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LAW ON COPYRIGHT AND RELATED RIGHTS – AMMENDMENTS TO THE CONTRACTUAL REMUNERATION AND COPYRIGHT WORK CREATED DURING EMPLOYMENT

By Jelena Bajin, Lawyer

Law office of Tomislav Šunjka

jelena.bajin@sunjkalawoffice.com

The copyrights and rights related to copyrights in the Republic of Serbia is regulated with the Law on Copyright and Related Rights (“the Law”), which was firstly introduced in 2009, and later amended on two occasions, on 2011, and 2012.

The Law aims to regulate the rights of authors of literary, scientific, professional and artistic works, right of performers, right of the first publisher of a free work, rights of producers of phonograms, videograms, broadcasts and databases, and the right of publishers of printed editions as rights related to copyright, and the manner of copyright and related rights and the judicial protection of those rights. 

However, since the Law was introduced, a few problems emerged, mostly in the scope of application of few, although very important, provisions.

The article 70 of the Law prescribes that if the use of the copyright work generates profit which is evidently disproportionate to the contractual remuneration, the author or his successor shall have the right to request amendment of copyright contract in order to eliminate this disproportion. This right of the author and his successors is limited on a period of two years from the date of awareness of the existence of disproportion, or profit made by the use of copyright works, and not later than six years after the end of the year in which the disproportion occurred, or when the revenue was generated.

There are few problems that occur when viewing this provision from the point of view of the author (and his successors), and from the point of view of the later beneficiary of the particular copyrights.

Firstly, the author has to prove that profit generated from the use of his copyright work. This could appear easy with some particular copyright works, for example, a novel. When author firstly offers his novel to the publisher, especially when the author is someone who is not a well-known character in literary circles, the publisher would be able to buy copyrights for the amount of money that is fairly small in comparison to the quality of the novel. However, if the novel becomes hugely popular, it is fairly justifiable that the author demands amendment of the contractual remuneration, in order to eliminate the disproportion.

In said example, the situation is clear. The publisher generated disproportionate profit by the use of the copyright work of the author (the novel), which can be easily proven, and thus the author has the right to demand the amendment of the contract.

However, what would be the authors’ position if the situation is not as clear as in previous example?

Let’s take a logo as an example.  A logo meets the conditions for being a copyright work prescribed by the Law, it was made by the author and the author invested his skill and imagination in it. The problem emerges in trying to prove that the later beneficiary of the copyright work (logo) generated disproportionate profit from the use of the copyright work (logo). The author of the logo may have much with the success in making of a particular brand, since the logo is what makes the brand recognizable, but in what manner and with which evidence would this be proven? Furthermore, is amendment of the contractual remuneration justifiable and fair to the later beneficiary of the copyright work (logo), who may invested much in advertising, quality of the particular product and/or service, and thus generated profit?

Then there is the question of the limitation of time in which the author or his successors can request the amendment of the contractual remuneration. Since the limitation is defined by a time frame starting from two years from the date of awareness of the existence of disproportion, or profit made by the use of copyright works, and not later than six years after the end of the year in which the disproportion occurred, this limitation in practice potentially can be extended indefinitely. What is the actual date of awareness of disproportion? The date that the author found out that the beneficiary of the copyright generated profit that is double or triple of the contractual remuneration paid to the author for the copyright work? The date that the author found out that the beneficiary of the copyright generated one million dollars? As it can be seen, there is a very important part of this provision that is not defined enough – what is to be considered a disproportion? The consequence of this, and a very grave one, is that it can produce a fair amount of legal uncertainty for the beneficiary of the copyright, that even though he paid for the copyright, can be open for the request of the author of the copyright work to amend the contractual remuneration, or even to a potential lawsuit, and that for an indefinite period of time.

Furthermore, there is the question of copyright work made by an author as an employee in the performance of his duties. In this event, as prescribed by the Law, the employer is entitled to publish the work, and is a beneficiary of the exclusive property rights on its exploitation within five years from the completion of the work. After said five years, the exclusive property rights are given back to the author – natural person, who actually created the copyright work. Again, it comes to a gap between copyright work that is strictly commercial and those that are more artistic, like in the aforementioned example of a novel and a logo.  

Let us suppose that a certain company wants to develop a brand of clothes and it hires a marketing agency to help in developing the brand. The agency provides the company with a logo and a marketing campaign, which the company pays for in accordance with the contract with the Agency.  After 5 years, the logo becomes the property of the author – natural person, in accordance with the Law, however it was already sold to the beneficiary by the marketing agency which employed the author.

What is the position of the beneficiary of the copyright work – the company that hired the marketing agency for developing the brand? In theory, the author could start selling shoes by the same logo, as the beneficiary sells clothes, thus using all the hard work, marketing and product quality that beneficiary invested in his brand. Did the marketing agency – authors employer have the right to sell the copyrights to the beneficiary, and, at the end of the day, why would a company that paid for something, in accordance with the contract, even have to consider whether the marketing agency had that right. Furthermore, if the author should request the amendment of the contractual remuneration, who would he address this request to, his employer-the marketing agency, or the later beneficiary of the copyright work? Once more, we come to realization of legal uncertainty, which is unacceptable in a business environment.

The Law on Copyright and Related Rights does not give answers to these questions. It is safe to say that the lawmaker intended for the court practice to define some of these questions, during the years of application of the Law in particular disputes concerning copyrights.

However, even though the Law came into force almost 4 years ago, the court practice is scarce, probably mostly due unawareness to the authors of their rights prescribed by the Law, and general low level of copyrights development.

Nevertheless, the Law on Copyright and Related Rights is a step in the right direction in connection to defining and protection of copyright and related rights. It only has to be additionally defined by the practice before the courts, other competent authorities and by the authors and beneficiaries of the copyrights themselves, in order to make it more applicable in practical situations.