Service work and commissioned work in Ukraine

Whose logo is this – yours or the designer’s? Whose article is it – the journalist’s or the editor’s? In a world where content is created not only for entertainment, but also for money – in the office or freelancing – the question “who owns the copyright?” becomes critical. After all, as we know, many works are created not just for fun, but as part of a job ( work forhire) or to fulfil a specific task(work on order). And this is where the most interesting part comes in: how are the rights divided between the author-creator and the one who pays – the employer or the client?

Ukrainian legislation actually considers two main models:

• Service work: created by the employee within the framework of the labour contract. Here the employee ‘ s copyright and the employer’s copyright conflict (or coexist).
• Bespoke work: a work made by an independent author for a client under a contract of commission. Here we are talking about the rights of the author and the copyright of the client.

It is crucial to distinguish between these situations, because the rules of the game are different. And believe us, the lawyers of Polikarpov Law Firm, a well-written contract – be it a labour contract or an order – is the best investment to avoid future problems. It is this contract that basically determines who, how and on what terms can use the created object. In the following, we will detail both cases.

Section I. Work product: rights of the employee and the employer

So, let’s start with a situation that is perhaps the most common. Imagine this: you work in a company. A journalist, a programmer, a designer, a marketer – it doesn’t really matter what you are. The main thing is that you create something: texts, code, images, strategies. And you do it not in your free time for your own pleasure, but, so to speak, as part of your professional duties. This product of your intellectual labour is potentially what the legislator calls a work of service.

It would seem that everything is simple: if you work for a company, everything created belongs to it. But, you know, not everything is so unambiguous in the Ukrainian legal field. Here the interests of two parties collide: on the one hand – the employee, the direct creator, the author, who invested his knowledge, skills and creativity. On the other hand – the employer, who organised the process, provided resources (time, possibly equipment, tasks) and, finally, pays wages.

How does the law regulate this, we agree, delicate balance of rights? Who can use a work of authorship? Who owns non-property rights (the right to be called the author, for example)? And proprietary rights (the right to earn money from the work)? Does the employee have the right to additional remuneration other than salary? And what role does the employment contract play in all this?

These are the questions we will try to answer in the following subsections, laying it all out: from the definition of what constitutes an employment contract to practical advice on how to formalise the relationship. Let’s delve into the details.

Subsection 1.1: Definition of a work of service

So, what is it, this official work? Let’s get to the bottom of it. The Law of Ukraine “On Copyright and Related Rights” (we also abbreviate it as CLRA) gives us a clear definition. A work of service is, in fact, a work that the author (i.e. an employee) created not for nothing, but precisely in connection with the performance of his duties under a labour contract ( or contract). No more, no less.

It sounds simple, but, as they say, the devil is in the details. In order for a work to be considered a work of service, two key conditions must be fulfilled, two pillars on which everything rests:

1. The existence of an employment relationship: There must be an officially formalised employment agreement or contract between the author-creator(employee) and the person or company(employer). That is, the person must be on the staff, work according to the labour book (or its modern electronic analogue), obey the rules of internal labour regulations. A simple arrangement in words or a civil law agreement is a different story, which we will talk about later.
2. Creation of a work within the scope of job (work) duties: This is perhaps the most important and sometimes the most difficult point to prove. The work must be created not just during the working day, but precisely within the framework of those tasks and functions that are specified for the employee in his/her employment contract, job description or other internal documents of the employer. In other words, the creation of this type of work must fall within the scope of his or her employment duties.

Let’s use examples, it’s always clearer that way.

• An article written by a journalist who is officially employed by a newspaper or online publication? If writing articles is his or her direct duty, it is a classic work of service.
• Software code that an in-house programmer of an IT company develops for a new product of that company? Same thing – if software development is part of his/her employment duties, it is an official work.
• A design layout of an advertising banner created by a designer who works in the marketing department of a company under an employment contract? Again in the bull’s-eye – an official work.

But! And this “but” is very significant. Not everything an employee creates automatically becomes a work of service. Imagine that the same programmer writes poetry or runs a personal travel blog in his spare time. Does the employer have any rights to this? This is his personal creation, it has nothing to do with his work duties as a programmer. Therefore, remember: the criterion of connection with the performance of work under a labour contract is the key criterion for the recognition of a work as official. Without this connection, the work remains the author’s personal property.

