Sentence of the Odessa Court of Appeals, dated February 24, 2021, case No. 522/8715/13-к. Available at https://reyestr.court.gov.ua/Review/95098145 (a pending cassation appeal)

In 2011, a Ukrainian company and Norwegian company 1 signed a website development agreement for another company, Norwegian company 2, according to which the Ukrainian company undertook to develop the above-mentioned website and further administer it.

After the development of the website, including the additional content, and having everything ready for handing over to the customer, the Ukrainian company issued an invoice in the name of Norwegian company 1 for the performance of the agreement.

At the same time, at the beginning of July 2012, the accused person, who worked as a programmer at the Ukrainian company and was the manager of this and other projects and communicated directly with the customers, including Norwegian company 2, agreed to copy and to transfer to the latter the created by the Ukrainian company and Norwegian company 1 website, in circumvention of the payment provisions of the agreement in question, however, provided that there would be a separate agreement with him for the administration of the mentioned website.

During the period between 28.07.2012 and 02.08.2012 the accused person being aware that he had no right of access to the website created by the Ukrainian company and Norwegian company 1 because he had been fired on 27.07.2012 from the Ukrainian company, using the obtained by him during the employment at the Ukrainian company passwords and access codes to the servers on which the data and software product for Norwegian company 2 were stored, committed the unauthorized interference with the operation of the servers of the corporate network of the Ukrainian company and Norwegian company 1 and copied the confidential information about the project and then deleted this information from the servers of the Ukrainian company and Norwegian company 1.

After destroying the project files, in order to block access to the Ukrainian company’s servers and to hide traces of his activities, the accused person changed the access passwords to the servers where the software for Norwegian company 2 was stored, causing significant damage to the Ukrainian company.

The court sentenced the accused person on the basis of Article 361 (2) of the Ukrainian Criminal Code [unauthorized interference with computers, automated systems, computer networks, or telecommunication networks] for three years of imprisonment with deprivation of the right to hold the position of a programmer for the term of 1 year.

Judgment of the Kyiv City Commercial Court, dated November 25, 2019, case No. 910/8974/19. Available at https://reyestr.court.gov.ua/Review/86106615

The plaintiff, an Estonian company, filed a lawsuit against the defendant, an individual entrepreneur from Ukraine, with the following claims:

• to recognize that the plaintiff is the owner of copyright in the computer program for functioning a video surveillance system created as a result of the performance of the contract with the defendant;
• to oblige the defendant to provide the plaintiff with all the results of the work under the contract between the plaintiff and the defendant, including the results of the development and improvement of the computer program for the operation of a video surveillance system;
• to prohibit the defendant from using this computer program created as a result of the performance of the contract with the defendant;
• to recover damages for the illegal use of the computer program;

The action was based on the following arguments:

• the plaintiff and the defendant entered into a contract under which the defendant for a fee should have performed works for the plaintiff in the field of software research and in accordance with tasking orders of the plaintiff ;
• the contract stipulates that if in the course of the works under the contract the defendant obtains a copyright in the created products, the copyright shall be transferred to the plaintiff who will have an unlimited right to use the product;
• the defendant performed certain works related to the development of the functionality of the program;
• the defendant had all the source data, as well as codes and other information related to the computer program in question on the basis of the contract;
• the parties agreed to terminate the contract and terminated it on December 04, 2018;
• the defendant did not give back to the plaintiff the documents and materials belonging to the plaintiff, as well as all the results of the works under the contract;
• the defendant after the termination of the contract illegally continues to use the computer program (processes, corrects and improves the software, etc.) the copyright in which belongs to the plaintiff, and illegally transfers the results to a third party, nonresident, in exchange for a significant remuneration.

The defendant’s position was based on the following arguments:

• the contract does not mention any video surveillance system and code development in this field;
• the plaintiff did not provide any evidence that the plaintiff owns the copyright in a certain computer program with a clearly defined source code;
• the existence of the contractual relations in the past does not restrict the defendant’s right to conduct business and his creative freedom;
• the contract does not stipulate that the defendant should be involved in activities related to such objects as the additional materials(resources, buttons, icons, configuration files, etc.); the design documentation (an architecture, composition, data processing algorithms, third-party libraries, and software modules, system requirements, compatibility issues, program compilation information); the description of the database structure, the test database, programs, and test methods, test reports, the operational documentation (a programmer manual, an administrator guide, a user guide);
• the defendant did not create the listed objects, the defendant did not receive any tasking orders on the basis of the contract from the plaintiff for their creation;
• the plaintiff was aware and did not deny that while the contract was effective the defendant had received tasking orders from a third party and accordingly the plaintiff had monitored them via the Jira service, and paid for the services of the defendant under the contract, and had no claims or objections;

The court referred to the contract and stated that the latter stipulates that the defendant should have performed works in the field of software research and in accordance with tasking orders of the plaintiff.

The court mentioned that the plaintiff had not submitted to the court copies of the tasking orders and had not provided evidence that the defendant had created the computer program for the plaintiff on the basis of the contract.

The court also noted that the plaintiff had not provided evidence of the development of the same computer program by the defendant for the third party that had been developed for the plaintiff and noted that the action was intended to “fishing” for evidence related to the cooperation between the defendant and the third party.

Based on these conclusions the court refused to grant the relief.

© Yuriy Karlash, English translation, 2021

© Yuriy Karlash, compilation, 2021