Netherlands: The Importance Of Copyright For Businesses

Last Updated: 22 September 2011
Article by Philippe Péters and Patrice Vanderbeeken

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Although it tends to be overlooked, copyright is a potentially economically valuable intellectual property right for all types of businesses, be they modern or more traditional.

What does copyright protect?

Copyright confers automatic protection on an original literary or artistic work that takes a certain form:

"literary and artistic works"
The term "literary and artistic works" is interpreted broadly to include, for example, manuscripts, photographs, architectural plans, software codes, furniture, designs, packaging and shapes of products (not only products that represent a certain design but also technically oriented products), meeting reports, advertisements, etc.
"original"
A work that bears the stamp of its author's personality will be considered original, without any particular artistic or aesthetic characteristics being required. As far as architectural plans are concerned, for example, such plans will be considered an original work if they result from an intellectual effort by the author and are not dictated solely by a technical requirement that would have led to the same result regardless of the architect's identity. This "personal stamp" requirement presupposes that the primary source of the work is not a prior creation but rather the author's own independent conception.
"that takes a certain form"
This requirement implies that a mere idea cannot be protected by copyright. A concept for a computer program, for example, will not qualify for protection until it has been set down in lines of code.

Who benefits from the protection?

As a general rule, copyright benefits the author of the work, namely the natural person that created the work. Business leaders should thus ensure that the company's employment contracts and service agreements contain an IP clause, providing for the assignment to the company of all copyright in created works, in the broadest sense possible. In this regard, the law sets forth precise rules which must be respected. It should be noted that there is a significant exception for computer programs. Indeed, in the absence of a provision to the contrary, copyright and all other "economic rights relating to computer programs created by one or more employees or agents in the performance of their duties or further to the employer's instructions" are deemed assigned to the employer.

What are the advantages of copyright over other intellectual property rights?

This question is important because, in certain cases, a creation can be protected by different types of rights. Thus, for example, software is covered by copyright but can also benefit from patent protection, provided notably that the application of the software has a technical effect. The same holds true for slogans, logos or product packaging which qualify for copyright protection but can also benefit from trademark protection if they fulfil certain conditions.

One important advantage of copyright protection is that it is automatic. Thus, no investment is required to obtain or maintain it. Moreover, thanks to the effect of various international conventions, such as the Berne Convention which has been signed by one hundred sixty-four countries, copyright protection extends to much of the world. Conversely, both patents and trademarks require the filing of an application with the competent national or international registration organisations. Such filings, which are generally handled by patent or trademark agents, can be quite costly if protection is sought in numerous countries.

Another advantage of copyright protection is its duration: seventy years from the author's death.

Finally, it is important to keep in mind that, given the absence of a register of all copyright-protected works, it is not possible to verify in advance if a work is protected or not. The best way of avoiding the risk of reproducing a protected work is not to copy original works.

What precautions should be taken to protect copyright?

Firstly, it is advisable to arrange for proof of the date of creation of works. Indeed, this will allow you, if necessary, to object to a later creation that appears to be based on your earlier work. Such proof can, for example, be obtained by filing a copy of the work with a notary.

Furthermore, copyright requires the proper management of contracts with the legal entities (for example, sub-contractors) and natural persons at the origin of the protected creations. In particular, it is important to include in your contracts clauses providing for the assignment of IP rights. In this regard, it is important to distinguish several scenarios. The law provides more flexible rules for works created by employees or in the performance of a work for hire, provided the person that placed the order is engaged in a non-cultural activity or advertising. The contract must also contain sufficient guarantees, notably with regard to the fact that the assigned or licensed works do not infringe third-party rights.

If a third party is authorised to use or reproduce protected works (for example, a manufacturer to whom the author grants the right to produce and sell design products), it is advisable to sign a license agreement in due form. As with the licensing of a patent or trademark, this precaution is necessary in order to ensure adequate protection of the granted rights. The contract should cover the following points in particular:

  • Scope of use: In which countries and manner and on which media can the rights be exercised?
  • Duration of use: Is the license granted for a fixed term, an indefinite duration or the duration of the copyrights? Can the license be terminated if, for example, certain conditions are not fulfilled?
  • Can the right of use be assigned or sub-licensed to a third party?
  • What happens to potential adaptations?
  • Does the right holder have a right to verify exercise of the rights?
  • Which courts have jurisdiction in the event of a dispute?
  • What is the means of remuneration (lump-sum, based on turnover, per unit, etc.)?
  • Rules governing the termination of the contract: return of models, liquidation of stock;
  • Etc.

As you will have noted, copyright has its advantages but necessitates good management, in particular of contracts, both downstream and upstream.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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