Exclusive rights in a business acquisition: section 28 Austrian Copyright Act, business connection, contractual limits and closing evidence.
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In an asset deal, an existing exclusive right of use in a work can transfer to the buyer together with the business or business division to which it belongs. Section 28(1) of the Austrian Copyright Act generally allows that transfer without the author’s consent, unless the parties agreed otherwise.
The rule concerns a change in the holder of the right of use. It does not create copyright in the work and does not merge the author’s copyright with the transaction. A licence or isolated permission to use a work also does not automatically follow every asset in the deal.
The key questions are the type of right, its connection with the transferred business and the original agreement with the author. Before completion, the documents should identify the work, business division and scope of use covered by the transfer.
Review the rights agreement, the work, permitted uses, the business connection and any contractual departure from the statutory rule.
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Review the rights agreement, the work, permitted uses, the business connection and any contractual departure from the statutory rule.
Connect the right of use with the specific business or division and read the original agreement for transfer restrictions. Record the work, permitted uses, territory, term and evidence required for completion.
First establish whether the company holds an exclusive right of use, a non-exclusive permission or another contractual position. Secure the original agreement and connect the right with the business being acquired before preparing the transaction schedule.
Section 28(1) of the Austrian Copyright Act addresses an existing right of use. If that right belongs to a business or business division, it may be transferred to another person together with that business. The provision therefore supports the transfer of a business-related use position in an asset deal.
The statutory effect requires a concrete connection. A work appearing in a data room or being used in day-to-day operations does not by itself resolve the contract question. The acquisition agreement should connect the relevant right with the business or division included in the purchase perimeter.
The rule operates as a default where the parties have not agreed otherwise. The right should therefore be reviewed together with the original rights agreement and the transaction documents.
Copyright arises in the author of the work. An exclusive right of use is a separate contractual position that allows the holder to use the work within the agreed scope. In an acquisition, the review must identify the position granted to the target company and the uses covered by it.
The word “licence” does not answer that question. An agreement may grant exclusive or non-exclusive use and may limit use by form, territory or time. The file should show the actual content of the right so that the buyer can assess the scope of the transfer.
The article on IP and IT due diligence covers the broader rights chain. This article focuses on the narrower question whether an existing exclusive use position can transfer with the business to which it belongs.
Section 28(1) requires the right of use to belong to the business or business division being transferred. The review should therefore identify the operation to which the right is assigned and confirm that this exact perimeter is part of the asset deal.
The distinction matters when only a division is sold. Brand assets, software, campaign material, technical documentation and other works may support several business lines. The transaction file should show which unit uses the right and which unit the buyer takes over.
A share deal raises the issue differently because the company remains the rights holder. In an asset deal, the focus is the allocation of individual rights to the business or division being transferred. That allocation belongs in the rights schedule and the acquisition agreement.
The words “unless otherwise agreed” limit the statutory default. The original agreement may require the author’s consent, prohibit transfer, limit the permitted transferee or contain a specific rule for a sale of the business. Those clauses should be reviewed before the right is included in a completion schedule.
The permitted use, territory, term, sublicensing and adaptation rights also matter. A transfer with the business does not expand the substance of the right. The buyer receives the position that was validly granted to the previous holder, within the limits of that agreement.
If the agreement and the rights schedule point in different directions, the issue should be resolved before signing. For a work that is central to the business, an express consent, confirmation by the rights holder or supplemental agreement may be required.
The rights schedule should include the full grant agreement, amendments, annexes, the author or contracting party, the work and the permitted uses. It should also identify the transferred business division and the contractual link between the right and that division.
For completion, record whether the right transfers with the business, whether notice or consent is contemplated and which documents are handed over. For software, campaign material and technical documentation, include versions, storage locations and the records needed for continued use.
The general review of signing authority remains a separate issue. The articles on managing-director changes and the commercial register and on signing authority and powers of attorney provide complementary guidance for formal completion steps.
Clarify the rights chain before transfer: Section 28(1) does not replace review of the original rights agreement. If the work, business division or scope of use is unclear, the transaction documents should identify those points before completion. Subscribe to legal updates for new articles and legal guidance from the firm.
The transfer can be documented by working through the type of right, its business connection and the original agreement.
| Review point | What matters | Evidence at completion |
|---|---|---|
| Type of right Exclusive right of use or another permission? | Identify the contractual position precisely | Grant agreement and amendments |
| Work Which work is protected or used? | Connect work, version and author | Work register and rights chain |
| Business Which business or division holds the right? | Define the transferred perimeter | Asset list and acquisition schedule |
| Agreement Is there a different transfer rule? | Check consent, prohibition or limitation | Clause review and any confirmation |
| Scope Which uses, territories and terms are covered? | Do not confuse transfer with expansion | Use matrix and handover record |
Section 28(1) concerns the transfer of an existing right of use with the business or business division to which it belongs. The specific agreement and rights chain remain decisive.
Section 28(1) generally permits transfer with the business or business division to which the right belongs without that consent. The original agreement must not provide otherwise, and the required business connection must be present.
No. The review must identify the contractual position and establish that it belongs to the transferred business or division. A non-exclusive permission, an isolated licence or an agreement with its own consent requirement may need separate treatment.
The agreement, the operational use of the work and the purchase perimeter provide the starting points. Where several business lines are involved, the work, use, previous allocation and transferred unit should be documented in the schedules.
The transfer generally carries the existing contractual position. It does not automatically expand it. Permitted uses, territory, term, adaptation and sublicensing must therefore be taken from the original agreement and reviewed separately.
The transfer concerns the contractual ability to use the work. It does not create copyright in the buyer. The transaction documents should keep the author’s copyright and the contractual right of use distinct.
Review the rights chain, contracts and allocation within the business.
Document changes affecting the legal entity and completion.
Review signatories and completion evidence before signing.
Classify source code, licences and data in the transaction.
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