Subsection 1.2: Non-Property Rights in a Work of Service

Okay, we’ve dealt with the definition. Now let’s talk about rights. And let’s start with that which is inalienable, which cannot be sold, transferred or, you know, just taken away. We are talking about the author’s non-property rights to a work of service. This is, in fact, the part of copyright that concerns the personality of the creator, his connection with his brainchild.

What is this beast – non-property rights? Well, imagine this: you have created something, invested your soul, knowledge, and time. Isn’t it important to you that everyone knows that you are the author? Or that your creation is not distorted beyond recognition, that your idea is not twisted? This is the heart of non-property rights. According to Ukrainian legislation, the author’s basic non-property rights include:

1. The right of authorship: This is the right to be recognised as the author of a work. It arises from the moment of creation and belongs only to the actual creator. It cannot be transferred to anyone – neither to an employer nor to anyone else.
2. Right to Name: This is the right to request that one’s name be mentioned in connection with the use of the work, if practicable. It also includes the right to forbid mention of one’s name if the author so wishes, or to choose a pseudonym. That is, it is up to the author-worker to decide whether his or her name appears under an article, in the credits of a programme or on a layout.
3. Right to inviolability of the work: This is the right to resist any distortion, mutilation or other alteration of the work, or any other attack on the work that may harm the honour and reputation of the author. An employer can, of course, adapt the work for its own needs (for example, editing an article or modifying code), but it may not do so in a way that disparages the author or distorts the original intent beyond recognition, especially if it harms the creator’s reputation.

Key point to remember: All these non-property rights (right to name, right to inviolability of the work, right of authorship) always and without exception belong to the author-worker. They are inalienable. This means that the author-employee cannot give them up, they cannot be transferred or sold to the employer under any conditions, even if the employment contract says something different (such a clause would simply be null and void from the point of view of the law). The employer can never say, “I am now the author of this code” or “We forbid mentioning the name of the designer of this logo.”

Why do we emphasise this so much? Because it is, believe our experience at Polikarpov Law Firm, one of the most common misunderstandings. Many people think that since a company “owns” a work, it can do absolutely anything with it, ignoring the identity of the creator. But it doesn’t. The personal non-property rights of the author-employee are his fortress, which the law protects very carefully. And both parties to a labour relationship should bear this in mind.

Subsection 1.3: Property rights in a work of authorship

Let’s move on to the more pragmatic part of the question – property rights in awork ofservice. If non-property rights concern the author’s personal connection with the work, then property rights are about economics: who has the right to use the work, distribute it, modify it for commercial purposes, receive income, and the like. And here the situation becomes much more variable than with non-property rights.

The Law of Ukraine “On Copyright and Related Rights” (CLRA) establishes a certain default rule. As a general rule, property rights toa service work belong jointly to its author (employee) and employer, unless otherwise provided by terms of the contract. Pay attention to the key phrase – “jointly owned”. What does this mean in practice?

“Co-ownership” of property rights provides that certain actions with a work, especially its use by third parties, require the consent of both co-owners – both the employee and the employer. For example:

• If an employer wants to grant a licence to another company to use software code created by an employee as a proprietary work, the employer will, as a general rule, need the employee‘s consent.
• Likewise, if an employee wants to publish an article he or she has written as a proprietary work somewhere outside the employer‘s publication, he or she will need the employer‘s permission.

This co-ownership regime may seem inconvenient for businesses that want to freely dispose of the work of their employees. This is where the second, extremely important part of the OAPS norm comes into play: “…unless otherwise established by contract“.

It is the labour contract (or contract, or a separate annex to it) that becomes the instrument that allows to regulate the distribution of rights differently than provided by law by default. In practice, in the vast majority of cases, employers seek to enshrine provisions in contracts according to which:

All property rights to official works created by the employee in connection with the performance of labour duties shall be transferred to the employer from the moment of creation of the work.

This wording (or its analogues) means that the employer becomes the sole owner of the property rights and gets the full right to use the work at its own discretion: modify, publish, sell licences, adapt – without having to obtain the consent of the employee each time. The employee, in turn, by transferring these rights, is usually compensated accordingly, as will be discussed below (payment of remuneration).

