Intellectual property

How to protect copyright in employment relationships?

Lee Laanemäe Lee Laanemäe

Co-author: Kristel Tiits, Grant Thornton Baltic, legal adviser

At first glance, the concept of copyright may appear quite simple – copyright is a right subsisting in literary, artistic and scientific works[1]. The choice of terminology might leave the impression that copyright subsists in books, paintings or university theses.

Nonetheless, mention must be made of the range of other works that are considered works in the meaning of the Copyright Act. For example, speeches, lectures and addresses are covered by copyright[2]. This article provides an overview of the work protected by copyright, the rights protected within the framework of employment relations and the dispute resolution procedures.

Content of copyright

As previously above, copyright is a right subsisting in certain types of works – literary, artistic and scientific works. Furthermore, speeches, lectures and addresses which consist of words and which are expressed orally[3] as well as scripts[4], opinions, reviews and expert opinions[5] are protected by copyright. These are just a few examples of copyright-protected works. The general principle of copyright is the following: „worksmeans any original results in the literary, artistic or scientific domain which are expressed in an objective form and can be perceived and reproduced in this form either directly or by means of technical devices[6]. A work is original only if it is the author’s own intellectual creation[7]. Mention must be made of the fact that copyright in a work is created with the creation of the work[8]. Registration or deposit of a work or completion of other formalities is not required for the creation of copyright[9]. This means that copyright is automatic and does not depend, for example, on whether the literary work is published or not. Even poems hidden in the drawer are protected by copyright. The term of protection of copyright is the life of the author and seventy years after his or her death.[10]

Moral rights and economic rights constitute the content of copyright[11]. Moral rights are inseparable from the author’s person and non-transferable[12], while economic rights are transferable as single rights or a set of rights, with no difference whether this is done for a charge or free of charge[13]. Moral rights include, for example, the right to appear in public as the creator of the work[14], request that the use of the work be terminated, etc. Economic rights, on the other hand, are governed by the principle that the author enjoys the exclusive right to use the author’s work in any manner, to reproduce and distribute the work, as well as to authorise or prohibit the use of the work in a similar manner by other persons and to receive income from such use[15]. We should also mention that the Supreme Court has found that economic rights are automatically transferred to the employer, if the author performs duties of employment on an ongoing basis under an employment contract. This also applies to cases where the author engages in a relationship with a company – for example, if the author is the management board member of the company[16].

Transfer of copyright to the employer. Author's right to remuneration

The author of a work created under an employment contract (or in the public service in the execution of direct duties) enjoys copyright in the work[17]. It should, however, be noted that the economic rights of the author to use the work for the purposes of and to the extent prescribed by the duties of employment are transferred to the employer unless otherwise provided in the employment contract[18]. Thus, unless otherwise agreed in the employment contract, the economic rights of the author are automatically transferred to the employer.  Hence the question: will the author have the right to use the work created in the execution of duties of employment? The answer is yes. However, we must make a distinction between two scenarios:

  1. An author may use the work created in the execution of his or her direct duties independently for the purpose prescribed by the duties only with the prior consent of the employer whereupon mention must be made of the name of the employer. In such case, the author is entitled to receive remuneration for the use of the work![19]
  2. An author may use the work created in the execution of his or her duties independently for a purpose not prescribed by the duties unless otherwise prescribed by the employment contract. If a work is used in such manner, mention must be made of the name of the employer[20]. The Copyright Act does not stipulate the author's direct right to remuneration.

At first glance, it is difficult to make a distinction between these scenarios. The key lies in "independent use". The first scenario, where the author also has the right to receive remuneration, is a case where an employee is given the assignment to prepare a speech for a conference (the employee directly executes an assignment. i.e. executes a direct duty of employment). In such a case, the employee may use the speech only for the purpose prescribed by the duties and on the employer's previous consent (i.e. the employee may give the speech at the conference and publish the text thereafter, for example on the employer's website). In addition, the employee is obliged, at his or her presentation, to make mention of the name of the employer, e.g. within the slideshow. Where the employee wishes to publish the speech or slideshow, e.g. on his or her personal website which is not associated with the employer or the duties of employment, the employee must seek the employer's consent thereof. In such a case, the employee shall have the right to receive from the employer remuneration for the use of the work. The remuneration is to be paid as an addition to the pay (salary), but the payment of the remuneration may also be prescribed in an agreement between the employer and the author[21].

