legal effects till the moment of its rescission.
This means that such contract could be voided (or avoided) either by the decision of the court
or declaration of the party, depending on the particular legal system.66
Contracts concluded contrary to applicable ius cogens are null and void, and the same applies
to standard copyright contracts.67 It was earlier mentioned that copyright contracts contrary to
ius cogens will not produce the legal effect. If, for example, publishing contract is contrary to
ius cogens the publisher will be neither entitled nor obliged to publish the work, and the
author will not be entitled to claim the payment. However, exact meaning of the fact that
copyright contract is contrary to ius cogens and therefore null and void depend on the
particular national legal system. In some legal systems even if standard contract is null and
void the transfer of the copyright can occur. This is the consequence of different systems of
transfer of copyright that shall be discussed latter.
Apart from invalidity of the standard contract in some cases when deviation from the national
copyright contract law are result of translation errors and inconsistencies, another remedy is
available – the interpretation of contract. The interpretation of the standard contract is based
on the so-called contra proferentem rule which means that ambiguous standard contract
clauses will be interpreted against the party who drafted the standard contract. However, the
interpretation of the standard contract can not save the validity of the contract, so it can serve
65
E. A. Martin (ed.): A Dictionary of Law, Oxford, Oxford University Press, 1997, p. 494.
E. A. Martin (ed.), o.c., p. 494.; L. Rutherford, S. Bone (eds.): Osborn's Concise Law Dictionary, 8 th edition,
Sweet & Maxwell, London, 1993, p. 344.
67
E. A. Martin (ed.), o.c., p. 221.; L. Rutherford, S. Bone (eds.), o.c., p. 169.
66
18
only as an auxiliary measure, to deal with the conflict between the standard contracts of
multinational companies and national copyright contract law.
A copyright law is not isolated part from the rest of the legal system. The copyright law, like
other legal branches, has basis in the constitutional law and international law. 68 The
importance of the constitutional law for the copyright law arises from the fact that some
constitutions contain guaranties in the respect of freedom of artistic and scientific work which
also covers certain rights regarding the “products” of these activities. It should be also
mentioned that the constitutional law protects the property, and eventhough property in
standard sense does not cover intellectual property – the copyrightable work, the
constitutional guaranty should be understood in the broader meaning covering not only
standard property, but also the intellectual property.69
The copyright law is mostly connected with the private law. Copyright law is a part of system
of the private law.70 Therefore copyright law heavily relies on the provisions which belong to
different branches of the civil law such as contract law, law on extra-contractual obligations
(torts, restitution) and property law.71 Rules on copyright law in most of the legal orders in
Continental Europe and common law form separate legal discipline and do not constitute part
of civil law (general part of the private law).
72
However, legal dispositions conducted by
authors and other copyright holders are to large extent regulated by civil law, because
disposition of rights (copyright, but also any other right in private law73) are done on the basis
of contracts.74
A. Dietz: Constitutional and Quasi-Constitutional Clauses for Justification of Authors’ Rights (Copyright) –
From Past to Future, Zbornik Hrvatskog društva za autorsko pravo, Zagreb 2005, vol. 6, pp. 1-13. For American
law see R. Versteeg: The Roman Law Roots of Copyright, Maryland Law Review, 2000, 59, p. 524. For French
law see I. Henneberg, o.c., p. 39. See also Art. 68. of Croatian Constitution and I. Gliha: Autorsko pravo, o.c., p.
1.
69
N. Gavella, in N. Gavella et al.: Stvarno pravo (Real Property Law), Narodne novine, Zagreb, 2007, p. 342.
70
This is true regardless of the fact that infringement of the copyright can amount to the criminal responsibility.
The criminal responsibility is a separate consequence which exist not only in connection to the copyright
infringement but also as a consequence of the infringement of ownership, inflicting the damage, etc.
71
According to the Pandectist system civil law is divided on general part, property law, law of obligations,
inheritance law and family law.
72
There are exceptions. The new Dutch Civil Code contains provisions on copyright law. Surprisingly, the same
was with the old Soviet Civil Code (RSFRS). The new Russian Civil Code also follows the same path.
73
Common law systems are unlike legal orders of continental Europe unfamiliar with the notion of subjective
(civil) right, and there is a risk of misunderstanding if subjective civil rights are understood as term connected
with civil rights and liberties. Therefore it should be clearly stated that subjective civil right in this paper is
equivalent of German notion of subjektives Recht. Objektives Recht in this context means a law (rules).
