Protecting IP when hiring in the Czech Republic

Absent an agreement to the contrary, the employer exercises the economic rights, the majetková práva, in its own name and on its own account. That is § 58 odst. 1 autorského zákona, zákon č. 121/2000 Sb., and it applies to works the author created in order to fulfil obligations arising from an employment or service relationship. The Czech term for such a work is zaměstnanecké dílo.

Two distinctions do real work here. The first is that the employer exercises the economic rights rather than becoming the author: authorship itself does not move. The second is that the trigger is the employment obligation, not the employer’s premises or equipment. A work created by an employee in fulfilment of their job duties is caught. A novel written at the weekend by the same person is not.

Moral rights, osobnostní práva, stay with the author. What § 58 odst. 4 does instead is supply a set of presumptions that make the economic rights usable: where the employer exercises them, the author is presumed to have consented to publication, to modification and adaptation including translation, to combination with other works, to inclusion in a collective work, and to the employer presenting the work to the public under the employer’s own name. Section 58 odst. 5 adds a presumed consent to the employer finishing an incomplete work if the relationship ends first, or if there is reasonable concern the author will not finish it properly or on time.

These rights and duties survive the end of the employment relationship under § 58 odst. 8, so nothing evaporates on the last day. The consolidated text of the act is published at Zákony pro lidi.

Because § 58 odst. 7 extends the employee-work treatment to computer programs, databases and non-collective cartographic works even when they are created to order, with the commissioning party then treated as the employer. For software, the Czech default is unusually favourable to the company paying for the work.

It goes further than that. Section 58 odst. 6 gives an author a right to reasonable additional remuneration where their pay becomes manifestly disproportionate to the profit the employer makes from exploiting the work, absent agreement to the contrary. That claim is expressly switched off for computer programs, databases and cartographic works unless the parties agree otherwise. A company hiring Czech developers is therefore buying into a regime where the code is exercisable by the employer by default and no statutory upside claim sits behind it.

Section 58 odst. 10 rounds the picture out: works created by members of a legal person’s statutory or other elected or appointed body are treated the same way, with the legal person as employer. That covers the case of a founder or director who writes code themselves in the early months and then wonders, three years later, where the rights sit.

The drafting point is a small one. The statute yields to an agreement to the contrary, so a badly drafted clause can take away what the default already gave you. Plenty of the contracts we see have imported an IP clause from another country that reads as though the author retains everything unless a separate assignment is signed. Read the clause before you add it.

The employer may assign its right of exercise to a third party only with the author’s consent, and that catches transactions rather than day-to-day work. The exception is a transfer of a business, a závod, where no consent is needed. Where consent is given, it is presumed irrevocable and to extend to all further assignments. All of that is in § 58 odst. 1.

The cases that matter are an asset transfer, an intra-group move of a product line into a different entity, and a sale of a single codebase rather than the business around it. None of those is automatically a transfer of the závod, so each can need the author’s consent, which is a hard conversation to have for the first time inside a transaction timetable. Collecting it early and in writing is the cheap version of this problem.

Agency employment has its own rule, and it runs the way most people would guess but few check. Under § 58 odst. 9, where an employee is assigned to a user company, the user employer is treated as the employer for the purposes of the employee-work regime, unless the agency and the user agree otherwise. The point to take from that is simply that the position is set by the arrangement between the two companies and should be written down rather than assumed.

One more boundary is worth stating plainly. The § 58 default attaches to an employment or service relationship, and to the commissioned categories in odst. 7. An engagement structured as a business relationship with an OSVČ outside those categories falls to be dealt with by contract. Whether a given engagement is genuinely an independent business at all is a separate question, and our post on employee misclassification in the Czech Republic covers the indicators derived from § 2 zákoníku práce.

A clock starts. Where an inventor creates an invention in fulfilment of a task arising from the employment relationship, the right to the patent passes to the employer unless the contract provides otherwise, under § 9 odst. 1 zákona č. 527/1990 Sb. The right to be named as inventor is unaffected. The Czech term is podnikový vynález.

