Intellectual capital, innovation, and creativity are enterprises’ most significant drivers in today’s highly competitive business environment. Businesses must adopt innovations to thrive in today’s rapidly evolving world, and they must have unique offerings to stand out among their rivals. Without a question, it is the employees who will make the difference for businesses. Employees that are constantly striving to improve themselves will provide novel ideas at work, providing their company with a competitive edge. Given the importance of the human aspect in intellectual capital, companies must create an environment that encourages employees to be creative and thus be a part of the resultant success. In this case, the question is whether the employer or the employee will own the property rights to newly created products. This article will explain when employers have rights in the works created by their employees, as well as the requirements that must be satisfied to exercise those rights to avoid potential future conflicts.
Employer’s Ownership of Right Under The Law On Intellectual And Artistic Works
i) The work must be created by a civil servant, an employee, or a worker.
Law no. 5846 on Intellectual and Artistic Works (“Law”) refers to the person creating the work as the author. Pursuant to article 18/2 of the Law, titled “Exercise of Rights”, the authority to exercise rights belongs exclusively to the author; however, “the rights in works created by civil servants, employees and workers during the execution of their duties shall be exercised by the persons who employ or appoint them; provided that the contrary may not be deduced from a special contract between such persons or from the nature of the work.”
Since this article governs ownership of rights with respect to works created by employees who have obligations towards their employers under their employment contracts, article 18/2 of the Law will not be applicable in the absence of an employment contract.
In fact, the Court of Appeal ruled in a case as follows: “Pursuant to article 18 in Law no. 5846 on Intellectual and Artistic Works, an employer can exercise the rights related to a work created by an employee only if there is an employment contract between the creator of a work and the employer, which requires the creation of such a work, without any clause stating that the rights in the created work will belong to the author of the work. In this lawsuit, J. M., the creator of the disputed software, and the defendant company did not have an employment contract for the purpose of creating computer software, and the latter was unable to rebut this. Moreover, A. Ö., who allegedly contributed to the software, served as an executive assistant at the defendant company, and this service did not involve creating software. Since only an employment contract permits the employer to exercise the rights in a work created by an employee, work agreements or other agreements regarding the marketing of software do not grant authorship of a work and the transfer of rights arising from the work.”(11th Civil Chamber of the Court of Appeal, decision no. 2014/12293, file no. 2014/13, of 27.06.2014)
As the decision of the Court of Appeal illustrates, if an employment contract exists between an employer and an employee, the employer has the right to exercise the rights to the work created by the employee. However, the work must be relevant to the company’s field of operation, created as part of the employee’s duties in line with their position’s requirements. Otherwise, the company will not be permitted to use the rights to this work.
ii) The work must be created during the execution of duties.
One of the most important criteria for an employer to exercise the rights in a work created by an employee is that the work has been created by the employee “while executing their duties”, and that it is relevant to the employee’s job responsibilities. Otherwise, the employer will be unable to exercise the economic rights in the work.
In a lawsuit involving the allegedly illegal publication of a book written by a lawyer working in the legal department of a newspaper, referring to the author as H. Holding Law Firm, from which the lawyer resigned, without the lawyer’s permission, following the termination of the lawyer’s (plaintiff’s) employment contract, the Court of Appeal concluded that the disputed book was written by the plaintiff (lawyer) and ruled that the work was not created as part of the lawyer’s profession, and that it was a separate product of labor. (11th Civil Chamber of the Court of Appeal, decision no 1989/384, file no. 1988/5471, of 30.01.1989)
Therefore, even if the author is an employee, they will own the rights to their work if they have created it independently of their employer’s instructions and if the work is unrelated to their duties at work.
iii) There must be no written agreement stating otherwise, or the contrary must not be inferred from the nature of the work.
Article 18/II in the Law, which entitles an employer to exercise the rights in a work, stipulates the following criteria: “provided that the contrary may not be deduced from a special contract between such persons or from the nature of the work”. This article makes it clear that, in accordance with the principle of free will, the employee and the employer may agree on who will own the rights originating from the works.
Thus, the Law ensures the employer’s capacity to exercise economic rights without the requirement for a separate right transfer agreement that includes a special clause relating to the authorship of the employee’s works. As a result, in the absence of a special contract, the employer has the right to use any work created by the employee in conformity with the law.
Unless the nature of the work indicates differently, the employer is also entitled to exercise the relevant economic rights. For instance, the employer will be entitled to exercise rights originating from innovations developed by a researcher tasked with improving the technique of tools manufactured in a plant, as well as advertisements and posters created by the employees of an advertising agency.
In conclusion, employees must develop innovative products/ideas in order for businesses to thrive in a developing country with strong production potential, such as Türkiye. Employers need to carefully draft the provisions related to intellectual property rights in employment contracts to exercise the rights to use works created by their employees.
The work in question must be the outcome of duties completed in conformity with the employee’s employment contract in order for the employer to be granted the right to utilize it under article 18/II of the Law. As such, the employer’s right to use will be clearer if an employment contract or supplemental protocol specifies the economic rights of the works originating from the employee’s activity and contains clauses on the transfer of intellectual property rights. Therefore, employers must get legal advice from professionals in the field to avoid any issues regarding their relevant rights. Thus, they can prevent potential disputes in the future.