Subjective right is interest protected by the (objective) law (Ihering) or legally recognized power of will of the
individual (Windscheid). One of the examples for recognition of subjective rights, at least at the level of
terminology, not only in civil law orders but also in common law is copyright. The copyright (or right of author)
68
19
Rules on contract law are relevant for the subject-matter of this paper, as demonstrated more
then once in this paper, because they operate closely together with rules on copyright when
question of validity of the standard copyright contract is raised. However, discussion on
conflict between standard contracts of multinational companies and national copyright
contract law does not end at the point when we reach the conclusion that standard contract is
null and void. If standard copyright contract law is null and void, because it is contrary to
national ius cognes this still does not exclude the possibility that copyright is transferred from
one party to another, at least in some legal systems. In legal systems like for example
common law or French law acquisition of the ownership or copyright is direct consequence of
the conclusion of (valid) contract (common law, French law).75 In Austrian, Swiss and
Croatian law, transfer of the ownership or copyright is a separate from the contract, but for
transfer of the ownership or copyright validity of contract is required (Kausalitätsprinzip).76
Contract law is also important in legal orders which separate the issue of validity of a contract
from the transfer of the right, because the transfer without valid contract has a restitution as a
consequence.77 For example, in German law transfer of rights on the basis of contract is in
most
of
the
cases
governed
by
so-called
Abstraktionsprinzip.
According
to
Abstraktionsprinzip right will be acquired by acquirer regardless of the fact that contract was
null and void. However, the former holder of the right is entitled to claim the return of the
right. In this respect not only contract law is applicable but also provisions of extracontractual law (civil law liability, unjustified enrichment, negotiorum gestio) which regulate
restitution. Regardless of the fact that transfer of copyright takes place even if contract is null
and void, invalidity of contract has consequences in the field of copyright because transfer of
copyright on the basis of invalid contract leads to return of the copyright back to his/her
previous holder.
is subjective right, and copyright law is objective law. Terminological distinction between subjective right and
objective law is in some legal orders necessary, because German and French language does not differentiate
words right and law.
74
Disposition of rights can also be made on the basis of judicial decision, inheritance, and so forth.
75
H.-P. Götting, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang, o.c., 69.; M. Rintelen, o.c., p. 252.
76
This idea has long tradition in Austrian law (M. Rintelen, o.c., p. 254.). See also H. Honsell: Tradition und
Zession – kausal oder abstract?, pp. 2-5
77
Both Kausalitätsprinzip and Abstraktionsprinzip recognized the division between contract which is the legal
basis for contractual relation in which contracting parties are entitled to claim the performance, and transfer of
right via performance (Trennungsprinzip). Therefore the buyer of the thing does not become the owner in the
moment of conclusion of contract (in this moment he/she is entitled to claim the delivery). He/she becomes the
owner at the moment of the delivery, which means that at this moment transfer of right (ownership) actually
acquired (titulus and modus acquirendi). Differentiation between conclusion of contract and transfer of
subjective right does not exclude the possibility that both conclusion of contract and transfer of subjective right
occur at the same moment (M. Rintelen, o.c., p. 252.).
20
The abovementioned systems of transfers are consequence of the application of the property
law regulations on intellectual property rights. However, the application of general property
law on intellectual property is not so straightforward in some legal orders. “Standard”
property law deals with the rights which exist regarding tangible property (res corporals), not
the rights on intangible property which are in different legal regime (e.g. intellectual property
law). Regardless of the fact that at least in Germanic legal family property law does not apply
on copyright or any other intellectual property right, intellectual property law was developed
under strong influence of property law.78 The same applies to the issue of the contracts and
copyright law. Despite the fact that contract law is many legal orders of the Continental
Europe sharply distinguished from the property law,79 the contract law borrows certain
properties of the property law. For example, the Abstraktionsprinzip and Kausalitätsprinzip
which are in German law essential for the acquisition of an ownership, are also discussed in
the respect of acquiring of the other rights on the basis of the contract. The same is true in the
respect of the acquisition of the copyright or others intellectual property rights (patents,
trademark, etc.80). “Standard” property law has also strong influence on private international
law in the field of copyright. Some authors stated that in absence of more specific legislation
on private international law in the field of copyright some principles can be “… derived from
the analogy with real property. ”81
The system of transfer of copyright is important for the understanding of the conflict between
the standard contracts of multinational companies and national copyright law, because the
(in)validity of the standard contract of multinational companies in the field of the copyright
which are contrary to national ius cogens as such does not reveal the most important issue –
whether the copyright can be transferred on the basis of the standard contract contrary to ius
cognes. There is another reason why the system of transfer of copyright is relevant for
subject-matter of this paper. Parties of the contract can not alter the system of transfer and
contractual clauses which would deviate from system of transfer according to the applicable
law are invalid regardless of the fact whether they are part of standard contract or if they are
78
Object of the ownership is a property which is in Germanic legal family a thing (tangible part of nature).
