Whose copyright? – Friction between employees, freelancers and publishers
(IPRinfo 2/2010)
Marja-Leena Mansala
Should the Finnish copyright law contain a general clause about copyright in employment? This debate has been going on for decades in Finland.
In Finland, copyright is attributed to the author regardless of the conditions in which the work was created. Works created during employment are no exception.
If the purpose of the employment is to create works (write articles, take photos etc), some rights can, evidently, be exploited by the employer. It is generally agreed that the rights employers need to be able to use the work for the purpose for which it was created are transferred to them even if there is no written contract.
The Copyright Act does not contain a general clause concerning the transfer of rights of works created during employment. However, there is a specific clause about software and databases created during employment: in these cases copyright is transferred to the employer.
The collective labour agreement (TES) for the media industry contains clauses about copyright. The transfer of copyright is, however, an issue which should be addressed in individual labour contracts between the employer and the employee.
In most fields/companies the transfer of rights is not included in employment contracts. Especially in fields/companies which do not directly deal with copyright this is neglected. This creates uncertainty about the ownership of the copyright.
Discussion has been going on for decades
The debate on whether the Copyright Act should contain a general clause about copyright in employment has been going on for decades. In its report 1987, the Finnish Copyright Committee came to the conclusion that a general clause was not necessary.
However, Jukka Liedes, who was in those days in charge of copyright issues in the Ministry of Education, included his dissenting opinion. He stated that a general clause was needed, but it should not be binding but the parties should be free to agree on the transfer.
Protection of software was added to the Copyright Act in 1991. Simultaneously, a clause stating that the copyright to software created during employment belonged to the employer was included in the legislation. There was hardly any discussion on the issue, though. When the database directive (96/6/EC) was implemented into the Copyright Act, the clause concerning the employer’s copyright was expanded to databases.
After the 1987 report, the question about employers’ copyright was often briefly mentioned when the Copyright Act was revised. In the preparatory work for a law bill, it was only stated that the circumstances had not changed and thus a general clause was not necessary.
Parties’ viewpoints do not meet
In 2002, the Ministry of Education had a new study made in connection to the extensive changes to the Copyright Act based on the Infosoc directive (2001/29/EC). The study included a comprehensive inquiry on the need for legislation concerning employer’s copyright. According to the concluding report, the circumstances had changed considerably, but that the inquiry did not support the adding of a general clause on employer’s copyright into the Copyright Act.
Again in 2008 the Ministry of Education made a study on the same issue. Now the outcome was different: the report suggested that the employers should have sufficient rights to a work created during the employment to enable them to utilize the results in conducting their business. The clause would not be binding but left a possibility to agree otherwise.
The public consultation on the report brought numerous opinions from individuals and entities. The feedback was polarised: employees were against it whereas employers greeted it with pleasure.
The next time the issue was brought up in connection with the National IPR Strategy, launched in March 2009. The introduction of employers’ right to works created during the employment was among the criteria for measuring whether the objectives of the strategy were met.
A working group was given the task to add such a provision to the Copyright Act. The group suggested that the employer should have a parallel right to works created during employment. Also, the provision was suggested to apply to performing artists.
The IPR-strategy had been approved by the government. Still, the Minister of Culture decided to discontinue the preparations for adding the employers’ rights provision to the Copyright Act.
The Market Court estimated what is unreasonable
During the last 10 years the number of journalists who are employees has decreased about 10 per cent. This shows in the statistics concerning the members of the Union of Journalists in Finland (UJF), . Instead of using salaried journalists, more journalistic work has been outsourced to freelancers or small media companies.
While the latest debate about employers’ rights was going on, a big Finnish publishing company modified the standard form contract it uses with freelance journalists, freelance photographers, and other suppliers who produce articles, photos and drawings to the publisher.
One clause in the new contract states that the publisher with all the companies in the same industrial group have exclusive rights for the material produced by freelancers. These exclusive rights comprise all rights known and unknown, in all means of distribution, full rights to use the material in all units of the company group , all rights to sell the material, to modify it and to publish it in another form of expression. In case this material infringed a third party’s rights, the liability to pay compensation for damages and the court expenses remains on the orginal authors, i.e. freelancers.
The UJF regarded the conditions of the contract unreasonable. It filed a case against the publishing company in the Finnish Market Court in 2009, with the purpose of preventing the company from implementing these terms. The suit was based on a particular Act, which protects the weaker party in business contracts.
According to the Market Court, the assessment of what is meant by unreasonable in the legislation can be examined on two levels. Clauses can be unreasonable in individual contracts even if they are not unreasonable as such. In this case the Market Court concluded that these particular clauses were not unreasonable as such.
The Market Court dropped on 20 January 2010 the claims made by UJF. The Union will probably apply for a leave to appeal to the Supreme Court.
Would legislation balance the situation?
How does the outcome of this development affect copyright holders? If a copyright clause transferring the copyright to the employer had been included in the Copyright Act, it would have at least left the employee with a possibility to negotiate about the rights.
The negotiating strength of the employees as copyright holders is in any case better than that of freelancers because collective agreements are negotiated between labour market associations who represent the employees and the employers. The negotiating parties are thus equal.
In theory, freelancers have all copyrights to their works. In practice, they are often in a ”take it or leave it” situation. The terms in their contracts are largely dictated by the buyer, i.e. publishers.
After the decision of the Market Court, the question whether general clauses of freelance contracts are unreasonable or not has to be considered case by case. A single freelancer has poor chances in a court against even a small publisher. Paradoxically, the lack of a general clause in the Copyright Act concerning copyright in employment may indirectly contribute to the increase of outsourcing journalistic work.
According to the mentioned standard form contract, the publisher (or another commissioner) gets a much wider copyright than by the collective labour agreement.
Would it, after all, be better to have a general clause concerning employer’s copyright in the Copyright Act complemented by a possibility to agree otherwise? Is the situation between parties really so bad that it is impossible to rely on negotiations to give a result which would satisfy both parties?
