Rights of use upon unconditional transfer of software

The unconditional activation or transfer of software created on commission is to be interpreted as the grant of the rights of use agreed upon in the contract. The presumption of copyright protection for complex computer programmes does not apply to software components. This was decided by the Higher Regional Court (OLG) Frankfurt/Main in a judgment dated 29.10.2013 (Az. 11 U 47/13).

In the framework of a software development agreement, the software manufacturer adapted existing software using agile programming methods and programmed a total of over 100 software modules for this purpose. These software components were subsequently accepted, transferred and paid for by the client. The client and the software manufacturer subsequently disputed the programming results of two sprints as part of the overall project, namely concerning the copyright rights of use and thus the client's entitlement to use the software.

In this regard, the software manufacturer asserted copyright infringement claims and justified this on the grounds that the client had not been granted any rights of use to the disputed programme components. The proceedings were in reality aimed at the enforcement of different claims, namely those for payment of further fees, against which the client raised objections regarding software defects.

The decision of the court

The Higher Regional Court (OLG) Frankfurt/Main ultimately rejected the injunction claims raised in the interim proceedings to cease the use of the software. On the one hand, this was justified on the grounds that the copyright protection capability of the programme components had not been sufficiently substantiated in the first place. Unlike complex software, the presumption established by the Federal Court of Justice (BGH) for copyright protection does not apply to mere parts of software; such protection must therefore be fully proven or, in summary proceedings, substantiated in sufficient detail. This requires a detailed exposition of the complexity and the existence of an independent intellectual creation.

Furthermore, in the court's view, the rights of use of the software, which would exclude an injunction claim, were also granted. This follows from the circumstances surrounding the project implementation, in particular the transfer, acceptance and payment of the software. By application of the doctrine of purpose transfer, it is therefore to be assumed that unrestricted rights of use were transferred.

Conclusion

The decision demonstrates what is, in principle, logical. When a software manufacturer transfers or activates software created on commission without any reservation whatsoever, this expresses his intention to transfer the rights of use required for the contractually compliant use of the software. Should he wish to prevent this or make it subject to certain conditions, an express provision in the software development agreement is advisable. In this way, the grant of rights of use can and should always be made conditional upon payment of the full fees for the entire project. Otherwise, as regularly occurs, the situation arises in which the client has long been using the software in production whilst the software manufacturer is still fighting for his remuneration.