Transfer of copyright is usually carried out in the form of a license. A license permits actions that would be violations in the absence of such permission. This is a general concept in the common law system. As a rule, in civil law copyright may not be fully assigned. The Bulgarian law recognizes only two types of licenses. The law does not use the term “license”, but rather speaks of granting exclusive or non-exclusive rights of use. Chapter VII of the Law contains regulations on the use of works. It consists of nine sections providing comprehensive provisions62.

I. General provisions. Protection regulations.

The general provisions outline the basic principles of protection of the interest of the author as the economically weaker party to the contract, by guaranteeing certain minimal rights to them. The protection regulations in the general provisions provide for the payment of remuneration to the authors for any type of use and any use of the work created by them. They guarantee authors that, irrespective of the type of transfer of copyright, the user will commence using their work in a way that will generate profit for them, in addition to reaching wide audience. In case the user does not commence the use of the work

in the term agreed upon in the contract, the author shall have the legal right to terminate the contract and exercise his author’s rights personally, or transfer them to another user.

Parties to the contract of use of the work are the author, who can participate independently in the legal relationship, and the user to whom copyright is transferred. The author may also not participate in a contractual relationship with the user, despite the fact that he or she is the creator of the work. This is possible in the cases where the author has transferred the copyright in a certain work to an organisation or an independent management entity for management of rights registered as set out in CNRA.

CNRA provides for two types of transfer of rights: (1) transfer of an exclusive right to use a work, and (2) transfer of a non-exclusive rights to use the work. The exclusive right to use a work shall be granted explicitly and in written form. If the written contract between the two parties does not include an explicit agreement on the transfer of such right, the following presumption shall enter into force – “it shall be considered that non-exclusive right has been granted” (Article 36, p. 4).

CNRA contains a protective regulation regarding the territory in which the work may be used. If the contract does not specify a territory in which the user may use the work, the country of citizenship of the user or the country of his seat, if a legal person, shall be considered as such territory (Article 36, p.6).

Consideration

The contract for use shall always be a contract made for pecuniary interest, irrespective of whether the user of the work has been granted an exclusive or non-exclusive right. This principle is enshrined in Article 36(1) of the Act, according to which “By concluding a contract for the use of his work the author shall grant to the user the exclusive or non-exclusive right to use the work created by him or her under specific terms and in exchange for compensation”. If the contract does not establish the user’s obligation to pay remuneration and does not include non-mandatory rules guiding such payment, then it shall not be considered a copyright transfer agreement. The regulation governing the special rules of the different kinds of copyright transfer agreements provides non-mandatory rules which

provide the basic elements of contractual relations that the two parties have not agreed upon, whether due to lack of consent or another reason.

The Copyright and Neighbouring Rights Act states that author’s compensation may be defined as a portion of the revenues received from the use of his work, as a single amount or in other form (Article 38(1)). The law recognizes the risk underlying the author’s agreement to receive the compensation in a single amount. In paragraph 2 of the same Article, the law stipulates that whenever the compensation defined as single amount proves obviously incommensurate with the revenues received from the use of the work, the author may claim increase of the compensation. If no agreement can be reached between the parties, the issue shall be resolved through the courts ex aqueet bono. Remuneration is due to the author for each use of his or her work and the parties may not derogate from this rule.

Duration of the contract

The law overrides a maximum term of copyright agreement. A contract for the use of a work may not be concluded for a term exceeding ten years. Whenever the contract has been concluded for a longer term, it shall have effect for ten years only. This limitation shall not apply to contracts concerning architectural works. If no term has been specified in the contract, it shall be assumed that the right to use the work has been granted for a period of three years, or five years for architectural works. The law protects the author’s interest also by declaring invalid any contract under which the author has granted use of all works which he may create for the rest of his life.  