The second scenario, where the Copyright Act does not prescribe the obligation to pay remuneration, is a case where an employee prepares the speech but gives the speech elsewhere (even though the employer did not give the specific assignment). Such a case does not constitute execution of a direct duty of employment. Nonetheless, mention must be made of the name of the employer.

Which claims can be filed in case of infringement of copyright?

It is very important for an employer to specify the employee's duties in the employment contract or job description, as the works created by the employee and protected by copyright, or the economic rights over the work are deemed works created in the execution of duties. Where the employee's duties are specified too narrowly in the employment contract and the created work cannot be considered a work created in the execution of duties, the economic rights over the work will not be automatically transferred to the employer. To avoid possible disputes, we recommend the employer to carefully consider the employee's duties, including single cases which require the economic rights of a work considered important by the employer to be transferred to the employer.

The question of what to do with the author's moral rights should also be considered. Should an exclusive license be acquired for using the author's moral rights? Indeed, this could be the most reasonable solution for an employer. However, the author's right to claim remuneration for the exclusive right must be taken into account.

Copyright infringements – e.g. where a copyright-protected work is used without the authorisation of its author or in case of a dispute over which rights were transferred to the employer through the creation of the work by an employee – can be solved on the parties' agreement or, if the parties fail to reach an agreement, in Harju County Court.

Pursuant to the Law of Obligations Act, in case of unlawful use of a work or an object of related rights, the author or holder of related rights may inter alia claim the following:

  1. compensation for patrimonial and non-patrimonial damage;
  2. termination of the unlawful use thereof and refrainment from further violation;
  3. delivery of the benefits – both monetary and non-monetary – which were received by way of the unlawful use[22].

If, as a result of a violation of copyright legislation, a work or an object of related rights is communicated to the public, reproduced, distributed or altered etc., an entitled person may claim:

  • restoration of the work or object of related rights in the original form;
  • alteration of copies of the work or object of related rights by specific means, or
  • destruction of pirated copies[23].

Summary

In simple terms, copyright is the right over intellectual property. Copyright is gained automatically and requires no separate registration or other completion of formalities. A distinction must be made between moral rights, which are associated with the author's person, and economic rights, which are automatically transferred to the employer in certain cases. It would be wise to always prepare the relevant agreements in writings, and to specify in the employment contract the duties of the employee as widely as possible. This will help to prevent a situation, where the duties prescribed in the employment contract fail to cover all assignments completed by the employee in real life. To prevent disputes, we advise companies, especially in the field of IT, to conclude with employees a separate agreement on intellectual property for major projects. If the duties are specified too narrowly, the economic rights of the work will not be transferred to the employer, with the employee gaining the right to demand remuneration from the employer.

 

Learn more about our legal advisory services

Send us your inquiry

Sources:

[1]  Copyright Act (RT I, 19.03.2019, 55), subsection 4 (1)

[2] Ibid., clause 4 (3) 4)

[3] Ibid.

[4] Ibid., clause 4 (3) 5)

[5] Ibid., clause 4 (3) 20)

[6] Ibid., subsection 4 (2)

[7] Ibid., subsection 4 (2)

[8] Ibid., subsection 7 (1)

[9] Ibid., subsection 7 (3)

[10] Ibid., subsection 38 (1)

[11] Ibid., subsection 11 (1)

[12] Ibid., subsection 11 (2)

[13] Ibid., subsection 11 (3)

[14]  See section 12 of the Copyright Act for information on moral rights

[15]  Subsection 13 (1) of the Copyright Act

[16]  Supreme Court judgment of 23 May 2003 No 3-2-1-39-03, p 23

[17] Ibid., subsection 11 (3)

[18] Ibid.

[19] Ibid., subsection 32 (2)

[20] Ibid., subsection 32 (3)

[21] Ibid., subsection 32 (4)

[22] Ibid., subsection 817 (1)

[23] Ibid., subsection 817 (2)