We are excited to welcome Mathilde Carle as a partner in Morgan Lewis’s Paris office and as a guest contributor to our Tech & Sourcing Spotlight series to discuss intellectual property (IP) protection and other related issues in agreements to design, build, license, host, and support digital solutions, including automation, AI, and software as a service (SaaS) products.
Mathilde is recognized as a leading IP and technology transactions lawyer in France, handling a wide range of matters spanning IP protection strategies to litigation before the specialized French and European jurisdictions and offices. Mathilde also frequently advises on issues involving information and technology, including drafting and negotiating technology-related contracts.
For companies entering into digital technologies agreements under French law, are there any unique terms that need to be considered in relation with the company’s IP or data used or processed leveraging such technologies?
French IP law is particularly protective of the rights of the individual that has created or developed any work eligible for copyright protection, such as software; this is notably why in France, as in most of continental Europe, we use the term “author’s rights” rather than copyright.
In particular, there is no concept similar to “work for hire,” which means that absent a specific clause defining the ownership of the IP rights, in most cases the IP rights would remain with the creator or developer. For example, a third-party contractor hired to develop software would retain the related copyright unless an assignment is specifically provided for in the contract and complies with the applicable rules, which are very strict.
Another rule that is specific to French law is the prohibition of perpetual commitments. Any “perpetual” obligation, such as a perpetual license, would be deemed to be of an indefinite duration, i.e., lasting for as long as the parties agree that it should last. Thus, any party could terminate such obligation or contract at any time provided that appropriate notice has been given.
Do you have any lessons learned for companies contracting under French law for digital implementation projects?
Companies contracting under French law should be mindful of how they terminate contracts. French law provides that contracts must not be “abruptly” terminated and that there is an adequate notice period. The period provided for in the contract may not be considered as sufficient by the judges and the terminating party may be condemned to pay damages to its former partner.
Another hot topic is the consideration paid to the party assigning or licensing IP rights. Recent cases have highlighted multiples risks for an IP assignment or license granted free of charge—it may be considered as a donation, that is both null and void unless drawn up before a notary and subject to taxation, or as an abnormal management act by the assignor/licensor depriving the company of its assets.
Are there any existing or pending French laws that impact the use or protection of data?
Data protection rules in France are mainly based on EU regulations or directives, and there is no shortage recent or pending legislations. The main rules relating to personal data are set out in the EU General Data Protection Regulation (GDPR) and the French Data protection law (Loi Informatique et Libertés), but there are several additional acts that would also apply to personal data and data in general, with a focus on AI and cyber resilience, such as the AI Act, the Data Act, DORA, NIS 2, or the Cyber Resilience Act in the EU.
Mathilde Carle boosts the international footprint of Morgan Lewis’s Technology Transactions, Outsourcing and Commercial Contracts practice by adding French law mastery and complementing the European coverage of our lawyers in our London, Frankfurt, Munich, and Belgium offices. Marie works with a wide range of France-based and global clients in structuring, negotiating, and governing digital, technology, and data agreements. Please reach out to Mathilde with any questions.