The transfer of copyright by the author does not create a principal obligation of the user to use the work. Thus, in order to guarantee the author’s right to see his work published or filmed, the law guarantees the author’s right to “revert” the transferred right. The law provides the author with the opportunity to cancel the contract if performance of the contract has not commenced. The provisions of Article 39 stipulate that if a contract granting exclusive rights does not specify a deadline by which the user should commence the use of the work, the author may cancel the contract if the use has not started within two years from the conclusion, or

from the date of ceding the work if done after conclusion of the contract. This protection regulation not only guarantees reversion of the transferred right, but also ensures receipt of remuneration for the use of the work, when the remuneration is defined as part of the profit.

II. Copyright agreements

1. Publishing contracts

Publishing contracts are the oldest known copyright agreements. They continue to maintain their significance today, as not only literary works are published, but also musical, theatrical and others. The broad practical application of publishing contracts is based on their comprehensive subject-matter. In accordance with the definition set out in Article 43 of the law “By the publishing contract the author grants the publisher the right to reproduce and distribute the work, and the publisher is obliged to perform these actions and to pay the author compensation”. Publishing contracts may only be concluded in written form. When explicitly agreed upon between the parties, the law permits the author to grant the publisher the right to use the work for other purposes besides publishing. In this case, the publisher undertakes to notify the author in written form about any use of the work by third persons, as the author is entitled to remuneration for any use of the work. Thus, the author can control the remuneration which he receives from the publisher for each use of his or her work.

Article 47 of the Act provides non-mandatory rules which regulate the relationship between authors and publishers when the contracting parties to publishing contracts have failed to fully settle all points of the contract. There rules emphasize the protection of copyright and guarantee authors their fundamental rights in the legal relationship.  Unless otherwise provided by the publishing contract, it shall be assumed that the publisher has been granted rights for one printing only, when this printing does not exceed ten thousand copies. The print-run shall be considered sold when the unsold copies do not exceed five percent of the entire print-run. The law guarantees the author a compensation of fifteen percent of the retail price of each sold copy of the work. The work may be distributed within the territory

of the country where the author is located.

At the time of concluding a publishing contract, the work does not necessarily have to be already created. The author may transfer the rights of reproduction and distribution of a work that he undertakes to create. In this case, the work must be sufficiently individualized and created within a fixed term. Unless agreed otherwise, the publishing contract shall be terminated with expiration of its term or when the print-run is sold out.

The right to reproduce and distribute a work which has been already created, or a work which the author has undertaken to create may be granted by a publishing contract. It follows from here that submission of the work does not constitute conclusion of the contract. The author may terminate the contract in case the publisher does not undertake subsequent reproduction and distribution of a new print-run within one year of the exhaustion of the last print-run. This is applicable when the contract has been concluded for more than one printing. A contract is concluded in written form and the author shall, similarly, terminate it by written notification to the publisher.

The basic characteristics of the contract can be derived from the legal definition of the publishing contract and the specificities of the non-mandatory rules. The publishing contract is bilateral – it has two parties, author and publisher; consensual – the contract is considered to be concluded upon agreement between the parties and not upon submission of the work; made for pecuniary interest- even if a compensation is not explicitly negotiated, under the law, the publisher is obliged to pay the author fifteen percent of the retail price of each copy sold; formal – the written form of the contract is mandatory and it serves as grounds for the contract’s validity; a fixed-term contract – the contract shall always be concluded for a specific period63.

  1. Contracts on reproduction and distribution of phonograms

§ 2 p.7 and p.8 of the law defines audio recording as “the fixation on a durable material medium of a sequence of

sounds in such a way as to permit them to be perceived, reproduced, rerecorded and broadcast by wireless, cable or other technical means”, and a phonogram is the product of audio recording.

The right granted by the author for the recording, reproduction and distribution of his work in the form of phonograms shall not include the right to use the recorded work for public performance, wireless broadcasting, or transmission or retransmission by cable. Those are separate property rights upon which the author shall agree separately. The author is entitled to separate compensations for each use.

