In the modern business world, information, innovation and creativity are the key assets of any successful entrepreneur. The competitive advantage of an entrepreneur often lies not in material assets, but in original ideas, know-how, software or design solutions, and it is therefore essential for entrepreneurs to be familiar with the mechanisms of intellectual property law that protect these solutions (as the results of human creativity). One of these mechanisms is the concept of an employee work (also known as work for hire).
Key intellectual property is often created by employees in the course of performing their work tasks for the employer. In practice, there are often misconceptions about who owns the rights to such works and to what extent. However, the common perception that all rights in intellectual property created by an employee automatically belong to the employer does not fully reflect the legal reality. The fact is that the author’s personal and property rights are non-transferable. The statutory regulation of an employee work grants the employer only the right to exercise the author’s property rights related to the work, which is not unlimited. In technological and creative industries in particular, where employees routinely create works with high added value, it is generally not desirable to rely solely on statutory regulation and it is advisable to have clearly established contractual relationships governing the terms of use of such works by the employer. Outdated, vague or completely missing contractual provisions can lead to legal uncertainty, disruption of business relations or even costly litigation.
In this article, we will focus on key aspects of the legal regulation of employee work, highlight practical problems that often arise in this area and offer recommendations on how to prevent risks through well-prepared contractual documentation.
What is an employee work?
The regulation of employee works can be found in Section 58 of Act No. 121/2000 Coll., Copyright Act (hereinafter as the “Copyright Act”). According to the wording of the Copyright Act, an employee work is any work[1] that is created within the scope of an employment or service relationship. In the context of employment relationships, works of authorship are often created in the course of the performance of work tasks by an employee, directly as part of or in connection with his or her job. Typical examples of employee works include marketing materials, photographs, articles, software, architectural designs and many others. The employer logically needs to be able to use such works effectively. The purpose of an employee work is therefore primarily that the property rights in the work are not exercised by the author but by his employer, thus enabling effective use of the work in practice. However, the relevant legislation is not unreservedly in favour of the employer and it is therefore essential to know its limits and the practicalities involved.
Exercise of the author’s property right means the right to use the work independently, to grant to third parties a license to use[2] the work (in particular, the right to reproduce the work, the right to display, lend, rent, or communicate the work to the public), including permission for the licensee to sublicense or assign the license, the right to receive royalties from the rights granted, and to protect these rights, for example, by enforcing claims of infringement through legal proceedings. The employer is entitled to exercise these rights but is not obliged to do so.[3] The exercise of these rights by the employer does not amount to a transfer (alienation) of the author’s property rights, as is often incorrectly stated, since these, like the author’s personal rights, are not transferable under copyright law and alienation is not permitted. The author therefore does not lose his/her property rights but cannot exercise them on his/ her own on the basis of the regulation of an employee’s work. However, unless the employee and the employer agree otherwise, on the death or dissolution of the employer without a legal successor, the exercise of the property rights reverts to the employee.[4] It is essential to mention that the regulation of employee’s work is a non-mandatory regulation, therefore the parties may contractually exclude or modify it according to their needs.
The Copyright Act itself provides for some limits on the exercise of the author’s property rights; for example, the first paragraph of Section 58 of the Copyright Act expressly provides that the employer may assign the right of performance under the first sentence to a third party only with the author’s consent, unless this is done in the case of a transfer of a business establishment. Such permission is deemed to be irrevocable and applies to all further assignments. The third party to whom the performance right has been assigned shall then be deemed to be the employer for the purposes of this Act. It is therefore advisable to bear this arrangement in mind, particularly for creative employees, when concluding the employment contract and to stipulate the assignability of the exercise of property rights with the employee in advance.
When is it really an employee work?
According to the Copyright Act, an employee work is a work created by the author to fulfil its obligations under the employment or service relationship.[5]
This is a non-mandatory regulation, which follows from the statutory wording “unless otherwise agreed”, i.e. the regulation of employee work as such only applies unless the employee and the employer (or the client and the contractor in the case of commissioned software) agree otherwise.
According to the legal definition of an employee work, it is decisive that it is exclusively a work created by the employee in the performance of specific work tasks. Thus, a general connection to the performance of the employment is not sufficient; the direct link to the tasks implied by the employment contract is decisive. It is irrelevant whether the work is created strictly during working hours; what matters is that it is created in the performance of specific work-related tasks. For example, if a teacher prepares teaching materials during a weekend, it will still be considered an employee work, because it is a work created to fulfil specific work tasks, albeit outside of working hours. Conversely, work that is not related to the employee’s job description is not considered an employee work. For example, if an IT support employee likes to paint pictures and the company would like to use one of them on its website, it would be necessary to enter into a licensing agreement – as painting does not fall within the scope of the employee’s work tasks, even if the painting was done during working hours.
The Copyright Act makes a distinction between works created within the employment (or service) relationship and outside of it. The key difference lies in the conditions under which the creation takes place. An employee in the position of author does not generally bear the costs associated with the creation process, which can be a significant financial burden for another author. The employee is provided with an equipped workplace, technology, materials or other tools. Often, the employee is also reimbursed for preparatory activities or even procedures that, although not leading to the creation of the final work, were part of the creative process.
In any case, it is essential that the type of work is properly defined in the employment contract and, if necessary, a separate document with a so-called job description is handed over to the employee, which sufficiently covers the specific creative activities of the employee as a potential author. These documents should take into account what kind of works of authorship the employee may normally produce. Beyond this, it is advisable, particularly for creative positions, to define intellectual property rights in employment contracts beyond the scope of the statutory regulation, so that there is no doubt or any other complicating future situation which could limit the employer’s future exercise of its property rights.
