COPYRIGHT – Validity of an “extensive” clause assigning intellectual property rights in an employment contract

Paris Court of Appeal, Division 5, Section 1, January 25^th, 2023, no. 19/15256 – A clause in an employment contract progressively assigning intellectual property rights relatied to creations progressively as they are completed does not constitute a global assignment of future works.

In 2015 and 2016, an employee acting as fashion designer, who had entered a “stylist-artistic director” employment contract with OLT SAS, delivered services for third-party companies under collaboration contracts (or “co-branding”).

She considered that she was owed additional compensation for her services and requested that her claim be fixed as OLT SAS’s liability for the compensation of her patrimonial intellectual property rights, since the company had been placed in insolvency proceedings.

Article 8 of the employment contract, entitled “Intellectual Property”, provided that: “Ms. [A] [H] assigns exclusively to the Employer all intellectual property rights (reproduction and representation rights, excluding adaptation rights) relating to the works created within the scope of the present contract, progressively as they are completed. The present assignment covers all works protected in any way whatsoever by the Intellectual Property Code created by Ms. [A] [H] under the present contract.”

The employee considered that the copyright assignment clause was null and void, as it consisted in a global assignment of future works, prohibited by article L.131-1 of the French Intellectual Property Code.

The Court first held that the employee’s involvement in the co-branding contracts was part of her employment relationship with OLT SAS, to which she had granted the exploitation rights on her creations.

In the present case, the clause assigning rights set out in the employment contract to the employer’s benefit covered the creations completed under the contract, progressively as they were delivered.

The Court considered that such clause was not null and void since it “does not cover all the works that are the object of the assignment; moreover, it does not relate to future works but to completed works, since the assignment only takes effect progressively as the works are completed”. The clause as it was drafted therefore sufficiently delimited the scope of the assignment.

The Court also dismissed the invalidity of the clause despite the lack of any distinction between the compensation granted for the services delivered and the assignment of copyright.

This decision appears to be in line with a recent ruling by the Montpellier Court of Appeal (Montpellier Court of Appeal, October 18^th, 2022, no. 20/04452), which held that the prohibition of global assignments of future works only applies to contracts covered by paragraph 1 of article L. 131-2 of the French Intellectual Property Code, i.e. performance, publishing and audiovisual production contracts.

Any confirmation by the French Supreme Court of this restrictive interpretation of article L. 131-1 of the French Intellectual Property Code shall be followed with interest.