Who polluted my IP, or: Am I the master of my domain?

Who polluted my IP, or: Am I the master of my domain?

Doron Afik, Esq.
November 21, 2022

A company hires the services of a website builder to build a sales website for it and even pays him a monthly amount to maintain the website. At some point, it decides to change service providers, but the provider contends that the site belongs to him and the company cannot use it, or even set up another site that looks the same. Can this be?

If this sounds to you like a strange story, that is exactly the case decided by the Court in Haifa in June, 2018, who determined that the website service provider is the owner of the website for which he received a monthly retainer and the company is not allowed to use the website or a website that looks like it. In that case, the service provider set up the website and registered the domain in his name. As part of the agreement between the parties (which was not really an agreement but merely a price offer and payment made) it was not agreed that the supplier would build the website for the company or that ownership thereof would be transferred to the company, but only the provision of services was discussed. The company did transfer content to the supplier and he uploaded it to the website, but the Court found that the supplier does not own the copyright of the content provided to him by the company, but this does not raise or lower the issue of copyright on the website itself, which belongs to the supplier. In other words, the intellectual property of the company does not rally belong to it in full and was “polluted” by intellectual property of another.

The Israeli copyright law states that the creator is the first owner of the copyright in the work, even if it was created by order, unless otherwise agreed between the orderer and the creator, explicitly or implicitly. The law also requires that an agreement to transfer copyright be in writing. Thus, is there was no written agreement between the service provider and the client stating that the rights on the site belong to the client, the client is left with a site that does not belong to it at all - the meaning of this is expenses but also decrease in value.

In another case, which was decided in the Tel Aviv court in April, 2017,(an appeal to the Supreme Court was rejected in June, 2019) the question arose as to who owns an online store on a site for selling jewelry? Is it to a jewelry designer whose designs are sold in the store - or to a salesman who managed the store for her? In that case too there was only a verbal agreement according to which the salesperson would establish a new online store and there the salesperson raised the same contentions regarding the initial copyright belonging to him, and the absence of a written agreement for the transfer of rights. However, in that case the Court found that in order to create a copyright a certain degree of creativity is required and it is not a website but an online store within an existing platform (the ETSY website) that provides the store's operating system and even the design. In fact, the salesperson received a built-in format of an online store, and uploaded the jewelry photos to it, where the store is identical to other stores on the site. Thus, neither the jewelry designer, nor the salesperson have copyright in the store, even though the salesperson managed it for several years, but the rights belong to the store platform provider.

The necessary conclusion is clear, copyright is a complex issue and it is important to be accompanied by a lawyer with a background in the field when contracting with a content or service provider that ultimately creates the intellectual property of the business. Improper management of the intellectual property may create a situation where in the end the intellectual property of the business does not exist at all, or exists but belongs fully or partially to another - whether that person is an employee of the business (with whom the contract was made without proper legal guidance) or an external service provider.