Intellectual property has no tangible nature and therefore can not be object of ownership. See H.-P. Götting:
Persönlichkeitsrechte als Vermögensrechte, J.C.B. Mohr (Paul Siebeck), Tübingen, 1995, pp. 9-11.
79
K. Zweigert, H. Kötz, o.c., p. 145.
80
L. Pahlow: Lizenz und Lizenzvertrag im Recht des Geistigen Eigentums, Mohr Siebeck, Tübingen, 2006, pp.
207-208.
81
E. Adeney, o.c., p. 627.
21
individually negotiated. If, for example, contractual clause states that publisher is entitled to
exploit the copyrightable work even if contract itself is null and void, such clause would be
also invalid in legal orders that request the validity of the contract as a precondition for the
transfer of the copyrightable work.
6. Private international law
Private international law is also relevant for copyright law. Some authors particularly
emphasize the fact that in the world today the number of contractual relations with the
international character is increasing, because it is very easy to conclude the contract with the
foreign service provider via Internet.82 However, the relation between private international
law and copyright contract law is separate subject-matter and only few most important issues
are presented.
The copyright law rarely regulates the private international law issues which means that
general rules on the private international law applies.83 In resolving private international law
issues in copyright contract law special attention should be made to a fact that infringement of
the copyright can be consequence of the infringement of contract (contractual liability) or
infringement of rights which arise from the law (extra-contractual liability).84 The copyright is
in the terminology of the civil law absolute right which means that its holder “… can assert
[the right] against all the world”.85 Therefore, absolute right can be infringed by subject who
are not in any particular relation with the holder of the right (of a contractual or other nature).
However, that characteristic does not exclude the application of the rules on contractual
liability. If the person who has infringed the copyright was also in a contractual relation with
the holder of the copyright (e.g. the publisher with the author) both copyright and the contract
are infringed. In legal systems which accept non-cumul principle (France) party of the
contract whose rights have been infringed by other party can not invoke on tort (extracontractual liability).86 If particular jurisdiction permits cumulating of both contractual and
82
P.
K.
Yu:
Conflict
of
Laws
Issues
in
International
Copyright
Cases
(http://www.peteryu.com/gigalaw0401.pdf, 11. 9. 2008.).
83
P. Katzenberger, in: F.-K. Beier, H.-P. Götting, M. Lehmann, R. Moufang, o.c., p. 229.
84
I. Henneberg, o.c., p. 200; C. P. Rigamonti, pp. 368, 372.
85
K. Zweigert, H. Kötz, o.c., p. 145.
86
B. Hess, Th. Pfeiffer, P. Schlosser: Study JLS/C4/2005/03, Report on the Application of Regulation Brussels I
in the Member States, RUPRECHT-KARLS-UNIVERSITÄT HEIDELBERG, INSTITUT FÜR
AUSLÄNDISCHES UND INTERNATIONALES PRIVAT- UND WIRTSCHAFTSRECHT, pp. 104-105.
http://ec.europa.eu/justice_home/doc_centre/civil/studies/doc/study_application_brussels_1_en.pdf (25.9.2008.)
22
extra-contractual liability two different set of rules can play the role of the applicable law.
Consequently, applicable law should be determined on the basis of the private international
law on contractual and/or extra-contractual liability depending on the facts of the case.
Second important private international law issue is the possibility to include the choice of law
clause in standard contract. In consumer contracts such clause can not deprive the consumer
of the protection granted to him/her by consumer's national law.87 This rule also applies on
consumer copyright contracts such as license contract with end-consumers. The private
international law takes into the account the fact of economic inequality of the contracting
parties in the respect of particular contracts such as consumer contract or labor contracts.88
However, in the respect other legal relations copyright contracts are not mentioned, and
general rules applies. Explicit provision regarding choice of law in consumer standard
contract is probably most important tool when one deals with standard contract of
multinational company. This is so because choice of law clause in standard contract “in favor”
of multinational company eliminates the conflict between standard contract and national
copyright contract law in a way that can hardly be described as fair. By upholding the
application of author’s national law conflict still exist but at the same time certain rights of
author are protected.
7. Conclusion
If standard contract of multinational company is null and void, because it is contrary to
national ius cogens inequality regarding economic power between multinational publishing
company and author, or multinational publishing company and end-consumer is compensated.