Therefore, the conclusion here is this: Although the law by default establishes joint ownership of property rights in a proprietarywork between the employee and the employer, it is the terms of the contract that determine the actual allocation of rights. The absence of clear provisions in the contract may lead to uncertainty and potential disputes over the right to use the work.

Subsection 1.4: Copyright remuneration for proprietary work: Is it included in wages?

So, we have learnt that the property rights to a proprietarywork can be transferred to the employer. The question logically arises: what does the employee-author receive in return, apart from, in fact, his basic salary? And here we come to the concept of copyright remuneration.

The law is clear: the author has the right to royalties for the use of his work. And service work is no exception here. That is, when an employer begins to use a service work created by an employee (for example, selling a programme, publishing an article, using a design in an advertisement), the author has the right to receive separate remuneration for this. It is important to understand: this right exists irrespective of the fact that theemployee has already received a salary for the very fact of performing his work.

But how are the amount of remuneration and the procedure for paymentdetermined ? Again, a contract – either a labour contract or a separate agreement between the employee and the employer plays a key role. It is in these documents that the parties must agree on:

• The amount of remuneration: This may be a fixed amount, a percentage of the income derived from the use of the work (royalty), or another form of compensation agreed upon by the parties.
• Payment procedure: When exactly the remuneration is paid – once, periodically (e.g., quarterly), after achieving certain indicators of the use of the work, etc.

Now the most slippery question: can salarybe considered the very copyright remuneration? Very often employers believe that salary covers everything, including the rights to the created works. However, court practice and the logic of the law itself tell us otherwise. As a general rule, salary is not considered to be copyright remuneration for the use of an official work. This is because a employee receives a salary for performing a labour function, for time and effort spent, while copyright remuneration is a payment for the transfer or granting of the right to use a specific result of intellectual activity, i.e. a work.

Is it still possible to “include” remuneration in the salary? Theoretically, yes, but this must be directly, clearly and unambiguously stated in the contract. For example, the contract may state that a part of salary (a specific amount or percentage) is to be paid specifically as royalties for the transfer of proprietary rights to proprietary works. It is important that such a structure is economically justified and does not look like an attempt to simply avoid paying the remuneration due. For example, if a programmer’s salary corresponds to the market salary only for performing work, it would be difficult to prove that it “automatically” includes remuneration for the transfer of rights to potentially very profitable code.

To summarise:An employee has a right to copyright remuneration for an official work. It arises when the employer uses the work. Its amount and the procedure for payment are determined by the contract. Salary is not in itself such remuneration, unless it is expressly regulated and justified in the contractual terms and conditions. Ambiguity in this matter is a direct path to misunderstandings and disputes.

Subsection 1.5: The Importance of Clear Provisions in Employment Contracts: Preventing Problems in Advance

Well, we’ve covered the key aspects: what is a work of authorship, who owns non-property rights, how property rights are allocated by default, and what about royalties. And you’ve probably already noticed the red thread that runs through all these issues: contract, contract, and contract again! It is the employment contract (or contract, or annexes to it) that is the foundation on which civilised relations between the employee and the employer in the field of intellectual property are built.

Relying on general rules of law, you know, is like walking on thin ice. Yes, the law establishes basic rules (joint ownership of property rights, the right to remuneration), but these rules often do not suit the business and may not be fully clear to the employee. And what is not clear is potentially conflicting. That is why we, the lawyers of Polikarpov Law Firm, never tire of repeating: detailed and clear copyright provisions in an employment contract are the best prevention of future disputes.

