If the approach to French author’s rights has been “individualist”, historically, attached to the author as a physical person, in practice, it can be relatively complicated for the employee creations regime to respect that.
Effectively, several of the French Intellectual Property Code provisions oppose the validity of a clause inserted into an employment contract that stipulates that the author’s rights on an employee’s creations are automatically assigned to his employer.
This is relative in particular to the following articles:
– Article L111-1, which stipulates that the author enjoys the rights attached to his work ‘on the mere basis of its creation‘ and also stipulates that the existence of a ‘leasing or service‘ contract does not constitute a dispensation of this enjoyment;
– Article L131-1, which prohibits any global assignment of future works;
– Article L131-3, which subordinates any assignment of author’s rights to the condition that each of the rights assigned is the object of a separate mention in the assignment deed, in the same way as the limitation of scope, target, geographical range and duration;
– Article L131-4, which stipulates that, in exchange for the assignation of the rights, in principle, the author must benefit from a contribution that is proportionate to the operation revenues; a compensation that, in some cases, may be assessed as a flat fee.
The use of contracts has of course been adapted in order to safeguard the serene and peaceful operation of works produced by legal persons and manufactured by their employees.
Thus, mostly, a relatively wide-ranging rights assignment clause is included in employment contracts, providing for the employee and the employer to come together, as progress is made on the production of the works under the employment contract, in order to formalise the assignment of the rights.
During the fulfilment of the employment contract, if necessary, the employee and employer regularly establish written rights assignments agreements, which provide for additional remuneration specific to each of the rights assignments.
However, recent jurisprudence tends towards increased flexibility of this relatively strict regime, as can be seen from the Paris Cour d’Appel‘s judgement of 25 January 2023 (RG n°19/15256), which ruled that:
– An author’s rights assignment clause specifically provided for in an employment contract is not void under Article L. 131-1 of the French Intellectual Property Code when it limits the scope of the assignment to determinable and separable works, i.e. those produced by the employee within the framework of the employment contract and as and when such works are produced.
– A flat fee that doesn’t differentiate between the remuneration for the work carried out under the employment contract and the compensation for the assignment of author’s rights is lawful.
In the case in question, the employee had signed with her employer a permanent employment contract that contained a clause providing for assignment to the employer “of all intellectual property rights (…) relative to creations produced within the framework of the present contract, as and when they are produced“, without providing for any compensation other than the salary.
Considering that the exploitation of the works by third-party companies, under licence from her employer, justified a complementary remuneration (according to the aforementioned Article L131-4), the employee took her employer to the Paris Tribunal Judicaire, and claimed, in particular, that her creations had not been legally assigned to her employer.
In its ruling of 5 July 2019, the Tribunal rejected the totality of her claims. The Paris Cour d’Appel confirmed this by rejecting her challenge of assignment validity based on the purported non-respect of the provisions of Article L. 131-1 of the French Intellectual Property Code and on the absence of compensation for the assignment that was distinct from the salary.
Indeed, the Court upheld that this clause “is not null and void as long as it limits the scope of the assignment to determinable and separable works, i.e. those produced by the employee within the framework of the employment contract and as and when such works are produced. Hence the assignment clause does not incur the grievance of the global assignment of future works as it does not apply globally to the works that are the object of the assignment; furthermore, it does not apply to future works but only to works that have been produced, as assignment takes place as and when the production takes place“.
Therefore, where the assignment clause stipulates that (i) it applies to works produced by the employee within the framework of the employment contract and that (ii) the assignment will only take place once the works have been produced, the clause, therefore, respects the prohibition established by Article L131-1 of the French Intellectual Property Code.
As regards the absence of additional remuneration, according to the ruling, the judges clearly considered it possible to take into account a flat fee included in the salary.
Indeed, although Article L131-4 provides for compensation for the assignment of rights, there is no law that dictates that the flat fee must be separate from the salary.
Nevertheless, this decision needs careful consideration. Indeed, the ruling insists on the re-evaluation of the salaried author’s remuneration received pursuant to an addendum to the employment contract, and the receipt by the author, in the form of dividends, of amounts received by his employer, which would seem – in this case – to demonstrate the parties’ agreement as to the financial compensation for the assignment of rights by the employee to his employer.
If the remuneration had been significantly lower, the solution provided by the ruling could perhaps have been different.
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