The Supreme Court dealt with a situation in which the contracting parties, in the context of negotiations over a contract for work for an architectural and urban planning study, had failed to establish the relevant licensing provisions, and in particular provisions concerning the client’s right to modify the said study.
Recently, the Supreme Court dealt with a situation in which the contracting parties, in the context of negotiating a contract for work for an architectural and urban planning study, had failed to include appropriate licensing conditions, and in particular provisions concerning the client’s right to modify the study, to subsequently use it in modified form, to make copies and to further use it within the execution of the project which the study proposed in its own context – which is to say, all those rights which, by the nature of things, the client commissioning such a study usually intends to carry out, whether in order to make a model of the building, to procure the design and implementation documents, or to use it as part of the basis for subsequent administrative proceedings.
These situations are in their most basic form addressed by the provisions of Section 61 of the Copyright Act, which states that if a (copyrighted) work is created by the author under a contract for work, the author, unless otherwise agreed between the parties, is deemed to have granted license for the purposes arising from the contract. The client is only entitled to use the work beyond such purposes on the basis of a license agreement, unless the Copyright Act stipulates the contrary in the particular case.
Legal practice has been largely uniform in its interpretation of this provision as one of the forms of a statutory license, in which the license is established, made conditional, and limited by the purpose of the (main) contract. This purpose (i.e., in particular, the commercial purpose), regardless of whether explicitly agreed upon in the contract for work or whether implied, is the determining criterion for any licensing rights which the client has or may have.
In the case of works from the field of building architecture, it is assumed that the commercial purpose of the work which originally manifests itself in the form of an architectural study is the subsequent construction of the building for the needs of the client. Therefore, the statutory license in question also includes the authorization to reproduce the author’s work not only through its physical construction, but also in all other ways that are common for the construction of a building, given its nature. The license also includes the right to grant sublicenses within the corresponding range. All of the above, however, is on the condition that the client does not use the work in a way which diminishes the value of the original work within the meaning of Section 11 (3) of the Copyright Act. In this respect, legal scholarship has inferred that it is of no concern whether the author, when agreeing on the price for the creation of the original work (alone) anticipated, with no backing in the law, additional profit as a result of concluding (another) contract for work for the creation of a general (i.e. non-copyrighted) work in the form of the design documentation, other preparatory reproductions of his architectural work or perhaps even for the construction of the building itself.
In considering the above-mentioned situation, the Supreme Court largely confirmed and accepted this concept.
According to the interpretation of the Supreme Court, in the event that the parties do not conclude a separate license agreement regarding the contract for work, Section 61(1) of the Copyright Act establishes a statutory presumption that the author has granted license to the client for the purpose of the contract for work. In other words, the contracting parties have thus also entered into a license agreement between them (in addition to the contract for work) whereby the author, as the contractor, grants the client, as the purchaser, a non-exclusive license for such uses and to such extent as is necessary to achieve the purpose arising from the contract, for work, for consideration (which is deemed already included in the price for the work).
In the case of litigation, particularly in copyright protection proceedings, this purpose will be assessed by the court on the basis of the particular circumstances of the case. The court will have to base its findings primarily on the content of the contract, using the standard rules of interpretation. As a general rule, the burden of pleading and the burden of proof will be on the party who benefits from the assertion of the contents of the contract’s purpose; generally, it will be the client, as the defendant, who will claim that its use of the work is in accordance with the statutory license.
On the other hand, however, the interests of the client will also need to be properly protected in cases where the purpose of the contract justifies the need to grant a sublicense to a third party, assign the original work or modify the original work. In this sense, the author himself will also be obliged to refrain from any action that could endanger or damage the client’s legitimate interests, which are based on the purpose of the contract for work.
In accordance with the above, the Supreme Court’s decision in question is merely a confirmation of the opinions which professional practice has previously expressed, and as such a welcome unification of the possible legal interpretations. At the same time, the decision is confirmation of the existence of a certain “safety net” for clients who forget to include key statements on the scope and content of the license to a copyrighted work in their contract for work. It should be noted, however, that determining the commercial (or other) purpose of the contract which may not be expressed in any way in the contract in question or in any accompanying documentation, can be a very challenging activity in evidentiary terms, and may make expert legal advice much more relevant than it was in drafting the original contract.
Czech Supreme Court judgment 27 Cdo 2857/2019 of 6 April 2021
Cf. for instance Telec, I., Tůma, P. “Autorský zákon, Komentář.” (The Copyright Act. A commentary.), 2nd ed. Prague: C. H. Beck, 2019, p. 1295.