Copyright law - how does the UAE compare with common law jurisdictions?

16 February 2017

Civil law and common law traditions exert divergent influences on certain features of national copyright laws, which results in major differences between copyright law in civil law jurisdictions and in common law jurisdictions:

In civil law jurisdictions, the protection of the author is the cornerstone of copyright law. As a result, copyright law is aimed at protecting both the author's economic interests and the author's reputation against the unauthorized use or alteration of his/her works. To this end, authors are granted some non-transferable rights and retain copyrights in their works absent any express assignment of rights, even in the context of an employment contract.

In common law jurisdictions, copyright law promotes progress and economic benefits arising out of a work. As a result, an author is seen as a transferor of rights that constitute a source of economic benefits for the community. As such, all of the authors' rights are transferable, and employers or commissioning parties may benefit from an automatic assignment of rights in a work to facilitate investment and exploitation of the rights.

The UAE is a civil law jurisdiction, highly influenced by French law and Islamic law. As such, the provisions of the UAE copyright law fundamentally diverge, in some respects, from copyright law in common law jurisdictions (such as the United Kingdom (UK), Ireland, the United States, Australia and New-Zealand).

However, it is common practice for many companies operating in the UAE to run their business on the assumption that the principles enshrined in the UAE Federal Copyright Law (the "UAE Copyright Law") are the same as those applied in common law jurisdictions. This is not the case. This false belief may have a significant impact on businesses since it may result in authors' rights arising out of the company's activities not being effectively passed through to the company, and remaining with the individuals who created those rights, the consequences of which are detailed hereafter.

Since the UAE is attracting more and more businesses in a wide variety of sectors, it is paramount for these companies employing people and/or commissioning works in the UAE to know the differences between the copyright law in the UAE and the copyright laws in common law jurisdictions.

This article highlights some of the typical main differences between UAE copyright law and the copyright laws in common law systems, which any business operating or looking to operate in the UAE should be aware of.

No automatic transfer of copyrights

In both civil law and common law countries, the general rule is that copyright initially vests in the author of the work.

However, in common law countries, the copyright may initially vest in the employer or another person/entity for whom the work was prepared.

In the United-States, under the "work made for hire" doctrine, the copyright in a work created by an employee within the scope of his/her employment will automatically (without a written assignment) and initially vest in the employer. A commissioner may also own the copyrights in a work made by an independent contractor as a work made for hire under certain circumstances.

This doctrine is premised on the principle of facilitation of investment and exploitation.

A similar rule exists under the laws of the UK and the laws of Ireland with respect to works made by an employee in the course of his/her employment.

In civil law countries, however, ownership of copyrights in a work vests in the author of such work, until the copyright is assigned through a written assignment instrument.

As a result, unlike what it is often assumed, an employer or a commissioning party does not automatically own the copyrights in the work made by an employee in the course of his/her employment or commissioned to an independent contractor. This rule applies in the UAE and is a public order rule.

Under the UAE Copyright Law, absent a written assignment of copyrights in employment contracts or commissioning agreements, the copyrights will not be passed through to the employer or commissioner of the work, and will remain with the employee or the independent contractor (unless the work may qualify as a collective work under Article 1 of the UAE Copyright Law, which may be difficult to prove in practice). Confirmatory assignments may also have to be put in place for the assignment of copyrights to the employer or commissioner to be valid under UAE law, as explained in section two below.

Companies must therefore ensure that adequate assignment agreements are put in place with their employees and independent contractors in the UAE to ensure the effective transfer of the rights to the company.

It is paramount for all companies in the UAE, but especially those with research and development (R&D) departments (laboratories, cosmetic companies, etc.), design offices in the UAE (fashion brands, etc.), or creating content in the UAE (advertising agencies, design/brand agencies, etc.) to include in their standard employment contracts an express assignment in their favour in respect of the copyrights in the works created by their employees in the course of their employment. We also strongly recommend that companies put in place with their employees a system of confirmatory assignments of the copyrights in the works created in the course of the employment contract (see section two below).

Likewise, any companies, regardless of their field of activity, should ensure that their agreements instructing third party contractors and governed by UAE law contain the relevant assignment clauses allowing the copyrights in the deliverables ordered to be transferred to the company (such as a logo, a web design, a retail design, a packaging, a software, the architecture of a building, etc.). A clause merely referring to the assignment of all the rights in the works as works 'made for hire' would be irrelevant and ineffective.

It is important to note that a copyright assignment is only valid under the UAE Copyright law if it satisfies a number of conditions, including that the assignment should: be in writing, expressly specify the rights assigned, and include statements of the purpose for which the rights are assigned and the geographical area in respect of which the rights are assigned. In addition, one must note that under UAE law, an assignment of copyrights in more than four future works is null and void, as further detailed in section two.