What exactly should you pay attention to? What items should be spelled out “ironclad”? Here’s a quick checklist:

1. Clear allocation of property rights: This is perhaps the most important. It is not enough to simply write “rights belong to the employer”. It should be clearly stated that all intellectual property rights (list them or refer to the relevant articles of the FLSA) for official works created by the employee in the performance of labour duties are transferred (alienated) in full to the employer from the moment of their creation. Or, if the arrangements are different (e.g. joint ownership or transfer of only part of the rights), this should also be detailed.
2. Terms and amount of royalties:As we have already learnt, this is a separate topic. The contract should clearly specify:
   • Is there a separate remuneration for the transfer of rights?
   • If so, how is it calculated (fixed amount, royalty, etc.)?
   • What is the procedure and terms for its payment?
   • If the parties have agreed that remuneration is somehow included in the salary, this should be formulated as transparently, reasonably and unambiguously as possible, specifying which part of the salary is such remuneration. Mere silence or general phrases here do not work in favour of avoiding disputes.
3. How the work is to be used (optional but desirable): While a complete transfer of proprietary rights usually gives the employer discretion, it is sometimes advisable to spell out certain aspects of use. For example, can the employee use fragments of the work in his or her own portfolio (subject to confidentiality, of course)? These are little things that also help to avoid misunderstandings.
4. Territory and term of the rights (if not a full transfer): If the rights are not fully transferred but, for example, in the form of a licence, it is important to clearly define the territory and term for which the right to use is granted.

Our recommendations:

• Employers: Don’t skimp on a quality employment contract. Invest time and resources in developing clear copyright provisions that meet your business needs and legal requirements, especially on the allocation of rights and remuneration. This will protect you from future claims.
• Employees: Read the employment contract carefully before signing it. Pay special attention to the sections on intellectual property. If you are unclear about the allocation of rights or remuneration, do not hesitate to ask your employer or seek legal advice. Your rights must be protected.

Remember: a well thought-out and clearly defined employment contract is not just a piece of paper, it is a tool that helps to establish transparent rules of the game, prevent conflicts and ensure normal co-operation where everyone understands their rights and obligations.

Section II. Custom writing

Now let’s shift the emphasis. What if the work is created not by an in-house employee, but by an independent specialist – a freelancer, designer, copywriter, programmer – whom you have hired for a specific project? Here we are no longer talking about service work, but about work to order. The main difference is that there are no labour relations, only a civil law contract, namely a contractofcommission.

There are two parties: the author (the creator) and the customer (the one who ordered and pays). And the key question remains: who owns the rights to the result? Which rights inherently remain with theauthor , and which – and how – are transferred to the customer?

In this situation, thecontract of order acquires even more weight than the labourcontract. It is, in fact, it becomes the main law governing the relationship between the author and the customer regarding the work created. Let’s understand the nuances of this type of co-operation in order to understand how to put everything on paper correctly and avoid misunderstandings.

Subsection 2.1: Definition of customised work: When freelancing becomes official

So, what is custom work from a legal perspective? It is not just some work done out of state. Ukrainian legislation, in particular the Civil Code and the Law “On Copyright and Related Rights”, gives us a fairly clear understanding. A customised work is such an object of copyright (an article, design, photograph, software module, music track – whatever), which is specially created by the author (a natural person who makes it by his creative labour or a FOP) on the order of another person (customer). And all this action takes place not as it happens, but on the basis of civil law contract, which is most often so called – the contractof order (or the contract on creation of work byorder, contract of contract, etc.). – the essence is not in the name, but in the relationship).

The key difference, which should be fixed at once, so as not to confuse it with a work of service, is the complete absence of labour relations. There is no place for the Labour Code, employment orders or labour records. The author is not a subordinate of the customer, he is an independent contractor, a counterparty. Their relations are regulated exclusively by the terms of thecivil law contract concluded . The customer sets a task, the author fulfils it, gets paid – full stop. There are usually no social guarantees, holidays or obedience to internal regulations (and there shouldn’t be!).

Let’s go through the examples again to make the picture clearer:

• Logo for a new coffee shop: The owner of a coffee shop(customer) approaches a freelance designer(author), concludes an order contract with him to design a logo. The result is a custom piece of work.
• A series of articles for a corporate blog: A company(customer) hires a copywriter(author) to write 5 articles on a certain topic. They sign a civil law contract. Written articles – customised work.
• Musical accompaniment for an advertising clip: An advertising agency(customer) orders a composer(author) to write original music. An order contract is concluded. The music created is a custom piece of music .
• Photographs for a product catalogue: A furniture manufacturer(customer) hires a photographer(author) to take photographs of its products. Their relationship is formalised by an order contract. The photographs taken are a customised work of art.

