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What Rights Are Acquired When Commissioning Another to Create a Work?
According to Article 12, Paragraphs 1 and 2 of the Copyright Act: "Where a work is completed by a person under commission, except in the circumstances set out in the preceding article, such commissioned person is the author of the work; provided, where an agreement stipulates that the commissioning party is the author, such agreement shall govern. Where the commissioned person is the author pursuant to the provisions of the preceding paragraph, enjoyment of the economic rights to such work shall be assigned through contractual stipulation to either the commissioning party or the commissioned person. Where no stipulation regarding the enjoyment of economic rights has been made, the economic rights shall be enjoyed by the commissioned person." Paragraph 3 of the same Article further stipulates: "Where the economic rights are enjoyed by the commissioned person pursuant to the provisions of the preceding paragraph, the commissioning party may exploit the work." Accordingly, in commercial transactions, if the parties do not explicitly stipulate the ownership of copyright in an agreement, the economic rights to a commissioned work generally belong to the "commissioned person" (i.e., the creator). However, although the law grants the commissioning party the right to "exploit" the work, what exactly is the scope of this right? Can the commissioning party exploit the work for self-marketing, or even license it to a third party? The Intellectual Property and Commercial Court (hereinafter the "IPCC") expressed its view on this issue in Judgment No. 2025-Min-Zhu-Shang-Yi-10, rendered on June 5, 2026.
This case originated when the commissioning party, Company A, commissioned the commissioned party, Company B, to construct and install a curved LED wall. Company B also provided a 3D animated video for the said wall. Subsequently, acting as if it were the holder of the economic rights to the video in question, Company A entered into an advertising resource exchange agreement with a third-party company, providing the video to the third party for public broadcasting on an outdoor multimedia screen at another shopping plaza. Upon discovering this, Company B believed that Company A had committed copyright infringement and subsequently filed a lawsuit for damages.
Company A argued that, based on the rational and objective understanding of the general public and the purpose of the transaction, since it had provided the funding, it naturally bought out the video along with the TV wall in its entirety; therefore, the copyright should belong to the commissioning party. Taking a step back, even if it were conceded that the copyright belongs to the commissioned party (Company B), Company A, as the commissioning party, would still enjoy the right to exploit the video pursuant to Article 12, Paragraph 3 of the Copyright Act. Using the video to exchange advertising resources with another party for self-marketing should constitute lawful exploitation. Company B, on the other hand, contended that since the parties did not enter into any agreement on the ownership of copyright, it (as the commissioned person) should legally acquire the copyright. Furthermore, the originally agreed purpose between the parties was limited to broadcasting the video on the specific LED wall constructed by Company B. Company A's unauthorized provision of the video to a third party for broadcasting online and at other locations exceeded the scope of authorization and thus constituted infringement.
In the aforementioned Judgment No. 2025-Min-Zhu-Shang-Yi-10, the IPCC adopted the arguments of the commissioned party, Company B, ruling against Company A and holding it liable for damages. The Court explicitly pointed out: Where the economic rights belong to the commissioned person pursuant to Article 12, Paragraph 2 of the Copyright Act, the commissioning party may exploit the work, as expressly stipulated in Paragraph 3 of the same Article. The legislative intent is that "if the economic rights to a commissioned work belong to the commissioned person, since the purpose of the commissioning party's funding is usually to exploit the work completed by the commissioned person, Paragraph 3 is added to stipulate that where economic rights belong to the commissioned person according to Paragraph 2, the commissioning party may exploit the work." The provision that the commissioning party may exploit the commissioned work under this paragraph is based on the law. The scope of such exploitation shall be determined according to the purpose of the commissioning party's funding or the contract. Within this scope, acts such as reproduction, public broadcasting, public transmission, adaptation, distribution, and leasing are legally permissible (referencing the Supreme Court Civil Judgment N0. 2018-Tai-Shang-553). Moreover, the commissioning party merely acquires the right to exploit the work and is not the holder of the economic rights. Therefore, it is impermissible for the commissioning party to grant an exclusive license to a third party, or to act as the holder of the economic rights to enable a third party to reproduce, publicly broadcast, publicly transmit, adapt, distribute, or lease the work. The IPCC found that the initially agreed broadcasting platform between the parties was the specific LED wall constructed by Company B. Company A's act of providing the video to a third party for broadcasting on the advertising wall of another building, acting as if it were the copyright holder, did not fall within the scope of the original purpose of the commission. Therefore, it did not constitute lawful exploitation under Article 12, Paragraph 3 of the Copyright Act, leading to the conclusion that Company A had infringed upon Company B's copyright.
It is worth noting that Company A, the commissioning party in this case, argued that subjectively, because it participated in project discussions and provided the funding, it naturally believed itself to be the author, and thus lacked the "intent or negligence" required for copyright infringement. After reviewing the case, the Court held that Company A and Company B had neither entered into a written contract nor explicitly stipulated the ownership of copyright upon the completion of the video's production. Since Company A was the funding party, it ought to have exercised due care regarding this matter in a commercial transaction. However, it neglected this duty, subjectively assuming itself to be the author, and engaged in licensing acts that exceeded its own right of exploitation. Even if it lacked the intent to infringe, it could hardly be said to be without negligence. The Court ultimately ruled that Company A must bear liability for damages.