Allocating exploitation rights in custom software development — especially in the sensitive context of military procurement — poses intricate legal questions under German copyright and contract law. In a thoroughly reasoned judgment dated 16 January 2025 (5 U 93/23), the Hanseatic Higher Regional Court (OLG Hamburg) clarified when a contractor may claim injunctive relief to stop third-party use of military software and where the limits lie if the contractor holds only simple usage rights.
This decision is legally significant beyond this individual case: it refines key aspects of the scope of Section 97(1) of the German Copyright Act (UrhG) and the purpose transfer doctrine (Zweckübertragungslehre) under Section 31(5) UrhG in the specific context of commissioned software projects for the German Armed Forces (Bundeswehr).
Facts (German background)
The claimant, a medium-sized German IT systems integrator, acted as a subcontractor within a project to develop and integrate a custom-made communication management software (KMS software) for Germany’s F125 frigates. However, the actual programming work was carried out by a separate third-party subcontractor, X GmbH, under a distinct development contract (KMS Agreement). After the contractual relationship between the claimant and X broke down, X continued maintaining and supplying improved versions of the KMS software directly to the German Armed Forces. The claimant argued that it had acquired exclusive, alternatively at least simple usage rights and therefore sought to prohibit the German state’s continued use of the software beyond the last version delivered by the claimant.
Core Legal Issues and Reasoning of the Court
1. No authorship under German copyright law
First, the OLG Hamburg rejected the claimant’s assertion of co-authorship under Section 7 UrhG. Under German law, authorship requires an individual intellectual creation. Simply providing specifications or coordinating development is not enough: the creative element lies in writing the source code itself, which was solely done by X.
2. No exclusive usage rights under the purpose transfer doctrine (Section 31(5) UrhG)
The claimant invoked the purpose transfer doctrine: where a contract does not explicitly define which usage rights are granted, German copyright law assumes that rights are transferred to the extent required to fulfill the contractual purpose.
The court analyzed this thoroughly: the doctrine only applies subsidiarily — i.e., only in the absence of clear contractual provisions. Here, the KMS Agreement explicitly stipulated that X would directly grant usage rights to the German government. There was no provision for an “intermediate” acquisition of exclusive rights by the claimant.
The OLG underscored that the purpose transfer doctrine is not a backdoor to override an explicit licensing chain agreed between the parties. Established German case law holds that clear license chains block the supplementary application of Section 31(5) UrhG. The claimant’s argument that it should “automatically” receive exclusive rights conflicted with the contract’s wording and the parties’ evident intention.
3. No standing for injunctive relief under Section 97(1) UrhG if holding only simple usage rights
A focal point of the decision is the dogmatic clarification of who is entitled to seek injunctive relief under German copyright law. The OLG reaffirmed consistent Federal Court of Justice (BGH) precedent: only the author or an exclusive licensee has the right to prohibit third-party use under Section 97(1) UrhG. A simple usage right is purely contractual permission; it does not create an erga omnes exclusion right.
The claimant argued that even a simple license should suffice in view of the military security relevance of the software. The court rejected this: security considerations do not alter the strict doctrinal distinction under German law. Only an explicit exclusive right or a clear power of attorney from the exclusive rights holder would allow the claimant to sue. No such power of attorney was proven.
4. No reason to stay proceedings
The claimant asked the court to stay the proceedings until a separate case against X was resolved. The court dismissed this: whether the claimant had standing did not depend on that parallel case but followed directly from the current contract and license chain.
Outcome
Because the claimant neither authored the software nor acquired exclusive usage rights nor held any explicit authorization to enforce third-party claims, it lacked standing under Section 97(1) UrhG. The Higher Regional Court thus upheld the dismissal of the claim in its entirety.
Systematic Takeaway for German practice
The ruling clarifies a recurring pitfall in Germany: in complex software development projects, particularly in sensitive military contexts, contractors must negotiate clearly defined license structures upfront if they wish to reserve exclusive rights and corresponding blocking powers. The purpose transfer doctrine is no substitute for explicit agreements. Where the contract specifies direct licensing to the end customer — here, the German state — no additional exclusive rights arise “by default. Furthermore, simple usage rights alone do not entitle a party to seek injunctive relief under German copyright law — this applies universally, regardless of the software’s critical nature.
Key message
The OLG Hamburg’s judgment is a strong reminder for contractors and project partners in Germany’s defense and high-tech sectors:
- Do not rely on “default rules” — secure exclusive rights expressly in writing.
- The purpose transfer doctrine cannot override a clearly agreed license chain.
- Without exclusivity, there is no legal ground to block further development or use.
A lack of contractual clarity cannot be cured through litigation — robust contract drafting remains the safest protection.
Our law firm specialises in criminal defence, white-collar crime and IT law / technology law. Note our activity in digital evidence in IT security and software law.
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