According to the Law on Copyright and Related Rights, a copyright contract is defined as a contractual relationship by which copyright is assigned or fully transferred. The subsidiary application of the Law on Obligations is determined.

The Law on Copyright and Related Rights prescribes the mandatory elements that this contract must contain in order to be legally valid.

Mandatory written form of the contract 

This contract requires a mandatory written form, unless the Law on Copyright and Related Rights stipulates otherwise.

This raises the question of whether an orally concluded copyright contract can produce legal effects at all?

The answer is provided in the excerpt from the judgment of the Supreme Court of Serbia Rev. 11941/04 – namely, an orally concluded copyright contract produces legal effects if its content and the rights and obligations arising from it are proven. In that case, the provisions of the Law on Obligations relating to a contract for work apply.

A similar view is found in the decision of the Supreme Court of Serbia Gž 12/2003 – although the parties in the dispute did not have a copyright contract which, according to the relevant article of the then applicable Copyright Law, had to be concluded in written form, the legal relationship may be governed by the provisions of the Law on Obligations, both general provisions on contracts and specific provisions relating to a contract for work.

Another interesting case – in the decision of the Supreme Court of Serbia Gž 08/02, it was concluded that a copyright contract concluded on the publisher’s memorandum, signed by the author, produces legal effect if the contractual parties have fulfilled in whole or in substantial part the obligations arising from that contract. The court confirmed that copyright contracts are concluded in written form but referred to the provisions of the Law on Obligations. In accordance with Article 73 of the Law on Obligations, a contract for which written form is required is considered valid even if not concluded in that form, if the parties have fulfilled in whole or in substantial part the obligations arising from it (unless the purpose for which the form was prescribed clearly implies otherwise).

Nevertheless, we consider that the safest option is to respect the provisions of the Law on Copyright and Related Rights and consult a law firm specialized in contract law and intellectual property matters.

A few facts about the assignment of intellectual property rights 

The Law on Copyright and Related Rights stipulates that, in case of doubt regarding the content and scope of rights assigned/transferred by a copyright contract, there is a presumption that fewer rights have been assigned/transferred.

Furthermore, permission to publish a copyrighted work, to record the work on a sound or image carrier, as well as permission to broadcast the work, must be explicitly agreed upon.

Under this law, the mere assignment/transfer of a specific right to exploit a copyrighted work does not imply the assignment/transfer of the right to copyright remuneration, if the exploitation of the copyrighted work is based on statutory licensing.

It is also important to note that the assignment/transfer of a specific right to exploit a copyrighted work includes granting permission for modifications to the work that are technically necessary or customary for that method of exploitation.

What does our case law say? 

In the judgment of the Appellate Court in Belgrade Gž4 87/2016, it was determined that in contracts for the assignment of economic copyright, it is necessary to explicitly state whether the assignment is exclusive or non-exclusive. In case of dispute, if this issue is not regulated by the contract, it is considered to be a non-exclusive assignment of economic rights.

In the judgment of the Supreme Court of Cassation Rev 498/2020, it was confirmed that if a person publicly communicates a copyrighted work (in this case, photographs) of the author without paying remuneration and contrary to the agreed terms of use, the author is unlawfully deprived of exercising exclusive economic rights and suffers financial damage. The author enjoys moral and economic rights in relation to their copyrighted work from the moment of its creation. The author’s moral rights include, among other things, the right to be identified by name, pseudonym, or symbol on copies of the work. The author also has the right to economically exploit the work, and for each exploitation of the work, the author is entitled to remuneration, unless otherwise provided by law or contract. Unlike economic copyright, the author’s moral rights cannot be transferred by contract.

In the same case, the Supreme Court of Cassation determined that if the author verbally allowed the publication of photographs as copyrighted works in newspapers, this does not necessarily apply only to public communication through print media, but also includes public communication via the internet. If the author’s consent for publication and the conditions under which the work may be published were not given in an explicit and unequivocal manner, it should be interpreted that fewer rights were assigned, and the author should be granted protection as the weaker negotiating or contractual party.

In the decision of the Constitutional Court Už 5709/2014, it was concluded that when technical improvement is used without a contract and without remuneration to the author, it constitutes a claim for damages, and the relevant moment for the start of the statute of limitations is the author’s awareness of the damage suffered, which occurred from the moment production began using that technical improvement by the infringer

What does the Law on Copyright and Related Rights prescribe in the case of profit that is clearly disproportionate to the agreed remuneration?

Article 70 of the Law states that if the use of a copyrighted work results in profit that is clearly disproportionate to the agreed copyright remuneration, the author or their heir has the right to request a modification of the copyright contract to eliminate that disproportion.

The same right exists if no remuneration was agreed upon, and the income generated from the use of the copyrighted work exceeds the costs of its use to an extent that allows for the payment of copyright remuneration.

It is important to note that this right expires within two years from the day the author or heir becomes aware of the disproportion or the income generated from the use of the work, and no later than six years from the end of the year in which the disproportion occurred or the income was generated. Therefore, there are two-time limits – a subjective one of 2 years and an objective one of 6 years.

The author or heir cannot waive this right in advance, which means that any contractual clause attempting to do so would be null and void.

The user of the copyrighted work is obliged to provide the author or heir with credible data on the economic effects of the use of the work within one month from the day the request is submitted.

How do we define clear disproportion? 

Article 139 of the Law on Obligations prescribes that if there was a clear disproportion between the obligations of the contracting parties in a bilateral contract at the time of its conclusion, the disadvantaged party may request the annulment of the contract if they did not know or could not have known the true value.

Although the Law on Obligations prescribes a shorter time limit in this case, the Law on Copyright and Related Rights is considered lex specialis, and therefore only the time limit provided by that law applies.

When can the author revoke the granted economic right or withdraw permission? 

There are two situations in which this can occur.

The author or heir may revoke permission or withdraw the granted economic right if the acquirer does not exercise the right they obtained or exercises it to a lesser extent than agreed, thereby jeopardizing the interests of the author or heir (unless the author or heir is responsible for the situation).

This right cannot be exercised before the expiration of 2 years from the conclusion of the copyright contract or the delivery of the copy of the work to the acquirer, if the delivery occurred after the contract was concluded. The time limit is 6 months if it concerns a contribution (e.g., article or illustration).

There is one obligation here – before the author or heir revokes permission or withdraws the right, they must notify the acquirer and give them a reasonable period to begin exercising the right they obtained.

This right also cannot be waived in advance.

Secondly, permission may be revoked or the granted economic right withdrawn if the author believes that the exploitation of the work could harm their creative or personal reputation. This can be done if there are reasons that arose after the conclusion of the copyright contract, for which the acquirer is not responsible.

In this case, the author is obliged to compensate the acquirer for the actual damage incurred, and the statement of revocation of permission or right takes effect from the day the author provides security for the compensation.

The acquirer is obliged, upon the author’s request, to disclose the amount of costs incurred in connection with the preparation for the exploitation of the copyrighted work within 90 days from receiving the statement of revocation.

This right also cannot be waived in advance.

Note: This text reflects the personal opinion of the author and does not constitute legal advice.