Software & data
7 min read
Who owns the code your contractor wrote
Code written by employees usually belongs to the company. Code written by contractors, agencies and founders before incorporation usually does not — until someone signs the right piece of paper.
Jasleen Sandhu
Partner · Technology & data
Published
Length
7 min read
In short
Employee code is usually yours; contractor code usually is not.
Invoices do not assign copyright — signed assignments do.
Founders' pre-incorporation work needs assigning to the company.
Audit open-source licences before, not during, a deal.
Jasleen Sandhu
Partner · Technology & data
Published
Length
7 min read
In short
Employee code is usually yours; contractor code usually is not.
Invoices do not assign copyright — signed assignments do.
Founders' pre-incorporation work needs assigning to the company.
Audit open-source licences before, not during, a deal.
The due-diligence question every investor asks, and most start-ups answer late.
Payment does not transfer copyright
Under UK law, copyright in software written by an employee in the course of their employment belongs to the employer. Everyone else — freelancers, agencies, offshore developers, advisers and co-founders working before the company existed — owns what they write unless it is assigned to you in a signed document.
A court may imply a licence to use code you paid for, but it will be the narrowest licence that makes the arrangement work. It will rarely include the right to sell the business, relicense the platform or stop the developer reusing the same code for a competitor.
Where it surfaces
It surfaces in due diligence. An investor or acquirer asks for the chain of title for the core codebase, and the answer is a set of invoices. Fixing it then means tracing people who may have moved on, and negotiating with them when they know exactly how much the signature is worth.
Open source is a licence, not a gift
The same review should cover the open-source components in the stack. Most are permissive and harmless. A few carry conditions that, if triggered, can oblige you to publish your own source code. Knowing which ones you use, and how, is a short exercise before a transaction and a long one during it.
Paying for the code is not the same as owning it. Ownership moves in writing, or not at all.
What to do next
Send us a list of everyone who has written code for the product and the paperwork you hold. We will map the gaps and draft the assignments that close them.
Software & data
7 min read
Who owns the code your contractor wrote
Code written by employees usually belongs to the company. Code written by contractors, agencies and founders before incorporation usually does not — until someone signs the right piece of paper.
Jasleen Sandhu
Partner · Technology & data
Published
Length
7 min read
In short
Employee code is usually yours; contractor code usually is not.
Invoices do not assign copyright — signed assignments do.
Founders' pre-incorporation work needs assigning to the company.
Audit open-source licences before, not during, a deal.
Jasleen Sandhu
Partner · Technology & data
Published
Length
7 min read
In short
Employee code is usually yours; contractor code usually is not.
Invoices do not assign copyright — signed assignments do.
Founders' pre-incorporation work needs assigning to the company.
Audit open-source licences before, not during, a deal.
The due-diligence question every investor asks, and most start-ups answer late.
Payment does not transfer copyright
Under UK law, copyright in software written by an employee in the course of their employment belongs to the employer. Everyone else — freelancers, agencies, offshore developers, advisers and co-founders working before the company existed — owns what they write unless it is assigned to you in a signed document.
A court may imply a licence to use code you paid for, but it will be the narrowest licence that makes the arrangement work. It will rarely include the right to sell the business, relicense the platform or stop the developer reusing the same code for a competitor.
Where it surfaces
It surfaces in due diligence. An investor or acquirer asks for the chain of title for the core codebase, and the answer is a set of invoices. Fixing it then means tracing people who may have moved on, and negotiating with them when they know exactly how much the signature is worth.
Open source is a licence, not a gift
The same review should cover the open-source components in the stack. Most are permissive and harmless. A few carry conditions that, if triggered, can oblige you to publish your own source code. Knowing which ones you use, and how, is a short exercise before a transaction and a long one during it.
Paying for the code is not the same as owning it. Ownership moves in writing, or not at all.
What to do next
Send us a list of everyone who has written code for the product and the paperwork you hold. We will map the gaps and draft the assignments that close them.