Non-mandatory rules guide the contracts on reproduction and distribution of phonograms. These rules shall be implemented provided that the author concludes an individual contract with the user and has not assigned the management of these rights to a collective management organisation. The following obligations of the user are set out:

  • the user shall be obliged to make the fixation within six months from the day on which the author has submitted the work in a form allowing fixation of the work. The reproduction and distribution shall be carried out within six months after the fixation. The user shall be granted the right to reproduce the work in a run of no more than 5000 copies;

  • compensation shall be owed to the author amounting to the respective part of 10 percent of the wholesale price of each sold copy of the sound medium, proportionally of the duration of the author’s work to the duration of the whole sound medium;

  • the user shall provide the author with 5 copies of each produced variant of the sound media, free of charge.

  1. Contracts on public presentation or performance

In accordance with the provisions of Article 55 of the law, “With a contract for public presentation the author of a work of performing arts shall grant a user the right to present the work, and the user shall be obliged to present the work and pay compensation to the author”. Article 3, paragraph 3, item 3 offers a non-exhaustive definition of the works of performing arts that are subject to protection. Works of performing arts are drama, musical drama, pantomime, etc. The use of these works is realized when the presentation is conducted in a manner designated for direct reception by an unlimited

number of persons. Users may be natural persons or legal entities – most often those are theaters, however they can be organizers of concerts, performances, spectacles, etc. and other that are professionally engaged in performing arts works. Usually such contracts are concluded between the users and organisations for collective management of rights. Authors are less often parties to such contracts. If the parties have not managed to negotiate some of the clauses in the contract, the principle jiusdispositivum, which is set out in the law, shall be implemented. According to CNRA:

  1. the author may grant the right of public presentation to other users outside the area of his or her location;

  2. the term of the contract shall be three years;

  3. the user undertakes to publicly present

the work within one year of its receipt;

  1. the compensation paid to the author shall amount to fifteen per cent of the gross revenues of each presentation of the work;

  2. the user shall report to the author twice per year on the number of public performances and the amount of revenue received;

  3. the author may terminate the contract when the user has halted the public presentation of the work for a period longer than one year.

When the the contract’s subject-matter is broadcasting performing arts works by wireless means or transmission and retransmission of such works by cable, unless agreed otherwise, it shall be assumed that the author has granted the user the right of a single broadcast or transmission of the work.

  1. Contracts on public performance, wireless broadcasting, transmission or retransmission via cable and granting access

Consent on the public performance, live or recorded, of a musical, literary or audio-visual work, which has already been made available to the public, shall be given in written form and prior to the abovementioned acts. Consent is granted by the author or by a duly authorisedorganisation for collective management of rights, respectively by an independent management entity registered under CNRA.

The contracts for granting right for public performance of works during concerts shall be signed with the persons organising the concerts. The said persons shall provide the place or venue of the concert, the performers of the work, and determine the technical or other means of the performance. The organisers shall not obtain a place or venue for the concert unless they present certified copies of the contracts for assignment of the right to publicly perform the works that are to be performed during the said concert. The collective management organisation shall receive a list of the works and their authors prior to the performance, and a report on the revenue generated from the concert and the allocation of compensations among copyright holders.

The concert organiser shall be obliged to place his name, logo or other identity sign on advertisement materials, publications in the press, posters, billboards, brochures, concert tickets, and any other means of advertisement of the upcoming concert.

  1. Contract for publishing in periodicals

Many of the publishing contract’s characteristics apply to this type of contracts. Nevertheless, they have certain specific features, defined by the specifics of the media. This is the reason why they are separately regulated by the law.

There exist two types of contracts on publishing in periodicals:

  • contracts for creating works for the purposes of periodicals;
  • contracts for publishing previously created works in periodicals.

In both cases the contract is bilateral, it does not require a written form and always requires payment of compensation to the author.

