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A legislative proposal to amend the Copyright Law and possible change in computer program licensing rules in the Polish IT sector

On 20 June 2022, the Polish Ministry of Culture and National Heritage commenced public consultations on a proposal to amend the Copyright Law of 4 February 1994. The provisions being discussed are intended primarily to transpose Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC. Meanwhile, the proposed amendment also includes provisions that may change computer program licensing terms, and this could have significant implications for the Polish IT sector.

The amendment primarily concerns transposition of the above-described Copyright Directive. It requires major changes to Polish law with respect to use of works in the Digital Single Market. The key changes include for instance classification of online content-sharing service providers as entities that use content (including works) posted by their users, thus requiring them to obtain the relevant license. The resulting obligation for providers to monitor actively the content posted by users for potential copyright infringement is highly controversial. The amendment introduces a range of major changes concerning permissible use, and in particular broadens the scope within which academic or cultural institutions can make lawful use of copyright, for instance giving them the right to reproduce works for the purpose of automated data analysis, or for educational activity purposes.

At the same time, the proposal includes changes to special rules on computer programs. The proposal with the greatest implications is exclusion of applicability of article 68 of the Copyright Law to computer programs. Section 1 of this article provides for a presumption that a license is indefinite and a statutory notice period for canceling the license (one year effective at the end of the calendar year). Meanwhile, in section 2, it states that a license granted for more than five years is considered an indefinite license after that period.

The provision described above, in particular section 2, is highly controversial in Polish practice, primarily as it is grounds for the view that a license for a particular work, including a computer program, may only be granted long-term for five years. Once that period ends, the licensor can cancel the license. This rule considerably hinders license holders, as it poses a major risk for highly frequent granting of licenses for longer periods or even granting of perpetual licenses. This is because it is common for parties to wish for a concluded license agreement to resemble a single transaction in which the buyer acquires an indefinitely established right to use a particular computer program for a single fee to the extent agreed upon – this also directly affects the business terms of the agreement (for example establishing the value of a specific license). Currently, article 68 (2) of the Copyright Law presents a substantial risk for the buyer, which is that after the five-year period the licensor will be entitled to terminate the license agreement. Of course, in trading practice, a number of solutions have been devised to mitigate that risk, but this provision continues to pose a significant risk to licensees.

The provision in question, in the amendment to the Copyright Law, which states that the provision described above does not apply to computer programs, could change the circumstances of trading practice in the Polish IT sector. Importantly, it is difficult to assess definitively what effect the legislation in question will have, as it could cause further doubts as to the period for which a license can be granted, especially as exclusion of applicability also includes section 1 of that provision. At the same time, it is not definite that this change will be included in the final proposal for the amendment.

Many comments can still be expected during the legislative works, especially as exclusion of applicability of article 68 of the Copyright Law to computer programs could have far-reaching implications for parties trading in computer programs on the Polish market.