As you can see, there are many scenarios, but the essence is the same: there is a specific assignment from the customer, there is an author-executor outside the labour relationship, and there is a civil law contract (contract of order) that fixes their agreements. It is such a work that would be considered commissioned.

Subsection 2.2: Non-property rights in commissioned work

Now let’s talk again about something that is neither sold nor transferred – non-proprietary rights. When it comes to commissioned work, does anything change here compared to a work of service? In short, almost nothing. As they say, stability is a sign of excellence, i.e. of legislation in this aspect.

The fundamental principle remains inviolable: personal non-property rights to a work created by order also belong to the author (creator) and are inalienable. This is his creative trace, his personal connection with the creation, which cannot be broken by any order contract. Even if customer paid a lot of money and received all property rights (about this – further on), he does not become an author. The author’s right to be recognised as the creator is sacred.

Let us recall again these key non-property rights:

• Copyright: No one but the actual creator can be called the author. Point.
• Right to name: The author decides for himself whether his name (or pseudonym) will be mentioned in the use of the work, or whether he wishes to remain anonymous. The client may, of course, ask in the contract for a certain format of mention or, on the contrary, for its absence (if the author agrees), but the right to the name itself remains with the author.
• Right to inviolability of the work: The author has the right to protest against changes that distort his work or damage his reputation. Of course, certain adaptations(the customer may crop a photo or translate text) are usually permissible, but gross interference that distorts the essence is a violation of the right to inviolability.

It is worth making a small remark here. The law contains a phrase such as “unless otherwise provided for in the contract” and for non-property rights. However, the legal community and court practice agree that it is impossible to completely waive non-property rights or transfer them to someone else. This contradicts the very nature of these rights as personal rights. A contract may, for example, regulate the way of realising the right to a name (say, agree not to put the name on the cover, but to put it in the output data) or allow the customer to make certain modifications (which do not violate the right to inviolability). But the very existence of these rights in the author is beyond question.

Example: A freelance designer has created a wonderful website for company X. Company X has paid for the work in full and received all the property rights under the contract. She can do whatever she wants with the site – change texts, add sections. But! The designer remains the author of the design forever. And unless explicitly agreed otherwise in the contract (for example, anonymity), he can demand that his name be listed somewhere in the “basement” of the site as the developer of the design. The customer cannot simply take and attribute the authorship of the design to his in-house programmer or anyone else at all.

Therefore, the conclusion is simple: non-property rights are something that remains with the author, regardless of whether he or she works in-house or does custom work. And customers should remember this and respect the author‘ s right.

Subsection 2.3: Property rights to a work made to order

So we’ve come to the most interesting and, frankly, the most important issue for business – property rights to a work made to order. That is, who can actually use the created logo, article or programme, make a profit from it, allow or prohibit the use of others? And here, although the situation has some similarities with a work for hire according to the letter of the law, in practice it unfolds quite differently.

The law (the same LPC) again establishes a default rule: property rights to a work created under a contract for hire shallbe jointly owned by the author and the customer, unless otherwise provided by the contract. “Jointly” again, you may say? Yes, formally, it is. But! And this “but” here is simply gigantic, fundamental. In contrast to works for hire, where joint ownership is the starting point, which often persists if the contract is silent, in the case ofa work for hire, it is the contract for hire that becomes the alpha and omega, and almost always establishes a different regime of distribution of rights.

Why is this so? Because customer, investing money in the creation of a specific work for their needs, usually seeks to gain maximum control over the result. They don’t want a situation where, for every step – placing a logo on a new product, translating an article into another language, issuinga licence to a partner – they have to run to the author for consent . Therefore, in practice, the following happens:

The vast majority of ordering agreements provide for the full transfer (alienation) of all property rights to the created work from the author to the customer after its creation and/or full payment.

What does this “full transfer of rights” mean? It means that the customer becomes the sole owner of the property rights. He can do whatever he wants with the work (within the law, of course, and respecting the moral rights ofthe author):

• Use it in any way.
• Change, modify, adapt.
• Allow use by others (grant licences) .
• Prohibit use by others.
• Transfer (sell) these rights further.

The author, in turn, having received remuneration under the commissioning agreement, “quits the game” with respect to property rights ( but remember his moral rights!).

