Copyright in B2B contracts concluded with a foreign contractor - practical meaning

Let’s start with the introduction to the topic of copyright law.

According to Polish law, the concept of a work has been defined as any sign of creative activity of an individual nature, established in any form, regardless of the value, purpose and manner of expression. Copyrights can be divided into copyrights (economic rights) and moral rights. The above mentioned division is significant in practice.

Economic rights include the author’s right to use and dispose of the work in all fields of exploitation. However, moral rights protect the creator’s relation with the work, unlimited in time and not subject to waiver or transfer. As a matter of fact, only economic rights can be transferred to other entities, as they are transferable rights. In the case of moral rights, regardless of the provisions included in the contract, they will be owed only to the creator, and the creator will not be able to transfer them to any other entity. An important difference between economic rights and moral rights is also the fact that economic rights are limited in time, and therefore expire after the time specified by law. Moral rights are unlimited in time, i.e. they do not expire even after the creator’s death, and the author remains the creator of his work forever.

The purpose of introducing copyright provisions to B2B contracts in the international trade is to define clearly who will be entitled to copyrights to works created in the scope of performance of the contract. The above is important because, as a rule, economic rights, unless they are transferred, will be owed by the creator. Example – if a contract is made with a foreign contractor for the creation of advertising spots, but the contract does not include the transfer of economic copyrights to the created spots, the creator will still retain the copyrights to the work. The entity that commissioned the creation of those spots will not have legal permission to use them for their own business purposes, such as publishing them on their website or social media profiles, as it do not possess the copyrights to the created works.

Therefore, if the parties have agreed that the subject of the contract is the transfer of economic copyrights to works created as a result of its performance, this must be reflected in the contract in an appropriate form.

The statement of a contractual provision concerning the protection of copyright is not always justified. When considering concluding into a contract, it is important to evaluate the nature of the contract and the likelihood of creating a work that would be subject to copyright law during its execution. For instance, it would be unnecessary to include a copyright clause in a contract with a foreign contractor for the supply of food products. In such a case, it can be objectively determined that the performance of the contract for the international supply of food products will not give rise to any subject of copyright protection.

From the creator’s point of view, these will include the following questions:

• what is the subject of the contract?
• is it possible that a work to be created under the contract falls under the definition of copyright law?
• do I want the copyright to remain with me as the creator in any extent?
• what remuneration for the transfer of economic rights will satisfy me?
• how to protect my moral rights to works?
• can the absence of copyright protection in a contract for works created during its performance result in negative consequences for my business?

On the other hand, from the contractor’s point of view, the following questions should apply:

• what is the subject of the contract?
• is it possible that a work to be created under the contract falls under the definition of copyright law?
• do I want the copyrights to the works created in the scope of the contract to be transferred to me?
• can the lack of transfer of economic copyrights prevent me or make it difficult for me to fully use the subject of the contract that I’m paying for?
• based on the subject of the contract and the intended use of the works, is it advisable to include provisions regarding moral rights in the contract, such as obtaining the creator’s consent to perform moral rights on his behalf or securing the creator’s promise not to perform his moral rights in a way that would prevent my use of the works?
• can the absence of copyright protection in a contract for works created during its performance result in negative consequences for my business?

The applicable law in a contract can have implications for copyright protection as well. Copyright law varies across different countries and certain aspects may be regulated differently in foreign jurisdictions. As such, it is not safe to assume that the law of another country will align with national law when it comes to issues such as claims stemming from infringement of economic or moral rights, or the proper form for concluding a contract.

In the agreement transferring economic copyrights, it is necessary to remember to indicate the fields of exploitation, i.e. individual separate ways of using the work that is the subject of the agreement. The transfer of copyrights will take place only within the fields of exploitation clearly indicated in the contract.

It is crucial to note that under Polish law, any agreement transferring economic rights must be concluded in written form. Failure to comply with this requirement renders the agreement void. To satisfy the written form requirement, it is sufficient to sign a document that contains the substance of the intended agreement. In addition, it is possible to enter into a contract by exchanging documents that cover the respective declarations of intent, each of which must be signed by one of the parties.

It is worth noting that both legal doctrine and judicature recognize the possibility of “conversion,” which is a reclassification of an invalid agreement transferring economic copyrights into an non-exclusive license that specifies the same scope of rights. A non-exclusive license agreement can be executed without any formality or payment required. Such an agreement authorizes the use of a work on the basis of an agreement that specifies the scope, location, and duration of use, and the licensee does not acquire copyrights to the work.

Given the significance of copyright regulations not just during the execution of a contract, but also after the fulfillment of the obligations arising from it, it is advisable to ensure that these provisions are drafted in careful and precise way.

Joanna Lubecka
attorney