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Does the Commissioning Party Have the Right to Exploit the Commissioned Work If Payment Is Not Made to the Commissioned Person?



Paragraph 2, Article 12 of the Copyright Act of Taiwan stipulates that "[W]here the commissioned person is the author, enjoyment of the economic rights to such work shall be assigned through contractual agreement to either the commissioning party or the commissioned person.  Where no agreement 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 that "[W]here the economic rights are enjoyed by the commissioned person pursuant to the provisions of the preceding paragraph, the commissioning party may exploit the work."  This means that when a work is commissioned to be completed by a person, if there is no agreement regarding the enjoyment of economic rights, the commissioned person shall enjoy the economic rights, and the commissioning party shall be entitled to exploit such work.  The legal issue to be considered here is: In the event that no payment of remuneration is made by the commissioning party for any reason, may the commissioned person, while making defense of the claim for such event, request the suspension of the right of exploitation of the work until the commissioning party performs its payment obligation?
 
The 2018 Min-Zhu-Su-Zi No. 13 judgment rendered by the Intellectual Property Court in November 2018 seemed to answer "no" to this issue.  In this case, the plaintiff was commissioned by the defendant to write a book, but the defendant was dissatisfied with the contents of the manuscript drafted by the plaintiff, and refused to pay the agreed remuneration in full.  The draft was further revised and published by the defendant.  The plaintiff in turn initiated a civil action against the defendant for the infringement of her copyright, and sought compensation for the damages.  The Intellectual Property Court recited the Supreme Court's Tai-Shang-Zi No. 1895 Civil Judgment, which expressed that "[s]ince the statutory right of exploitation of the commissioning party and the agreed remuneration of the work are not governed by the performance of counter-prestation, there are no grounds for a civil action on the failure of the reciprocal performance of one to another," and thus held that "[T]he enjoyment of the right of exploitation by the commissioning party was rendered upon the stipulation of the law, not of the mutual agreement between the contracting parties; the law does not forbid the defendant's exploitation of such work."  The Intellectual Property Court considered that even though the defendant did not pay the agreed remuneration in full, this did not affect his right of exploitation regarding the said manuscript.  Additionally, the defendant, being the commissioning party, had not infringed on the copyright of such work out of intention or negligence.  Therefore, the Court found no infringement on the plaintiff's copyright.
 
It is doubtful whether the above rulings interpreting Paragraph 3, Article 12 of the Copyright Act as legally enabling a commissioning party who has not paid the agreed remuneration to exploit commissioned work are appropriate or not. In the 2017 Min-Zhu-Shang-Yi-Zi No. 6 Civil Ruling made by the Intellectual Property Court in June 2018 regarding the continued exploitation of work by a commissioning party who had not paid the remuneration as agreed, the Court held that the commissioned person may, pursuant to provisions of Article 254 of the Civil Code, establish a reasonable period and notify the commissioning party to perform and pay the agreed remuneration within such period.  The commissioned person may rescind the contract if the commissioning party does not perform its obligations within such period.  Once the contract is rescinded, the commission relationship between both parties no longer exists.  The former commissioning party shall have no claim over the right of exploitation, and shall be regarded as infringing on the copyright of such work if exploitation is not stopped.  This can be provided as an alternative argument.
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