However, the full transfer of rights is not the only possible option for the distribution of rights that can be fixed in the order agreement. Although it is the most common. Other models are also available:

1. 1. Joint ownership: The parties may agree to leave the joint ownership regime as the default by law. But, as we have already mentioned, this is rare, because it is often impractical for the of the customer. This model may make sense if the author and the client plan to develop or promote the work together.
   2. Granting a licences: The authormay not transfer the rights in full, but grant to the customerpermission to use a work under certain conditions is a licence. It can be:
      • Exclusive: The customer is the only one who can use the work in a certain way (even the author himself cannot, if it is provided for).
      • Non-exclusive: The author may grant similar licences to other persons.
      • Limited to the territory, term, and methods of use.
        For example, a photographer may grant a customer a non-exclusive licence to use a photo only in online publications for a year. At the same time, property rights remain with the photographer (author ).

In the author-customer relationship, it is the order agreementthat determines the fate of property rights. Although the law speaks of joint ownership by default, in practice, there is almost always either a full transfer of rights to the customer or a licence. Therefore, it is crucial to clearly and unambiguously set out in the contract what exactly the scope of rights is transferred and on what terms, in order to avoid any doubts or disputes in the future.

Subsection 2.4: Copyright remuneration for commissioned work

It is logical that the author should receive money for creating a customised work and, as we have found out, usually also for transferring the property rights to it. This is the author’s remuneration. But how is it determined in the case of an order contract? Here, on the one hand, everything is simpler, but on the other hand, again, it depends on how the parties have agreed.

As a general rule, the amount and procedure of payment of royalties for the creation and/or transfer of rights to a customised work are determined by the terms of the order contract itself . There are no statutory minimum rates or tariffs (unless we are talking about specific cases related to collective management organisations, but that is a separate story). The parties – the author and the client – have complete freedom to agree on an amount that will suit both of them.

And here is an important practical point: as a rule, the author‘s remuneration in the case of customised work is the price of the contract itself . That is, the amount that the customer undertakes to pay the author for the performance of work (logo creation, text writing, code development), usually already includes a fee not only for the creative process itself(payment for the work), but also for the transfer of property rights, if such transfer is provided for in the contract (which, as we remember, is almost always provided for).

In other words, when the author and the customer agree, say, 10 000 hryvnia for the development of site design with full transfer of rights, these 10 000 hryvnia and is the very complex copyright remuneration. It covers both the author’s efforts to create the design, and his agreement that the customer will become the full owner of the property rights to this design.

Are other options possible? Theoretically, yes. An order contract may, for example, provide for:

• A separate sum for the fact of creating the work itself(payment for the work ).
• A separate sum (or royalty – a percentage of use) exactly as copyright remuneration for the transfer of rights or the granting of a licence.

But in practice, especially when working with freelancers on typical tasks (logos, texts, small software solutions), the model of a single contract price is most often used.

It is also important to distinguish between the price of the contract (one-time or phased payment for the creation and transfer of rights) and possible additional remuneration for certain uses (royalties). If the parties want to agree that the author, in addition to a fixed amount for the creation, will receive, for example, a percentage of the sales of the book for which he created the illustrations, or a percentage of the circulation of the music track, this should be very clearly and in detail specified in the contract of order. If the contract provides for the full transfer of rights for a fixed price, then by default no further royalties are due to the author, even if the work becomes a super-success and brings the customer millions.

The royalty for a customised work is what the author and the customer agree on in the commissioning agreement. Most often it is a fixed contract price that covers both the creation and the transfer of rights. If more complex payment schemes or royalties are envisaged, they should be detailed as much as possible in the text of the agreement.

Subsection 2.5: The importance of a detailed order contract

If, after reading the previous subsections, you still have any doubts about the role of the contract of order in the relationship between author and client, let us dispel them for good. In the situation with a work toorder, a detailed contract of order is not just a desirable formality, it is an absolute necessity, it is the alpha and omega of your legal guarantees. Why so categorical? Because, unlike labour relations, where there is at least some basic regulation by the Labour Code, here – in the sphere of civil law agreements – it is the contract becomes the main, and often the only document that defines the rights and obligations of the parties in relation to the created work.