Without an assignment that complies with the provisions of the UAE Copyright Law, companies are at risk of having to defend a copyright infringement claim from the owner of the rights that were not transferred (either an employee or a contractor), on the basis of the unauthorized use of its work(s), which could notably result in damages to be paid to the claimant and an injunction to withdraw the related work(s) (or product comprising such work(s)) from the market (hence entailing withdrawal and replacement costs).

If the company attempted to assign the rights to a third party, such third party may also face a copyright infringement claim from the owner of the rights. In such a situation, we would expect the third party assignee to file a contractual liability claim against the company that assigned to it copyrights it did not own.

In addition, in the event the company were to seek to enforce its intellectual property rights against an alleged infringer, there is a significant risk that the alleged infringer could be successful in challenging the ownership of such intellectual property rights, which would result in the dismissal of the infringement claim.

Also, if a company cannot prove its ownership of copyrights, it may have a significant impact on its ability to find investors or on the price of its business when trying to sell it.

No general assignment of future copyrights

Another major difference between copyright law systems in civil law jurisdictions and common law jurisdictions resides in the assignment of future copyrights.

In common law countries, there is no prohibition on the contractual assignment of a future copyright in a work that has yet to be created. As a result, it is possible to assign future copyrights, i.e. copyrights in works that are still to be created.

In civil law countries, as a general rule, an agreement that concerns all the works or all the works of a specific type that will be created by an author in the future is void.

In particular, the UAE Copyright law contains a provision that deems any disposal of the author's future intellectual rights in five or more future works to be null and void. But if, for example, an employee is employed in a creative role, this could mean that his/her five works are completed within a few hours of signing any agreement.

As a result, in order to overcome such restrictions from assigning five or more future works, we would recommend that companies put in place with their employees in the UAE a system of confirmatory assignments that should be completed and signed by the employee once it has created and delivered any work in the context of his/her employment agreement. This means that the employee does not assign rights in all future works created in the course of his/her employment contract but assigns the rights as and when a particular work is completed.

The same applies to service providers once they have created any deliverables in the context of a service agreement (involving the delivery of more than four works during the term of the agreement), and have been paid for such deliverables in accordance with the service agreement. That would, for instance, apply in the case of a design and build agreement between an employer and a contractor, which generally involves the delivery of multiple design documents.

A system of confirmatory assignments executed upon delivery would ensure the effective assignment of rights in the deliverables where more than four deliverables are involved. More generally, we recommend putting in place a system of confirmatory assignments of copyrights with any service providers as a matter of good practice since it allows a clear identification of the deliverables, the copyrights of which are assigned to the commissioner, and hence limits any possibility of a successful challenge from the contractor as to the copyrights assigned to the company.

As a result, we would recommend adding in all employment agreements or service agreements governed by UAE law a clause pursuant to which the employee or the contractor undertakes to execute any required documents, during the term of the agreement or any time after its termination, in order to ensure the effective assignment of rights in the works/deliverables.

Strict limitations in the waiver of moral rights

As a general rule, moral rights granted to authors consist of the right of disclosure of the works, the right of attribution (i.e. right to claim or disclaim authorship in the work) and the right of integrity (i.e. right to prevent distortion and modification of a work).

In the United States, however, authors benefit from limited moral rights of attribution and integrity because such rights only exist for a narrowly defined group of works of visual arts.

Moral rights are personal and cannot be assigned. However, in most common law jurisdictions, moral rights can be waived. It is therefore usual practice to see in assignments or licensing agreements governed by US, UK or Irish laws, provisions under which authors waive their moral rights. As a general rule, a waiver of moral rights is only valid if it is in writing and it identifies the relevant copyrighted work(s). Such an approach is consistent with the functional view of authors' rights in these countries.

On the contrary, in civil law countries, including the UAE, general waivers of moral rights would ordinarily be unenforceable as it would be equivalent to an assignment of moral rights, which is prohibited in accordance with the traditional approach of copyrights in civil law jurisdictions (pursuant to which authors' works are protected as the products of the authors' personality, so that authors should be protected against any modification of their works).

An author may only undertake in writing not to exercise his/her moral rights in relation to a specific person or entity, provided that the agreement specifies the work(s) and specific uses to which the undertaking applies. The more detailed these provisions are, the greater the likelihood that they will, if challenged, prove valid and enforceable in court.

Copyright laws in the other GCC countries contain provisions similar to the ones described above and in force in the UAE.

Gowling WLG has extensive experience in advising clients on the full spectrum of copyright issues, in a wide range of sectors such as media and entertainment, retail and leisure, fashion, FMCG, luxury goods and hospitality.

For more information regarding copyright law in the UAE or in the other GCC countries, please contact Jon Parker or Vanessa Delnaud.

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