The General Assembly of the Civil Court of Cassation (GACoC) made important determinations with its decision dated 16.01.2020 and numbered E. 2019 / 11-474, K. 2020/26, concerning the scope of the ordering party’s use of the work created within on-demand work agreements, and whether a separate contract is required for the transfer of the economic rights of the author in terms of related uses.
In this case, the plaintiff was working as the purchasing manager in the defendant companies (ordering parties) and created a computer program upon the order of these companies. Since the plaintiff alleged that he did not receive payment in return for the computer program and there was no contract regarding the transfer of his economic rights, the plaintiff requested the cessation of the infringing use, and to be compensated due to the violation of his economic rights arising from the authorship. On the other hand, the defendants claimed that the use was based on permission, and that the program was created using the company's database during working hours; thus, it was a work created within the scope of the employment contract, and they filed a counter action.
After a long trial period, the case was brought before the GACoC, and the subject matter dispute was determined as mainly whether the legal relationship between the parties in the actual case could be evaluated within the scope of the "on-demand work agreement," according to the Turkish Code of Obligations (TCoO), whether the use of the work by the ordering party constituted infringement of the economic rights of the author, and whether a separate contract is required for the transfer of these rights.
In the decision, on-demand work agreements are defined as the type of agreements in which one or more persons undertake to create an idea and work of art in line with the plan and instructions given by the ordering party, and it has been underlined that these agreements are considered as work agreements pursuant to Article 470 of the Turkish Code of Obligations (TCO). The defining element of these agreements is that the subject, content, form, and even the material to be used, is determined by the ordering party, and the other party makes a commitment to create the work for a fee. However, here the work is not created by a person working in the workplace of the employer, under orders and instructions; namely, not by a person who works in a close relationship with the ordering party; on the contrary, the work is created independently and, thus, differentiates from the works created by the employees.
In the subject matter decision, the relationship between the parties was defined as an on-demand work agreement considering that the computer program in question was created and delivered upon the order of the defendants and in line with the needs of the defendants and, within this context, it has been evaluated whether the use by the defendants has violated the economic rights of the plaintiff or not.
The GACoC assessed that the defendants were the proprietor of the computer program, they had the right to use the computer program within the scope of the agreement, and the economic rights and the right to use the non-monetary rights arising from the authorship on the computer program were not transferred to the defendants, separately, and remained with the plaintiff. It has been evaluated that the use by the defendants is in accordance with the on-demand work agreement between the parties, and it has not been proved that they used the program in a way that would infringe the economic rights of the plaintiff. According to the GACoC, in such a case, the plaintiff can only claim the fee for the work under the agreement, and the rights granted to the owner of the work in violation of the economic rights will not be applied here, as if there is use without an agreement between the parties.
In our opinion, this decision is important as it emphasizes that the ordering party has the right to use the work within the scope of the on-demand work agreement, and that there is no need to make a separate transfer/license agreement for this use under the Law on Intellectual and Artistic Works (LIAW). According to such agreements, the creator of the work may only request payment of the fee under the agreement, and cannot claim infringement in case such use of the other party falls under the agreement. However, if the relevant work is intended to be used in a different manner other than the one agreed to in the on-demand work agreement, a written right transfer agreement must also be made under the LIAW by specifying the format and media of the relevant use.