Ignoring this fact, relying on oral agreements or using template contracts “from the Internet” without proper adaptation is, without exaggeration, a game of Russian roulette. The consequences can be dire: from the impossibility for the customer to fully use the work for which he paid, to claims from the author for additional remuneration or infringement of his rights, up to court proceedings.

To avoid this, the order contract should be as clear, detailed and unambiguous as possible. So what are the key points that must necessarily be spelt out in it? Here is a kind of check-list from the lawyers of Polikarpov Law Firm:

1. Subject of the contract: Not just “design development” but a clear definition of what is being created. For example: “Development of logo design for the company [Name] in three variants according to the Terms of Reference (Appendix #1), with final approval of one variant by the Customer”. The more detailed the expected result is described, the less room for disagreement as to whether the author has fulfilled his task.
2. Scope of rights tobe transferred/granted:This is the heart of the contract in the context of intellectual property. It should be clearly stated:
   • Is there a complete transfer ( alienation ) of all property rights from the author to the customer? (The most frequent variant).
   • Is a licence granted ? If yes, what kind of licence: exclusive or non-exclusive?
   • What kinds of use are allowed (it is desirable to list them or give a reference to the rules of law).
   • From what moment do the rights pass (for example, from the moment of signing the act of acceptance of the work and/or full payment)

   ?

3. Territory of validity of rights: If the rights are not transferred for the whole world (which is typical for complete alienation), but are limited to a certain territory (e.g. Ukraine only), this should be clearly stated.
4. Term of rights: Again, in a complete alienation, the rights are transferred for the entire term of copyright protection. But if a licence is granted, its term (one year, five years, indefinitely) should be clearly defined.
5. RemunerationAuthor:
   • Exact amount of remuneration and currency of payment.
   • The payment procedure (prepayment, payment upon payment, payment in instalments).
   • A clear indication that this remuneration includes a fee for the transfer of property rights (if so).
   • If royalties are envisaged, a detailed mechanism for their calculation and payment.
6. Liability of the parties: What happens if the author fails to deliver the work on time or of poor quality? What if the customer doesn’t pay? What are the penalties? Who is liable if a work infringes the rights of third parties (e.g., contains plagiarism)? These are important safeguards.
7. Procedure for acceptance-transfer of the work: How the fact of work performance and its compliance with the requirements are recorded (acts, deadlines for inspection and comments).
8. Author’s guarantees: Usually the author guarantees that the work is original, created by his labour and does not violate the rights of third parties.

Of course, this is not an exhaustive list, each order contract should take into account the specifics of a particular task. But these points are the minimum that will help you avoid 90% of potential problems. Remember: time spent on agreeing and carefully drafting the terms of the contract is an investment in your peace of mind and legal security. If you are not sure about the wording, it is better to turn to specialists.

Section III. Comparative Chart: Service Work vs. Commissioned Work

To better understand the key differences and some commonalities between a service work and a commissioned work, we have prepared for you a visual comparison in the form of a table. It will help you quickly orientate yourself in the main points that we have discussed in detail above.

This table summarises the main points of comparison. As you can see, while certain basic principles (e.g. co-ownership of non-proprietary rights by the author) are the same, the key aspects, especially with regard to property rights and remuneration, differ significantly depending on whether it is a proprietary work or a commissionedwork, as well as on the terms of the particular contract.

Section IV. Recommendations and common mistakes: How not to step on the rake in copyright issues

Here we have learnt the theory – service works, customised works, proprietary and non-property rights, remuneration…. Everything seems logical. But, as they say, all is smooth on paper, but they forgot about the ravines. In practice, believe the experience of Polikarpov Law Firm, it is in these matters that there are many pitfalls, typical mistakes and misunderstandings, which then result in lengthy disputes, financial losses and spoilt relationships. Therefore, this section is about practice, about how to do must, and what you should not do . Our tips and recommendations are for everyone: authors, employers, freelancers, and customers.

