In a decision extending the French courts’ previous case law protecting authors’ rights, the Paris Court of Appeal has held, in a case concerning computer software, that any assignment of copyright is subject to the condition that the scope and terms of the assignment are clearly detailed in an assignment agreement. Assignees of copyright cannot simply rely on the author to inform it of such terms.
In a decision dated 13 December 2006, in contradiction of its own decision of December 2005, the Paris Court of Appeal held that any assignment of copyright is subject to the requirements of Article L.131-3 of the Intellectual Property Code. This states that:
“Assignments of copyright are subject to the condition that each of the rights transferred is clearly detailed in the assignment contract and that the scope for exploiting the assigned rights is determined in terms of its extent, destination and duration”.
In its previous decision of 16 December 2005, which was confirmed by the First Chamber of the Cour de Cassation, the court had interpreted Article L.131-3 in a restrictive manner, holding that it applied only to contracts of audiovisual performance, publication and production – these being the types of contract expressly identified in Article L.131-2. However, the court treated this as an exceptional case and returned to previous case law providing greater protection to copyright authors.
During 2001, Union Technique de l’Automobile du Motocycle et du Cycle (UTAC) engaged ASLY for research work and the development of computer applications. This work was carried out by Mr Pascal Dadone, an employee of ASLY, between October 2001 and January 2002. On 15 March 2002, UTAC decided to contract directly with Mr Pascal Dadone and entered into a contract for computer services with him. This contract terminated on 30 June 2003.
In performing the services, Mr Dadone, on his own initiative, included a computer program, called Framework, which he had created independently back in 1999. UTAC continued to use the Framework software after its contract with Mr Dadone expired and, in 2004, Mr Dadone sued UTAC for copyright infringement on the basis of unauthorised use of the computer program.
In a decision dated 22 September 2005, the Tribunal de Grande Instance of Evry held UTAC liable for copyright infringement.
Before the Court of Appeal, UTAC argued that it was authorised to use the Framework software and therefore not liable for copyright infringement. It claimed that payments made to Mr Dadone and emails exchanged between the parties regarding the upgrading of the Framework program were sufficient evidence of this authorisation to use. Furthermore, UTAC argued that the services provided by Mr Dadone under the agreement of March 2002 depended upon use of the Framework software.
In finding against UTAC, the court held that the amounts paid to Mr Dadone corresponded to the services under the contract of March 2002, which could not have included the development of the Framework program three years earlier in 1999.
With regard to the emails exchanged between UTAC and Mr Dadone concerning “the evolution and updating of Framework” which, according to UTAC, evidenced the authorisation to use the "Framework" program, the court held that the provisions of Article L.131-3 of the Intellectual Property Code had not been complied with as the correspondence was not sufficient to precisely define the scope of the rights assigned, notably in respect of their duration and territorial scope.
The fact that the services provided by Mr Dadone under the contract of March 2002 could not be used without the “Framework” program was also rejected by the court as an argument that use of the software by UTAC had been authorised. This was not sufficient to affect the validity of the assignment under the Intellectual Property Code.
Finally, UTAC attempted to argue that Mr Dadone was liable for failure to provide advice under his agreement with UTAC by offering UTAC the use of the Framework program without informing it of the conditions of such use. On this point, the Tribunal de Grande Instance had held in favour of UTAC but the Court of Appeal set aside that decision on the basis of, amongst a number of factors, UTAC’s professional deficiency. The Court of Appeal considered that as the recipient of computer services, UTAC should have made the effort to inform itself of the conditions of use of the Framework software and also noted that UTAC did not respond to the formal notice sent by Mr Dadone two months after the end of his contract with UTAC, in which he reiterated the conditions of use of the software.
This decision appears severe for the company held to have infringed the copyright in the program, where the program in question was made available by its developer. Moreover, this decision retreats from a previous decision of 16 February 2005, where the Court of Appeal had held that "the assignment of copyright does not require any specific formalities". This case makes it clear that the requirements of Article L.131-3 of the Intellectual Property Code will apply to all assignments of copyright and parties must state clearly the terms and scope of the assignment – particularly in relation to duration and territorial limitations.
The Court of Appeal also punished UTAC’s inactivity, recalling the principle that a service provider does not owe an obligation of disclosure towards professional clients. This emphasises that it may be up to customers to request contracts which comply with the formality requirements of the Intellectual Property Code.