The issue of intellectual property, or IP, is an evergreen topic in the world of startups. Most startup founders believe that whatever they create belongs exclusively to them, but the question is somewhat more nuanced than that. Reading the concise provisions of intellectual property laws, it is not easy to read between the lines, so this article primarily aims to address copyright-related questions within intellectual property that may help bring the reader a little closer to the raw legal text from a practical perspective.
„Copyright belongs to the person who created the work (the author).”
This is the well-known sentence found in the Copyright Act. Once we read it, we can lean back with relief, put our feet up on the table and say: “Well, that was quick.” Fair enough, but let’s take it step by step: what is copyright, who is the author, and finally, what qualifies as a work?
Besides receiving the money, your name must also be indicated.
Within copyright, we distinguish between moral rights and economic rights. Moral rights include the right to make the work public, the right to be named, and the protection of the integrity of the work. The latter protects the work from distortion in a way that could harm the author’s honour or reputation.
A full list of economic rights would go beyond the scope of this article, but the main rights include, among others, the right to use the work and the right to authorise the use of the work. In the context of authorising use, the author may grant a licence for the work; for example, in the case of software, we may allow someone else to use it.
I wrote the program alone… well, Balázs only coded about 200 lines of it…
In practice, the authorisation of software use is carried out through licence agreements, which qualify as an independent contract type under the Copyright Act. However, before granting permission to use our application, it is worth carefully examining who contributed what, and to what extent, to its creation.
In practice, the authorisation of software use is carried out through licence agreements, which qualify as an independent contract type under the Copyright Act. However, before granting permission to use our application, it is worth carefully examining who contributed what, and to what extent, to its creation.
Collaborations have become essential for the creation of modern works, and if we stay with software — perhaps the most relevant example today — developing a complex, marketable application already requires highly coordinated teamwork. In the case of jointly developed software, copyright belongs to the co-authors jointly, and in case of doubt, in equal proportions… and when may doubt arise? For example, if we cannot determine the extent to which Dani and Balázs contributed with their work to the creation of the app they developed. In such cases, the law chooses the most obvious solution by dividing the entitlement equally among the authors.
However, we enter uncertain territory if we create a work within the framework of employment, since special rules apply to such cases, especially in relation to software. In the case of software created in an employment relationship, the economic rights are generally acquired by the employer, but many factors may play a role when determining exactly who is entitled to the rights related to the work. For example, we must examine how closely the creation is connected to the employment relationship. What happens if the employee creates a work as a result of an employer’s instruction? These are questions that arise every day in practice, but no general answer can be given to them, since all circumstances must be taken into account when deciding them.
Does it qualify as a copyrighted work if I take a photo of my pizza in a restaurant with my phone?
Copyright protection applies to the photo you take of your four-cheese pizza from the moment it is created, provided that it has an individual and original character, regardless of artistic value or quality. However, individuality and originality are key issues, so it is important that the image reflect individual expression and not merely be a simple copy. Works are protected by copyright from the moment of their creation, meaning that no authority or body needs to register them.
The law defines certain exceptions that cannot qualify as copyrighted works. If, during a sleepless night, we wake up suddenly and a world-changing idea pops into our head, we should be careful who we tell first, because an idea, concept, method of operation or mathematical operation cannot be subject to copyright protection. The law treats these “solutions” within the scope of trade secrets, whose protection system is much looser compared to copyright.
85 seconds for 100,000 dollars
In most areas of life, where a lot can be earned, just as much can also be lost. Copyright is no different, so it is worth acting carefully when copyrighted works are involved. In Hungary, perhaps one of the most famous copyright infringements was when Kanye West incorporated one of Omega’s most famous songs, Gyöngyhajú lány, into one of his tracks. Kanye allegedly did not have permission for the use, so he reportedly paid 100,000 dollars to the rights holders for the roughly 85-second excerpt under an out-of-court settlement.
The field of copyright is certainly not simple, and rights may easily be infringed even through seemingly harmless use or adaptation. Therefore, in copyright matters, it is recommended to seek the opinion of a lawyer experienced in the field of IP.