In the Czech Republic, there are tens of thousands of e-shops, and their transfers are relatively frequent. This fact contrasts with the relatively frequent unpreparedness of both parties (the seller and the buyer) regarding what character such a transaction should actually have from a legal perspective and what risks may be associated with it. Problems usually do not arise in situations where the subject of the transfer is a share in a business company that operates the online shop. In these cases, the parties are usually aware that this is a more complex transaction requiring a certain degree of preparedness on both sides.
However, if such a corporate transaction does not take place, from a legal perspective the cleanest option is the sale of an enterprise or part thereof by means of a so-called agreement on the purchase of an enterprise pursuant to the provisions of Section 2175 et seq. of the Civil Code (Act No. 89/2012 Coll., as amended). The term enterprise (závod) replaced the concept of business (podnik) in the Civil Code (the explanation of what led the legislator to such a change is not particularly convincing). Nevertheless, this changed nothing in the essence of the matter, and by an agreement on the purchase of an enterprise “the buyer acquires everything that belongs to the enterprise as a whole.” In simplified terms, this means that upon the purchase of an enterprise, all assets and all contractual relationships related to the enterprise pass to the buyer under one agreement – in our case, therefore, all assets and all contractual relationships related to the e-shop. However, the transferor remains (logically) a guarantor for debts related to the enterprise. This is also a more complex transaction, and in practice it transpires that the parties are often not interested in such a solution for various reasons. Therefore, we shall not address it in greater detail and shall focus on the most popular, but from a legal perspective the most delicate option, which is the “transfer” of individual components of the e-shop.
In relation to this option, it is good to bear in mind that an online shop is, from a legal perspective, composed of many components, some of which are subject to copyright protection (graphics, computer programs, databases). The possibility of disposing of objects protected by copyright may be more complicated than in the case of tangible things. However, this naturally applies not only to “transfers” of online shops, but also to “transfers” of other web projects (web applications, other websites), and the information provided below may also be applied to these cases.
What, then, must be remembered above all? As the first and one of the most important components, it is logical to mention the domain name or domain names on which the shop is operated. Legal relationships relating to domain names are specific to a certain extent, and primarily concern a contractual relationship between the domain name holder, the registrar and the administrator of the central register. A change in the person of the domain holder does not occur on the basis of the agreement itself (either factually or, apparently, legally), but only through the implementation of such a change by the administrator of the central register. The administrator of the central register shall effect the change at the request of the registrar, who submits it on the basis of the consensual action of the parties. The transfer of a domain name is therefore not fully at the disposal of the contracting parties, and their cooperation is required even after the conclusion of the agreement. In practice, these facts mean, even in the case of transactions concerning only domain names, that it is essential to use escrow or another security mechanism.
Another very important component is the software solution itself that is used for the operation of the online shop. As is known, computer programs are subject to copyright protection, which limits the possibilities of disposing of them to a considerable extent – in the Czech Republic, copyright is non-transferable. This is therefore one of the areas to which it is appropriate to pay increased attention (which for the seller usually applies already at the very creation of the e-shop). From a legal perspective, it is necessary to distinguish situations where the software solution is created to measure for the operator of the e-shop from cases where a standardised solution is used (most often on the basis of a licence agreement). Fundamental problems should not arise in the first-mentioned case, i.e. where the computer program was developed internally. For these purposes, we understand internal development to mean development through the e-shop operator’s own employees or other programmers (natural persons) directly contracted by the operator. In this situation, if the e-shop operator has not deviated from the statutory regime in its contractual relationships with the authors, it should be able to grant the buyer at least a broad licence to the computer program or even assign the right to exercise economic copyright to it. We addressed this issue in greater detail in this article.
A more complicated situation from a legal perspective may arise if the software solution was produced to order by a legal person or provided on the basis of a licence agreement. Here, in a number of cases, the consent of the licence provider may be required for the assignment of such a licence to a third party (this will depend on the content of the contractual relationship), for which the licence provider may demand monetary performance, etc. As outlined above, from the perspective of the e-shop operator, it is appropriate to pay attention to this issue already at the creation of the licensing relationship.
A similar situation to that of computer programs exists in the case of graphic works, including graphic logos, verbal works (longer texts) or photographs displayed on the website. These too are, in most cases, subject to copyright protection, and their legal regime is slightly different from that of computer programs. If the e-shop operator did not arrange for their production internally (through its employees) and its contractual arrangements with the rights holders do not expressly provide otherwise, the seller will, in principle, need the consent of the rights holder to assign the licence to these intangible assets to the buyer.
Another important component of every online shop is databases. In practice, these may most often be databases of users, goods, newsletter recipients, etc. Databases are protected by the so-called sui generis right of the database maker pursuant to the provisions of Section 88 et seq. of the Copyright Act (Act No. 121/2000 Coll.), although formally this is not copyright or a right related to copyright. From our perspective, this is advantageous, because unlike works of authorship or objects protected as works of authorship (computer programs or photographs), the sui generis right of the database maker is transferable. The database maker’s right may thus be transferred by agreement.
However, the issue of user databases is closely linked to regulation in the field of personal data protection. If personal data are to be provided to the buyer, from a legal perspective this constitutes the handover of personal data from one personal data controller to another controller, which is in principle only possible with the consent of the data subject. If the data subject’s consent to the handover is not given, in our view such a situation has no simple solution, and in practice various creative constructions may be encountered (so as not to result in a flagrant breach of this obligation). In this context, it is possible to mention further implications to be brought from May 2018 by Regulation (EU) 2016/679 of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation).
Conversely, the transfer of ownership rights to stock (to goods), if this is to occur upon the “transfer” of the online shop, is usually not a particularly problematic issue. Nevertheless, even in this area it is necessary to bear in mind the context, for example in relation to rights arising from liability for defects in goods vis-à-vis the supplier of such goods.
Rights arising from liability for defects vis-à-vis end customers also deserve special attention from the contracting parties. In the case of a “transfer” of individual components of an online shop, of course, the seller’s obligations arising from liability for defects in goods cannot be transferred or pass without the customer’s consent, which requires express regulation of the solution to this issue (both parties usually have an interest in customer complaints being properly handled).
The list we have provided is, of course, not exhaustive, and in practice other relationships are often addressed between the seller and the buyer. By way of example, it is possible to mention relationships with employees, transfers of trade marks or the use of unregistered designations, issues related to access to profiles on social networks or within analytical tools, contractual relationships with suppliers of goods, contractual relationships with forwarding companies or with insurance companies, etc. This list too may be used to demonstrate that the “transfer” of an online shop need not always be an entirely trivial matter. It may therefore often prove worthwhile to consider whether it might not be preferable to choose the aforementioned option of transferring an enterprise or part thereof.
Josef Aujezdský
Law Firm Mašek, Kočí, Aujezdský www.e-Advokacie.cz – online legal advice
The article was originally published on the Lupa.cz server.
This text was translated from Czech to English using an AI translator.