unternehmensnachfolge-anwalt.at
Mag. Bernhard Brandauer, Rechtsanwalt
How software, patents and operational know-how are identified, transferred and protected during a business succession in Austria.
Software, patents and operational know-how are often among a company’s most valuable assets. Yet transfer agreements frequently mention them only as a general package. That leaves open who owns the source code; which licence continues; who may use an invention; and which people actually carry the essential knowledge.
A business succession therefore requires more than copying files or handing over passwords. The chain of rights must be traceable from the developer, inventor or previous contracting party to the successor. Confidentiality, documentation and a working handover must protect the business from the first day after the change.
This article sets out the main checks for software, patents and know-how. It supplements the succession planning topic and the article on typical transfer agreement provisions with a focus on intangible business assets.
The check separates ownership, usage rights and confidentiality. You can send the result to the firm with your key facts.
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Organise the documents in a rights schedule. Name the protected asset, software scope, contracting party, usage rights, access and the person responsible for completion. This turns documentation into a verifiable part of the transfer agreement.
Identify developers, inventors, licensors, former employees and existing contracts. For employee inventions sections 7 to 13 of the Austrian Patent Act must be considered. For software distinguish development rights, usage rights and the right to modify the code.
Separate technical availability from legal authority. A successor may be able to enter a system while lacking the right to use source code, an invention or confidential information to the desired extent. Completion should follow only after this distinction has been resolved.
The first step is to separate three questions. Ownership or lawful control shows who may dispose of an intangible asset. A usage right shows what another person or company may do with it. Technical access initially shows only that a system or file can be reached.
A company may own the rights even though a shareholder, managing director or employee created the software. In a sole proprietorship the entrepreneur may hold the rights while contracts with agencies, customers or service providers restrict their use. The succession must therefore distinguish a share deal, a business transfer and an individual transfer of rights.
A rights inventory should record the asset, its origin, the entitled person, the scope of use and the evidence. Add term, territory, modification, onward transfer, technical dependencies and the person who will support the handover. The article on business transfer in family succession covers the broader operational transition.
Section 40b of the Austrian Copyright Act contains a special rule for computer programs. If an employee created a program in fulfilment of employment duties, the employer is generally entitled to exercise the economic rights unless agreed otherwise. The specific development situation still needs to be reviewed.
External development requires a detailed contract. Review source code, object code, documentation, tests, interfaces, modification rights, further development, maintenance and use by affiliated companies. An invoice for programming services does not automatically prove the required rights. Open-source components may also create separate obligations regarding notices or distribution.
The handover therefore includes more than a repository and a password. The rights schedule should identify versions, third-party components, open maintenance work, escrow arrangements and responsible developers. If the code is held by a service provider, the successor needs an enforceable right to delivery and cooperation.
Many businesses use software, databases, libraries or technical platforms under a licence. The program itself is not transferred; a contractually limited right of use continues. The licence may make transfer, a change of control, use by an affiliated company or a change of contracting party subject to consent.
The licence schedule should record the parties, licensee, user numbers, territory, term, termination, maintenance, support, sublicensing and the treatment of a change of control. Cloud services also require review of administrator changes, data export, retention and deletion after termination.
Section 38 UGB may be relevant to business-related legal relationships in a business transfer. It does not answer every question under an individual licence. The particular contract remains decisive. The published article on transfer agreement provisions provides the broader contractual context.
Patent work requires a distinction between inventor, applicant, patent owner and economic user. The register entry is an important starting point but does not replace a review of employment relationships, invention agreements and transfer documents. An unpublished patent application also belongs in the rights inventory.
For employee inventions section 7 of the Austrian Patent Act requires a written agreement under the statutory conditions. Section 8 may create a claim to special remuneration for an assignment or licence. Section 10 allows later adjustment if the circumstances relevant to the remuneration change substantially. A transfer to a third party creates additional statutory issues.
Section 12 provides for prompt notification of an employee invention and a declaration by the employer within four months. Section 13 contains confidentiality duties for certain employee inventions. These points should not be replaced by a general warranty in the transfer agreement. The articles of association succession topic is useful where rights and approval requirements also affect corporate governance.
Know-how is not protected merely because it is valuable or internal. Under section 26b UWG information must be secret; it must have commercial value because it is secret; and it must be protected by reasonable secrecy measures. Depending on the business these may include access rules, roles, training, confidentiality agreements, labels and technical safeguards.
The succession should record which information is transferred and who may use it until completion. This may include recipes, production parameters, pricing logic, testing methods, internal data models or unpublished product plans. A list without an access concept is not enough. The measures must continue after the change.
Under section 26c UWG use or disclosure may be unlawful where it breaches a confidentiality agreement or another duty. Section 26d describes lawful routes such as consent by the holder. If the rights chain is unclear, the agreement should state which information may be disclosed to which people and which duties continue.
A sound transfer agreement does not merely refer to software and know-how. It includes a rights schedule with an unambiguous description, current status and agreed transfer. Each entry should state its legal basis, scope, restrictions, documents, contact person and outstanding consent.
For software include repositories, build and deployment material, third-party components, licences, access levels, backups and maintenance contracts. For patents include applications, grant documents, renewal fees, inventor records and pending proceedings. For know-how include protected information classes, people with access and the measures used to protect them.
The agreement should also fix a technical handover date. The successor needs a way to inspect the material without endangering operations. For gaps, agree cooperation by the transferor, remediation and how unavailable consents will be handled. The article on company register and powers of attorney after a transfer shows how this schedule fits into the wider completion plan.
First, the business is transferred without naming intangible assets individually. After completion it becomes difficult to establish whether a particular program, invention or database was included.
Second, development work is treated as proof of a rights transfer. Employment status, the employment agreement and external development can lead to different results. The origin of every important software component should be documented.
Third, licences are treated as ownership. A licence change may require consent, a new contracting party or technical migration. Cloud and maintenance contracts should be confirmed before the effective date.
Fourth, know-how is assumed to be secret without evidence of reasonable measures. Access, labels and confidentiality are therefore part of the handover.
Fifth, no plan exists for the person who carries the knowledge. Source code, inventor records and production knowledge often remain with a developer or transferor. The agreement should regulate handover meetings, documentation and time-limited cooperation.
Start with a complete inventory. In addition to protected rights and software include invention notifications, development contracts, licence terms, data collections, confidentiality agreements and disputes. Sort the result into ownership, usage and access.
Then review the evidence. Where necessary involve former employees, developers, agencies, licensors and register documents. For patents compare the register with the underlying agreements. For know-how check whether the stated measures are actually used in the business.
Only then draft the rights schedule. It connects technical delivery, contractual statements, consent requirements and confidentiality. Before the effective date test access, backups and contact persons. After the date the successor should record that agreed access and use are possible.
The succession plan then identifies the intangible foundations of the business instead of leaving them as an abstract value. It shows which legal and practical steps allow the successor to use them.
Section 40b of the Austrian Copyright Act contains a special rule for computer programs created by an employee in fulfilment of employment duties unless agreed otherwise. The employment agreement, actual development work and third-party components still need review. For external developers the agreed rights are particularly important.
That depends on the structure. In a share deal the company remains the same legal entity while the ownership interests change. In a business transfer or an individual transfer of rights the patent owner, register entry, transfer documents and employee invention claims must be reviewed separately.
Under section 26b UWG the information must be secret; it must have commercial value because of its secrecy; and it must be protected by reasonable secrecy measures. In practice this includes tiered access, confidentiality rules and a record of protected information classes. These measures must continue during the handover.
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