The author of a work under mandate may not offer that work or parts thereof to other periodicals for publishing or as a separate publication, as well as for wireless broadcasting prior to its publishing by the publisher. This restriction shall not apply where fifteen days, for newspapers, and three months, for magazines, have elapsed since the submission of the manuscript and the publisher has not published it or has not informed the author within those terms that the work will be published. Unless explicitly prohibited in the contract, they author shall be entitled to subsequent use of the work already

  1. Contracts for future works. Works created under an employment or civil service relationship (Article 41)

The Copyright andNeighbouringRights Act has singled out two cases: works created under an employment or civil service relationship (Article 41), and works created under mandate (Article 42).

The employer or the appointing authority shall have the exclusive right to use such a work for his or her own purposes without authorisation by the author and without paying compensation. Such use may be publication, reproduction by another means and distribution of the work. The law imposes four restrictions here:

  • the aforementioned shall be valid, unless other conditions have been explicitly agreed upon in the employment contract, for instance additional compensation;

  • the employer or the appointing authority may exercise this right in a manner and to a degree consistent with his usual activity;

  • the employed undertakes to recognise the employee’s authorship of the work;

  • the employer undertakes to indicate the author’s name, pseudonym or other identifying copyright mark in a suitable form whenever the work created under the employment relationship is used.

The latter two restrictions derive from the mandatory provision in Article 16 of CNRA, according to which the recognition of authorship and indication of the author’s name whenever the work is used are inalienable rights of the author. In accordance with Article 41(2), the employer or the appointing authority may exercise this right in a manner and to a degree consistent with his usual commercial activity and may not exploit the work in a manner as to generate profit entirely from its exploitation. “Under the employment relationship (or civil service relationship)” means that not only should the work be created within the employment contract’s term, but there must also be a connection between the nature of the work done under the employment contract and the created piece. The scope of Article 41

does not cover every work created under an employment relationship. A direct connection must be observed between the characteristic activity and processes of the occupied position and a created work, i.e. the work must be created in the course of the employee’s professional duties. Whether a work has been created under an employment relationship is defined by the kind and nature of professional duties, the intellectual effort expended during the work process (working hours under the employment contract), the exploitation of the employer’s facilities. The employment contract must exist at the date of creation of the work. The contract’s subsequent termination does not have an impact on the employer’s property rights to use the work in a way consistent with his or her usual activity after termination of his contract with the employee. This is so because the employer’s right to use the work for his or her own purposes and as usual arises by virtue of law and does not derive from the employment contract with the employee65. Whenever the remuneration of the author at the time of creation of the work proves incommensurate with the revenue collected from the use of the work, the author may demand additional compensation. If the parties cannot reach an agreement, the issue shall be resolved through the court ex aequoet bono66.

  1. Contracts for future works. Contracts for works created under mandate (Article 42)

In accordance with the provisions of Article 42 of CNRA, copyright in a work created under mandate belongs to the author of the work, unless otherwise provided by the assignment contract. Unless agreed otherwise, the mandator shall have the right to use the work without authorization by the author for the purpose it was commissioned67. Thus formulated, the provision may be interpreted in the sense that what is otherwise agreed on by the parties is the contrary, namely that the parties to the contract for works created under mandate may explicitly negotiate that the copyright of the work created under the service contract should arise for the mandator. This would

lead to the misconception that copyright arises directly in the mandator’spatrimonium under the contract itself and pursuant to the two parties’ explicit will, as the latter becomes holder of the copyright. Following this line of reasoning, we may conclude that from this point on the mandator may exercise all property and moral author’s rights to the fullest extent, including the rights under Article 15, paragraph 2, points 2 and 4, which are inalienable under Article 16.

The right to claim authorship or the right to require that his name be indicated whenever his work is used arises for the author and is an absolute right which enjoys protection against any infringement, regardless of who commits the infringement. The contract does not exempt the mandator from the obligation to indicate the author’s name on the mandated work. With the contract, the mandator may only negotiate conditions under which property or separate moral rights in the work may be assigned to him with the exception of the rights considered as inalienable under Article 16. The author may not transfer his authorship of the work, nor may he waive it68. This right is the author’s inalienable right and it shall be protected by the law, even after his death.