However, in many cases eventhough the copyright contract is invalid the parties are behaving
like the contract is valid. Sometimes it is consequence of inadequate knowledge of authors
and end-consumer of copyrightable work, and sometimes authors and end-consumers are
simply accepting the reality. The fact is that multinational publishing companies are trying to
87
Art. 6/2 of hte Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts: Member
States shall take the necessary measures to ensure that the consumer does not lose the protection granted by this
Directive by virtue of the choice of the law of a non-Member country as the law applicable to the contract if the
latter has a close connection with the territory of the Member States.
88
K. Sajko: Europsko međunarodno privatno pravo ugovornih obveza de lege lata i ferenda (European Private
International Law of Contractual Obligations de lege lata and ferenda) , Zbornik Pravnog fakulteta u Zagrebu,
Vol. 56, p. 725.
23
ensure highest possible degree of benefits from contracts with authors and end-consumers and
market competition does not pressure publishers to decrease the benefits in favor of authors
and others. When contractual parties behave like the contract is valid eventhough it is not, in
some cases this can lead to Heilung or maybe to the creation of so-called de facto contract
(faktische Vertrag), but the degree of legal certainty regarding this consequences is not high.89
This may serve as an argument in the favor of a different approach. If invalid contracts (or
contract) clauses are in most of the cases executed and issue of invalidity is not raised it might
be better to alter the legislation, and in the place of nullity impose different sanction – if
contract is invalid for the reason that it is contrary to copyright law it could be “only”
voidable. Voidability is also more acceptable solution because in the case of voidable contract
only one party has the right to avoid the contract. In this case it is the holder of copyright if
standard contracts were drafted by the other contracting party. This would be in accordance
with the logic of the contra proferentem rule, though not in interpretation, but in assessing the
validity of the contract.
As the last point, one should take into the consideration experience from the past. The
standard contract terms are usually prepared by publishing companies, but they were also
developed within the copyright associations. Associations of authors could try to develop the
standard contracts adapted to particular national law, bearing in mind of risks in taking over
such initiatives. Namely, the competition protection legislation but also the fact that by
drafting the standard contracts authors could be qualified as persons who drafted the standard
contracts, and consequently legislation on standard contracts would start to work against
them. It is particularly important to remind that standard contracts drafted by the copyright
organization in the first half of the XX. century served as a legal basis to establish cartels,
which from today’s point of view could jeopardize the effort to develop "uniform" standard
contracts. However, the benefits of such approach excide the disadvantages. In the case of
national copyright associations which are members of international organizations the standard
contracts of particular national associations could be discussed and maybe even agreed at the
level which would give certain “legality” to standard contracts and encourage multinational
companies to accept them. The reason for accepting “other people’s” standard contracts
could be following. For the multinational company it is far better to accept standard contract
R. Zimmermann, o.c., p. 22; A. Koller, in: A. Koller, A. K. Schnyder, J. N. Druey: Theo Guhl – Das
Schweizerische Obligationenrecht, 9. Auflage, Schulthess, Zürich, 2000, p. 111; H. Koziol, in: H. Koziol, R.
Welser, Grundriss des bürgerlichen Rechts, Band II, Schuldrecht Allgemeiner Teil, Schuldrecht Besonderer Teil,
Erbrecht, 12., neubearbeitete Auflage, Manzsche Verlags- und Universitätsbuchhandlung, Wien, 2001, p. 125
89
24
drafted by national copyright association “approved” at the international level, then to
discover during the civil litigation that national court holds the position that company’s
standard contract is invalid. Of course, this reasoning is valid only in the case that empirical
data confirm high number of invalid standard contract of multinational companies.
The development of standard contracts by the third party is already reality. The Creative
Commons licenses developed by the Stanford University in the year 2001 are obvious
example.90 The experience learned from the Creative Commons licenses is also useful,
regardless of the fact that the jurisprudence did not have enough time to produce significant
number of decisions on validity and effects of Creative Commons licenses. The most
important lesson of the Creative Commons license is that it can not operate independently of
the national copyright contract law. The Creative Commons licenses are adopted to particular
legal orders, with the particular emphasis on explanation of legal consequences of the
Creative Commons licenses in the respect of specific national law.91
90
See R. Mantz, o.c., p. 20. The Creative Commons license can be applicable both to online and offline works.
The only difference between online and offline works is in technology. Offline works lack metadata in offline
works. See Frequently Asked Questions at Creative Commons web site (11. 9. 2008.)
http://wiki.creativecommons.org/FAQ#Can_I_apply_a_Creative_Commons_license_to_an_offline_work.3F
91
See for example Creative Commons Canada (http://creativecommons.ca/index.php?p=moralrights, 23. 7.
2008.)
or
N.
Hendriks:
Developing
CC
Licenses
for
Dutch
Creatives
(http://fr.creativecommons.org/articles/netherlands.htm, 23. 7. 2008.)
25