For technology companies, the allocation of intellectual property rights is one of the central legal aspects when engaging IT specialists.
In Ukraine, intellectual property rights to many products created within IT projects (in particular, original computer code, databases, programmes, graphic elements, etc.) are protected by copyright law.
Copyright arises automatically from the moment the work is created. Registration is not required for copyright protection to exist.
Under Ukrainian law, copyright consists of moral rights and economic rights.
Moral rights belong exclusively to the author, i.e. an individual who created the work through their creative activity. These rights cannot be assigned or transferred, nor do they pass by inheritance.
Moral rights include the right to:
- be recognized as the author (or remain anonymous)
- use a real name or pseudonym
- preserve the integrity of the work and prevent unauthorized modifications
- decide on the title or dedication of the work
Unlike moral rights, economic rights may belong not only to the author, but also to other individuals or legal entities to whom such rights have been transferred by agreement or by operation of law.
Basically, economic rights allow the rights holder to:
- use the work (e.g. reproduce, distribute, adapt, translate)
- permit use by others (e.g. within the license agreement)
- prohibit use by others
Economic rights may also be transferred (alienated) in full or in part to other individuals or legal entities.
Within employment relationships, economic rights to works created in the course of employment are generally transferred by default in the full scope to the employer from the moment of creation, unless otherwise agreed.
Employees are entitled to remuneration for such transfer, although compensation may be included in salary if creation of works forms part of the employee’s duties.
The employer may also authorize another person to complete, modify, or supplement the work created in the course of employment unless the parties agree otherwise.
At the same time, as was stressed above, moral rights remain with the employee-author.
A similar approach applies to works created under gig contracts within the Diia City regime. Moral rights remain with the gig specialist, while economic rights by default belong to the Diia City resident commissioning the work, unless the parties agree otherwise.
For works commissioned from contractors outside the Diia City gig contract model, the result is broadly similar: moral rights remain with the author, while economic rights generally transfer to the customer from the moment of creation, unless otherwise agreed.
In practice, proper allocation of economic rights is one of the most important aspects of intellectual property structuring. It ensures not only lawful ownership of intellectual property, but also creates a proper legal basis for further assignment, licensing, or transfer of rights to third parties, including clients.
Nevertheless, the statutory default rules should not be treated as a substitute for contractual regulation. Given certain practical uncertainties and the fact that the parties may agree otherwise in many cases, agreements with IT specialists should expressly regulate the allocation of economic rights. This helps confirm the full chain of rights – especially where rights are further transferred to end clients.