A different stance, however, may be observe in the case-law of the court. It is considered that, if the author has not explicitly declared in the contract for work created under mandate that he requires his name be indicated in an appropriate way whenever the work is used, then the absence of such indication shall not constitute infringement to his right under Article 15, p. 4 of CNRA. This stance has settled in the court’s case-law and, in this regard, two judicial bodies give their subsequent ruling. Initially, this thesis is adopted by a district court’s judgement69, which states the following: “neither a copyright mark, nor any other identifying mark of the author have been found in the plaintiff’s design or the labels used by the defendant; under this condition and as the design itself does not contain the author’s mark, there are absolutely no grounds to require the user to indicate the authorship

whenever the work is used” This thesis is endorsed in a judgement by the Plovdiv Court of Appeal70, which, too, makes the exercise of copyright under Article 15(1)(4) conditional. In a judgement, the court of second instance states the following: “With regard to the compensation claimed by the author himself for damages arising from the violation of his moral rights, it should be noted that the right under Article 15(1)(4) to require that his name, pseudonym or other identifying mark be indicated in a suitable manner whenever his work is used may not be considered to have arisen in his patrimonium, as he has not deemed it necessary to indicate such at the time of creation of the work.” Thus the court deprives the author of his right of paternity and, as this right derives from the right to authorship, it calls into question the authorship of the work in general.

The court requires some additional actions on behalf of the author (apart from the creation of the work), and if he does not perform the said actions, other legal entities shall not be obliged to recognize his authorship. According to the court, if the author has not indicated his name or identifying mark in the work, then this moral right has not arisen in his patrimonium at all. The court considers that in the absence of such indication, the author has not declared his will for the moral right under Article 15, paragraph 1, p.4 of CNRA to arise in his patrimonium. According the line of reasoning of the quoted judgement, it is possible that copyright in an incomplete form should occur, without entitlement to the moral right under Article 15(4) of CNRA. This concept is completely false. The creation of a work is the moment at which the work is realised in a tangible form that allows it to be perceived by others. This act confers the rights of authorship and paternity.

This misapplication of Article 15(4) is a result of another judgement71. The court rules that “despite this being a moral right, explicitly provided for by the law and conferred the moment the work is created, similarly to the other rights under

Article 15 of CNRA, it may be realized if its holder declares his will to exercise the right. It shall depend entirely on the holder’s will and may not be imputed as a duty by his counterparty or another person”.

On these grounds, the court considers that the author’s only legal possibility is to “negotiate this explicitly at conclusion of the contract”. Thus copyright is reduced to a legal possibility and if the author fails to realise it, other legal entities are not obliged to comply with copyright at all. The court does not take into account this right’s absolute nature, which obliges all legal entities to comply with a certain behaviour as not to infringe copyright. The mandator is obliged to indicate the author in a suitable manner whenever the work is used, even in the absence of any agreement between the mandator and the author, and the author has no obligation to “negotiate this right explicitly at conclusion of the contract”. The court deems it necessary that the author negotiate the indication of his name in the created work with the mandator. The question remains regarding what would happen if the parties did not reach an agreement on the name indication matter, i.e. the author, party to the contract, did not manage to “explicitly negotiate it at conclusion of the contract”.

This legal misconception most likely arises from the revision of the content of Article 15, paragraph 4, item 4 of CNRA. The law states the following: “the author has the right to require”, from which the case-law concludes that the law does not provide a subjective absolute right, but a legal possibility for the author to require indication of his name on the works created by him. According to the court, the mandator may not be obliged to pay a compensation for not indicating the author’s name in any way when using the work, as this has not been explicitly required by the author, and “the defendant has not committed to such obligation”. With this argument, the court confirms its thesis that the right of paternity arises from such agreement between the parties, and the mandator must commit to the obligation to indicate the author’s name, and only in this case shall he be responsible for the work’s identification.

Our stance is that the author’s name may not be indicated only provided that the mandator announces to the author that his name will not be indicated when the work is communicated. In this case, the author