After years of public discussion and position papers, the Knesset – Israel's parliament – recently enacted the Copyright Act, 2007 (New Law), which will come into effect in May 2008. The New Law replaces the Copyright Act of 1911 that was passed by the British Parliament and made applicable to pre-state Israel during the British Mandate, as well as most of the provisions of the 1924 Copyright Ordinance (Old Law).

The New Law is an attempt to modernize Israeli copyright law in light of the technological advances of recent decades and to clarify the copyright regime in the country. While much can be written about the impact the New Law will have, certain changes from the Old Law are worth considering for entities hiring employees and engaging contractors on a work-for-hire basis in Israel.

Israeli law, like many copyright statutes, distinguishes between copyright ownership in the work product created in the context of an employment relationship and that created as a work for hire. The Old Law stipulated that in an employment situation, absent an agreement to the contrary, the employer is the first owner of the copyright in the work created by an employee. This basic arrangement is maintained in the New Law, although a qualifier has been introduced which states that in order for the employer to be entitled to the copyright in the work product of an employee, the work must be created for and in the course of his or her employment, a phrase that will most likely be subject to judicial review.

In terms of works for hire, the Old Law stipulated that, with a few notable exceptions and without an agreement to the contrary, the author of a work was the first owner of the copyright in it. During the years prior to the enactment of the New Law, it was proposed that, in recognition of the underlying economic rationale of the arrangement between the ordering party and the supplier, the ordering party be the owner of copyrights in work for hire absent an agreement to the contrary. After considerable public opposition, however, the New Law preserved the existing arrangement as stated in the Old Law but introduced a subtle change to the legal framework such that the "agreement to the contrary" may now be either explicit or implicit. This creates some ambiguity since it is not clear from the New Law what constitutes an "implicit" agreement, a question that will also probably be subject to judicial interpretation.

It should be noted that section 45 of the New Law states that the creator of an artistic work, a dramatic work, a musical work or a literary work other than a computer program, in which copyright resides, shall have the moral right in respect of such work during the copyright period. As such, the New Law clarifies that there is no moral right in a computer program, something that was previously ambiguous. The New Law provides further that the moral right is personal, may not be transferred and belongs to the creator of the work even after he or she no longer holds the copyright to the work.

As a result of the foregoing, it will become even more important than before for entities hiring employees and engaging contractors on a work-for-hire basis in Israel to ensure that copyright ownership in the work product created in such contexts transfers to the employer or ordering entity, as the case may be, pursuant to a clearly drafted agreement. This agreement should also include a waiver by the creator of the work of all applicable moral rights in it.

Daniel Green

Yigal Arnon & Co
22 Rivlin Street
Jerusalem 91000
Israel
Tel: +972 2 623 9200
Fax: +972 2 623 9236
barry@arnon.co.il
www.arnon.co.il