The Copyright Act also provides for the situation where an employee terminates employment during the creation of a work and the work remains unfinished. These situations are dealt with by a rebuttable legal presumption of the author’s consent to the completion of the work in progress by the employer.[6] This legal institute allows the employer to build on the existing creative activity and eventually complete the work without the participation of the original author – especially in cases where the employee terminates the employment relationship of its own free will, leaves for a competitor or retires, for example.
Employee work does not apply just to employees
Under the Copyright Act the employee work regime also applies to two special cases where no employees are involved, namely:
- in the case of a work created by a member of a statutory or other elected or appointed body of a legal person,[7] and
- in the case of computer programs and databases, as well as cartographic works that are not collective works, if they are created by the author on commission.[8]
Section 58(10) of the Copyright Act provides that the regulation of employee works shall also apply mutatis mutandis to works created by members of statutory or other elected or appointed bodies, if such works were created in the performance of duties arising from their relationship to a legal person. In such cases, the legal person shall be deemed to be the employer. It should be noted, however, that this regime does not apply, for example, to shareholders of a limited liability company who are not members of elected bodies. Therefore, if the shareholders create any copyright work for the company, it does not fall under the employee work regime and the situation must be regulated on a contractual basis.
For computer programs, databases and cartographic works that are not collective works, there is a legal fiction[9] that these works are considered to be employee works if they are created on commission (for example, under a contract for work). In such cases, the commissioning party is considered to be the employer. However, this regime only applies where the supplier (contractor) of these works is a natural person, i.e. the author of the work directly (for example, a computer program is ordered from a specific software specialist). Conversely, if the contractor is a legal person, the rule does not apply and the property rights in the work do not automatically pass to the client. In case of contracts where the contractor is a company, such as a software development company, it is therefore necessary to expressly cover the grant of a licence contractually to the extent necessary and not to rely on the legal transfer of rights.
Another interesting case may be a situation where the work is created under the so-called “schwarz-system” i.e. when a natural person performs dependent work but formally performs it on the basis of a trade licence (for example in order for the “employer” to save on taxes). In such a case, if it is in fact a dependent employment relationship, the work would be treated as an employee’s work, regardless of the form and name of the relevant contract.[10]
In the case of computer programs, databases and cartographic works, this situation is usually not a major problem, because the legal fiction of an employee work gives the client the same property rights as if he were an employer – even if the work was created under the so-called “schwarz-system”.
Additional remuneration for employee work
In the case of employee works, it is important not to forget the so-called author’s right to additional remuneration. The author of an employee work is entitled to reasonable additional remuneration if his or her salary or other agreed fee does not clearly correspond to the profit the employer has made from the commercialization of the work.[11] The statutory treatment of employee works is based on the legal presumption that the agreed wages (or other remuneration paid) also constitute reasonable royalties. However, this presumption does not apply if the remuneration would be manifestly disproportionate to the profit the employer has made from the exploitation of the rights in the work and the importance of the work itself to that profit. In such a case, the author is entitled to a reasonable additional remuneration. The amount of this additional remuneration shall be assessed on a case-by-case basis and shall always be reasonable in the given circumstances. However, this right does not apply to authors of computer programs, databases and cartographic works which are not collective works – unless the parties have expressly agreed on a different regime. Therefore, if the employer expects significant income from the use of the work, it is advisable for the employer to agree in advance with the author on the specific terms and conditions and the amount or method of calculation of any additional remuneration.[12]
Conclusion
It can be summarised that the regulation of an employee work is of fundamental importance not only in terms of the legal position of the employer in relation to the work created, but also in terms of the practical use of these works – for example, in the area of licensing, transfer of rights or commercial usability and other outputs.
While the Copyright Act provides a default framework that applies automatically where the creation of a work arises from the nature of the job description, given the non-mandatory nature of the key provisions, it is always advisable to pay due attention to the contractual arrangements.
Employees are often unclear about what rights they are entitled to as authors and what rights are transferred to their employer, which can lead to misunderstandings or disputes. Therefore, we recommend that employers explicitly address the issue of employee works in the employment contract or related documentation, including the terms of use of the work, the assignability of rights in the work or the possible modification of the right to additional remuneration.
Clear and comprehensible contractual arrangements not only prevent legal uncertainty but also allow flexibility to respond to the specifics of the position, industry or method of creation – thus protecting both the employer’s interests and the rights of employees.
If you have any questions about this topic or any other IP law issue, please do not hesitate to contact us.
[1] Section 2 of the Copyright Act.
[2] Section 12 of the Copyright Act.
[3] Telec, I., Tůma, P. Copyright Act. Commentary. 2nd edition. Prague: C. H. Beck, 2019, p. 650.
[4] Section 58(3) of the Copyright Act.
[5] Section 58(1) of the Copyright Act.
[6] Section 58(5) of the Copyright Act.
[7] Section 58(10) of the Copyright Act.
[8] Section 58(7) of the Copyright Act.
[9] Section 58(7) of the Copyright Act.
[10] Telec, I., Tůma, P. Copyright Act. Commentary. 2nd edition. Prague: C. H. Beck, 2019 , p. 652-653.
[11] Section 58(6) of the Copyright Act.
[12] Telec, I., Tůma, P. Copyright Act. Commentary. 2nd edition. Prague: C. H. Beck, 2019, p. 646 – 661.
JUDr. Tadeáš Petr, partner – petr@plegal.cz
JUDr. Tereza Pechová, junior lawyer – pechova@plegal.cz
19. 6. 2025