Most Common Mistakes:

1. Lack of a written contract: This is perhaps the champion among mistakes. Verbal agreements? They’re worthless when it comes down to it. A template contract from the first website you come across that isn’t tailored to your situation? Also a bad idea. Consequences? Total legal uncertainty. Who owns the rights? On what terms? Was there remuneration? It is extremely difficult, and sometimes even impossible, to prove something in court(court practice here is inexorable) without proper contractual regulation. This is a direct way to a situation where the customer cannot use the work, and the author cannot get paid or protect his interests.
2. Vague wording about the transfer of rights: “All rights are transferred” sounds good, but what exactly is meant? What rights? Property rights? Non-property (which is not possible)? For how long? For what territory? This is especially critical for an order contract. If the scope of the rights to be transferred is not clearly defined, there is a risk that the customer will not receive exactly what he had hoped for. Or the employer forgets to clearly specify the transfer (alienation) of property rights in the labour contract, limiting himself to general phrases. The result is disputes about who can use the work and how.
3. Ignoring the author’s non-proprietary rights: Many people (especially employers and clients) forget that the author always remains the author, has the right to the name and inviolability of the work. Attempting to attribute authorship to someone else, using a work without naming the author (unless otherwise agreed) or distorting the work beyond recognition is an infringement that can lead to very real legal action for protection of rights.
4. Confusion over royalties: Particularly relevant to works ofauthorship. The assumption that the salary automatically covers also the remuneration for the transfer of rights is a very risky assumption, unless it is explicitly stated in the contract. For commissioned works, the problem may be that the amount, payment procedure or royalty terms (if any) are not clearly defined. The consequence is financial claims, non-payment of amounts due, and the author’s reluctance to hand over the result of the work until full payment is made.

Practical recommendations for all parties:

• For authors (employees and freelancers):
  • Read what you sign! Carefully study the terms and conditions of the employment or commissioning agreement, especially the clauses on intellectual property, distribution of rights and remuneration.
  • Don’t be afraid to ask questions: if something is unclear, ask the employer/customer. If in doubt, seek legal advice before signing. This is your defence of your rights.
  • If there are terms of reference (TOR), correspondence where details are discussed, keep these. This can become evidence in case of a dispute.
  • Know your non-property rights- Remember that copyright, naming rights and the integrity of the work are yours by default.
• For employers:
  • Develop a quality employment contract. Don’t rely on standard templates. Engage lawyers to create clear copyright provisions that unambiguously regulate the transfer of proprietary rights to proprietary works and remuneration issues.
  • It is desirable to have evidence that a particular work was created specifically as part of the performance of labour duties (memos, orders, TORs).
  • Respect the non-property rights of employees.
• For customers:
  • Always enter into a written order contract. Detailed and specific.
  • Clearly define the subject of the contract and the requirements for the work (ToR).
  • Be as precise as possible about the scope of therights to be transferred. Full alienation? Exclusive or non-exclusive licence? Territory? Term? The manner of use? Leave no room for interpretation.
  • Detail the terms of payment (remuneration): amount, terms, stages, connection of payment with the transfer of rights.
  • Keep all documents: contract, TOR, acceptance certificates, correspondence. This is your evidence in case of anything.

The best way to avoid mistakes and disputes is prevention. Quality contractual regulation, i.e. a well thought out and drafted contract, is 90% of success in ensuring that the rights of all parties are protected. Do not skimp on this. If complex issues arise or you work with particularly valuable intellectual property, do not hesitate to seek professional legal assistance. It is better to spend a little time and money on consultation and preparation of documents now than to spend much more on problem solving and litigation later.

Conclusions

Summarising our conversation about service works and works toorder in Ukraine, the main conclusion is obvious: the fate of copyright ( especially proprietary rights ) is decided not so much by the default law as by the terms of your contract.

Remember the basics:

• Non-property rights (to be the author, the right to a name) are always with the author.
• Property rights (use, income) – as specified in the contract (labour or contract). It is the contract that determines the allocation of rights, usually transferring them to the employer/customer.
• A clear contract is the best way to avoid conflicts. The importance of details cannot be underestimated.

Both creators and businesses need to understand these nuances. Therefore, as lawyers at Polikarpov Law Firm, we advise: always enter into detailed written agreements and, if necessary, seek specialist advice.

These were the key points regarding service works and customised works. If you want to understand even deeper the general principles of protection of creative results in our country, we at Polikarpov Law Firm have prepared comprehensive material for you. Check out our full guide – there is even more useful information on how copyright law works in Ukraine: Copyright Law in Ukraine: full guide