Recent Court of Cassation Decision on the Analogous Application of Copyright Transfer Agreements and Publishing Agreements

Copyright constitutes a set of moral and economic rights granted to the author of a work that reflects their intellectual effort, bears their characteristics, and is tangible and complete. These rights protect both the economic and personal interests of the author. Often, authors require capital and various resources to effectively utilize their work and transform it into an economically profitable product. In other words, utilizing a work economically often necessitates additional resources. For instance, it is not always feasible for a novelist to independently publish and distribute their own novel.

In the Turkish legal system, copyright is protected under the Law No. 5846 on Intellectual and Artistic Works (“LIAW”), which came into force on December 13, 1951. Under the LIAW, for an intellectual product to be recognized as a “work,” it must bear the characteristics of its author, be materialized, and fall within one of the categories defined as literary, musical, fine arts, or cinematographic works. Intellectual products that do not meet these criteria cannot benefit from copyright protection.

The LIAW underwent amendments in 1983, 1995, 2001, and 2004, and efforts to draft a new version have been ongoing since 2010. Despite these efforts, legal regulations concerning technological advancements and the commercialization of works remain insufficient in certain areas. One particularly contentious issue is the prohibition under Article 48 of the LIAW, which states that transfer agreements cannot be made for works that have not yet been created, rendering such agreements null and void.

Formal Requirements and Protection Mechanisms in Copyright Transfer

Under the LIAW, the transfer of copyright is subject to strict formal requirements designed to protect the rights of authors. These provisions allow authors to voluntarily transfer the rights arising from their works while safeguarding their interests. For instance, rights cannot be assigned for works that have not yet been created, and all assigned rights and authorizations related to existing works must be explicitly listed individually in the agreement. These regulations serve to prevent the exploitation of the creator’s intellectual labour while providing a legal framework for the dissemination of the work. However, with the commercialization of works, these formal requirements can sometimes be misused by authors themselves, leading to disputes and challenges in enforcement.

The established jurisprudence of the 11^th Civil Chamber of the Court of Cassation provides that the assignment of rights cannot occur in cases where the formal requirements are invoked in bad faith. However, it has been accepted within the scope of the established jurisprudence that invoking formal requirements in bad faith is an abuse of rights. Moreover, it has been ruled that in such cases, the use of the work up until the date of the lawsuit or claim does not constitute copyright infringement. (Yargıtay 11.HD 04.06.2008T. 2007/5015 E. 2008/7374 K.)

Recent Court of Cassation Decision: Copyright and Publishing Agreement

The recent decision of the 11^th Civil Chamber of the Court of Cassation dated May 27, 2024, addresses the claim that copyright assignment agreements between the plaintiff, an illustrator, and the defendant, an author, were executed before the works were created. In this case, the plaintiff and the defendant entered into six copyright assignment agreements between 2012 and 2018, concerning illustrations for the author’s children’s books. In these agreements, the plaintiff explicitly transferred all economic rights related to the illustrations for the respective children’s books, specifying each right individually. The rights were assigned to the defendant without any territorial or temporal limitation and included the right to publish or withhold publication of the illustrations. In return, the illustrator received a one-time payment for each agreement. During the continuation of the contractual relationship between the parties, the books were reprinted multiple times.

However, in 2018, the defendant claimed that the agreements between the parties were executed before the works were created and did not meet the formal requirements, rendering them invalid. Based on these claims, the defendant filed a compensation lawsuit under Article 68 of the LIAW. In this lawsuit, the Local Court ruled that the delivery of the works fulfilled the contractual obligations, thereby resulting in discharge by performance. However, the court also determined that the compensation paid under the agreements applied only to the first print edition. Following the appeals and cassation applications by both parties, the 11^th Civil Chamber of the Court of Cassation upheld the Local Court’s conclusion that the delivery of the works fulfilled the contractual obligations and resulted in the discharge by performance. The Court also adopted the view that, although the defendant author was not a publisher, the provisions regarding publishing agreements as regulated in Article 491 and subsequent articles of the Turkish Code of Obligations No. 6098 (“TCO”) should be applied by analogy. Furthermore, the Court agreed that, since the agreements did not specify the number of prints, the assignment fee paid under the agreements was limited to the first print edition.

Conclusion

The recent decision of the Court of Cassation serves as a significant guide regarding the legal framework of both copyright transfer and publishing agreements. However, the approach adopted in this decision raises questions about whether the fulfilment of obligations through delivery should be deemed sufficient to conclude that the transfer has occurred in cases where copyright transfer agreements are executed before the work is created, or whether this conclusion stems solely from the application of publishing agreement provisions by analogy. On the other hand, the decision introduces a new dimension to the ongoing discussions surrounding the interplay between the provisions of the LIAW and the TCO. It is anticipated that this decision will provide valuable insights for future practices aimed at balancing the protection of the authors’ rights with the economic utilization of their works.