We were surprised to learn that the law of Ukraine entitles spouses of software developers to code developed by their better halves, same as to joint tenancy. At request of dev.by, Alexander Stepanovski, Managing Partner of Stepanovski, Papakul and Partners, and Svetlana Valuyeva, the Head of Intellectual Property Practice, explained the situation in Belarus.
Do not confuse copyright with titles to property
The architecture of family relations is complicated and varied, while marital property rights make it even more intricate.
The factors specifying an individual matrimonial property regime should be taken into account in both internal (between the spouses) and external (e.g., when a spouse employs the other spouse) relationships.
According to the general rule, property acquired by spouses during the marriage, regardless, which spouse holds the title to it, or paid for it, comprises their community property. Spouses have equal rights to possess, use and dispose of such property, unless their prenuptial agreement provides otherwise.
Premised on this concept, many people (including lawyers) infer that this rule would apply by default to intellectual property (including software) and exclusive rights to intellectual property developed/acquired by a spouse during the marriage. However, it is not so, to be precise, it is absolutely not so.
In order to find out, who holds the rights, we need to make a little foray into civil law, in particular, concerning the definition of property.
Property subject to civil law includes things, such as money and securities, other assets including titles, work and services; undisclosed information; exclusive rights to intellectual property and identification of parties to civil transactions, goods, work or services; intangible goods.
Computer software is a copyright subject, which is, in turn, intellectual property. A copyright holder has an exclusive right of legitimate use of such property in any form and in any manner.
Thus, software does not fall under the classical concept of property, while the Marriage and Family Code of the Republic of Belarus, unlike the analogous Russian Federal code, for example, provides for joint ownership of property acquired by spouses during the marriage.
Therefore, if construed literally, provisions of the Marriage and Family Code imply that exclusive rights are not part of community property. It will be more correct to say that community property comprises each spouse’s profit generated by intellectual property, in the form of money or other assets.
Should employers be wary of their developers’ divorces?
We do not think they should. Our legislation uses the term “work for hire”, i.e., scientific, literary, artistic works (including software) made by the author and commissioned by his/her employer, or within the scope of his/her duties, as specified in his/her labor contract.
The law provides that the exclusive right to a work for hire shall be assigned upon its creation to the employer, unless a contract between the latter and the author provides otherwise (which is rather rare, according to our practice). Thus, exclusive rights are held by the employer (not the employee).
It should be mentioned that a contract between the employer and the author may provide that the author (the author’s successors) is entitled to a royalty for the use of that work (see below, whether a spouse may claim that royalty).
Therefore, the risk that an unknown individual would knock some fine day at the software developing company’s door and state that he or she owns 50% of the original code referring to long-time marital relations with the author/developer and demand to terminate a software development agreement with a highly esteemed customer, is negligible. In other words, that individual may knock at your door, but it is unlikely that the grounds of such claims would be supported by a court.
Should authors watch out for problems?
There is no need to worry about the title to exclusive rights to a creative piece of work – it belongs to the author (unless it is proven that the better half has made a creative contribution into it). However, as regards income received (in kind or in cash), one should keep in mind that it may be included into community property. And, unless the prenuptial agreement provides for another approach, the spouses’ shares are deemed to be equal.
In particular, spouses may define the participation in each other’s income and in family expenses; they may also specify assets that should be assigned to each spouse upon divorce, and include other provisions concerning property relations in order to avoid unwanted disputes in the event of divorce.
Unless the spouses have executed a prenuptial agreement, the court may derogate from equality of parties in view of the interests of minor children or notable interests of either spouse.
Besides, it should be kept in mind that either spouse may have acquired exclusive rights not as the author (initial titleholder), but on other grounds (derivative titleholder) for consideration of any kind, for example, under a contract on alienation of the exclusive right. In spite of absence of generalized legal precedents of application of the law by courts in their consideration of divorce cases in part of exclusive rights, we believe that in such cases, the title value should be taken into account in the process of property partition between spouses.
It would make sense, though, to consider title retention by the derivative holder and payment of an adequate compensation to the other spouse. One may say that this approach correlates, to a certain degree, with a recent judgment of a Belarusian court, when spouses divided even their virtual property upon divorce.
Taking into account the derivative nature of exclusive rights (acquired under a contract, not by creation), such rights acquired with common cash may be viewed as a part of community property.
Finally, a programmer is not the first creative profession on Earth. Artists, composers and poets have been around long before programmers. Many of them married. Many separated from their better halves with stupendous scandals and property claims. However, even then the author would remains the author, and the court would be able to determine, how to split the money.