The inventor must notify the employer in writing without delay and hand over the materials needed to assess the invention. The employer then has three months from that notification to claim the right to the patent. If it does not claim within three months, the right reverts to the inventor. Both sides must keep the invention confidential from third parties during that period. Those are § 9 odst. 2 a 3, and the three months is the single fact a client most often does not know.

Three months is short for a company whose patent decisions are made abroad, and shorter still when the notification lands with a line manager who files it as an interesting email. The fix is procedural: name a recipient for invention notifications, log the date of receipt, and calendar the decision.

The other half of the regime cannot be drafted away. Where the employer claims the right, the inventor has a statutory right to appropriate remuneration, přiměřená odměna, assessed by the technical and economic significance of the invention and the benefit from exploiting it, taking account of the employer’s material contribution and the scope of the inventor’s job duties. If what was paid later becomes manifestly disproportionate to the benefit obtained, the inventor has a right to additional settlement, dodatečné vypořádání. Both rights survive the end of the employment relationship. So the honest summary for patents is not “the employer owns everything”: it is that the employer can take the right and then owes for it. Úřad průmyslového vlastnictví is the office the application itself goes to.

A konkurenční doložka is valid only if the employer pays for it. Under § 310 zákoníku práce the employer must provide the employee with at least one half of the employee’s average monthly earnings for each month the undertaking is performed. The compensation is payable in arrears for each monthly period unless a different due date is agreed. A clause without it is not a Czech non-compete.

The rest of the frame is equally fixed. The maximum duration is one year after the employment ends, which is a ceiling rather than a default. What can be restrained is gainful activity identical to the employer’s business or competitive in nature towards it. The clause may be agreed only where it can fairly be required of the employee, having regard to the nature of the information, knowledge and working or technological processes they gained, and where their use in a competing activity could seriously hinder the employer’s business. The clause, any withdrawal from it and any notice terminating it must all be in writing.

Four things clients get wrong, and each one has cost somebody money:

• The compensation is not optional and cannot be negotiated downwards below half of average monthly earnings.
• The employer may withdraw from the clause only while the employment relationship lasts. Once employment has ended, the employer is committed and must pay.
• A contractual penalty, a smluvní pokuta, is a buy-out rather than a deterrent stacked on top: payment of the penalty extinguishes the employee’s obligation, and the amount must be proportionate to the nature and importance of the conditions.
• If the employer fails to pay the compensation or part of it within 15 days of its due date, the employee may terminate the clause, which then ends on the first day of the calendar month following delivery of the notice.

Certain categories are excluded from having such a clause at all, including teaching staff of schools established by the Ministry of Education, a region, a municipality or a voluntary association of municipalities, and teaching staff in social-service facilities. What the clause is worth in koruna depends on the employee’s average monthly earnings as computed under the zákoník práce, so the figure is calculated per person rather than quoted as a rate.

In three places, and a Czech employment relationship keeps them separate. The pracovní smlouva itself must be in writing, with each party receiving a copy, and carries the type of work, the place or places of work and the start date. The non-compete must be in writing under § 310 odst. 6. Anything you want to vary from the § 58 defaults needs its own written agreement, because the statute only yields to an agreement to the contrary. Our post on Czech employment contracts sets out what belongs in the contract itself.

Two smaller rules catch people out. The personal file, the osobní spis, may contain only documents necessary for the performance of the work, and access to it is limited to the employee’s superiors and a defined list of authorities including the labour inspectorate, Úřad práce, the data protection authority, courts, prosecutors and the police, under § 312. And married couples and registered partners cannot be in a basic employment relationship with each other under § 318, which occasionally surprises a founder pair planning their first two Czech contracts.

If you have no Czech company, the contracts still have to be issued by an employer. Under an Employer of Record Czech Republic arrangement your people are employed by our own Czech company on Czech employment contracts under the zákoník práce, with the IP position and any non-compete drafted into those contracts before the start date rather than after it. Our Czech company holds an employment agency licence (povolení ke zprostředkování zaměstnání) issued by MPSV, and the contracts are issued by that company, our own Czech s.r.o.

Where an employee works from home, the same documents carry the same weight, and the written remote-work agreement is a natural place to record how company material is handled away from the office. Our post on remote work in the Czech Republic covers the agreement and the 15 days’ notice that ends it.