According to the Ministry of Justice, there were 125 000 programmers in Ukraine in 2018. What`s important, this is amount includes only individual entrepreneurs, not employees. That’s mean that at least 125 000 programmers have been writing the code every day in 2018. Usually the next step after writing the code is its transmission. How to do it correctly to provide the customer with the necessary scope of rights?
Whereas the law specifies that computer programs are protected by copyright, we should pay attention to copyright transfer. But first of all it is important to remind that there are two groups of rights – moral rights and property rights. The first group of rights includes the right to indicate the name/nickname or to forbid such indication, as well as the right to counteract any changes and encroachments on the work (in this case, a computer program). Such moral rights cannot be transferred. Therefore, regardless of whether a computer program was created under a civil or commercial agreement or within the scope of employment, all moral rights remain with the author. But there is a way out of this situation for customers and employers. For example, contracts usually state that the code developer wants to remain anonymous.
As for property rights, they include the right to use the work (modify it, distribute it, etc.), to allow or prohibit its use by other persons. These rights may be transferred to another person.
If we are talking about the transfer of copyright in the framework of labor relations, the legislation regulates the issue of the distribution of property rights in case of absence of an appropriate contract differently. The Supreme Court of Ukraine resolved this conflict, noting that the intellectual property rights of the object created in the course of employment relations belong to both the employee and the employer jointly, unless otherwise stipulated in the contract. We would like to emphasize that this applies to software developed within the framework of employment relationship and does not extend to civil and commercial relations. Another important point here is “unless otherwise is stipulated in the contract” as on practice contracts often stipulate that all property rights are transferred to the employer.
It should be noted that the contract should specify all ways and limits of use of the work, because unforeseen ways are considered not transferred. It is also important to determine when property rights are transferred to the employer. Often it happens when the relevant Act is signed.
If the computer program includes code written by another person the employee must notify the employer about this and use only licensed works. However, if the computer program created under the employment contract includes any elements developed outside the scope of the employment relationship, then it is recommended to prescribe in the contract transfer of rights to such elements.
When copyright is transferred within civil or commercial relations, in practice the relevant provisions are often provided in a service contract, although this is not entirely correct. Because in fact these contracts include the provisions of the contract on the transfer of the rights to use the work, and the rights that do not exist in the moment of such contract conclusion cannot be its subject matter. Therefore, a contract on copyright transfer shall be additionally concluded after software development.
Civil law also provides possibility to order creation of intellectual property and to conclude relevant contract. In this case, the property rights belong to both the creator and the customer jointly, unless otherwise is stipulated in the contract. So it is recommended to prescribe that copyright belongs to the customer even in such type of contracts.
Moreover, provisions of family law regarding the joint ownership of the spouses should be taken into account. Software created by one of the spouses during the marriage is their joint property. Thus in case of a divorce the other spouse may apply to court with a requirement to recognize the agreement void on the grounds that it was concluded without his/her consent or claim the rights to such software.
Finally, it should be mentioned that transfer of intellectual property rights may differ depending on the jurisdiction, which should be kept in mind while concluding agreements with foreigners. Legislation of the United States of America, the United Kingdom, and several other countries includes the concept of work for hire, according to which employer and not the actual creator is considered to be the author. In the same time there is also a possibility to transfer copyright under legislation of such countries, therefore it is important to be attentive while concluding a contract within such jurisdiction. For example, it seems impossible to apply such aconcept if the contractor attracts subcontractors from Ukraine and the relationship between them is governed by the law of Ukraine.