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OWNERSHIP
Does my contractor own my code?
Likely yes, unless your contract explicitly assigns the code to you. Custom software written by an independent contractor generally does not fall into the narrow US statutory categories for contractor work for hire, so paying an invoice does not transfer ownership on its own. You need a written IP assignment clause covering the source code, and ideally the underlying documentation, for the rights to move to you. The same risk applies in the EU and UK: there is no work-for-hire shortcut for contractors there either, so an explicit assignment is the only route to full ownership.
Why software rarely qualifies as work for hire
The US Copyright Act lists nine narrow categories where a contractor's output can be treated as work for hire, and standalone custom software is not one of them. This means the common assumption, that hiring a developer to build something automatically makes it yours, is usually wrong unless the contract contains a proper assignment clause. Many startup founders discover this gap only during a fundraising due diligence process, which is a bad time to find out.
What a proper software IP assignment covers
A solid clause assigns the finished application, the source code, the documentation, and any pre-existing or background IP the contractor incorporated, to the extent they had the right to license it. It should also address open source components, since a contractor's use of open source libraries can bring licensing obligations of its own that survive the assignment, such as attribution requirements or copyleft terms.
The risk of using multiple contractors without assignments
When a codebase is built by several contractors over time, and only some of them signed assignments, you end up with a patchwork of ownership. Some parts of your product may not actually be yours, which becomes a serious liability during an acquisition, investment round, or licensing deal. This is a chain of title problem specific to software.
What to do if you never got an assignment
Contact the contractor and ask them to sign a retroactive IP assignment. Most will agree, since they were usually paid in full and have no ongoing interest in the code. If the contractor is unreachable or refuses, you may need legal advice on your options, which can include arguing an implied licence, though this is a weaker and less certain position than an assignment.
KEY FACTS
- 01Custom software rarely qualifies for US contractor work-for-hire treatment.
- 02A written IP assignment is generally required for a client to own contractor-built code.
- 03Open source components can carry their own licence obligations that survive an assignment.
- 04Multiple contractors without assignments can create a patchwork chain of title in your codebase.
FAQ
Does an employee automatically assign their code to the company?
Generally yes for work created within their job, since employee work for hire applies automatically in the US.
Can a contractor still use the code they wrote for me elsewhere?
Only if your assignment is not exclusive or does not restrict reuse, so check the specific wording carefully.
Does a non-disclosure agreement act as an IP assignment?
No, an NDA only restricts sharing confidential information, it does not transfer ownership of anything.
What if the contract just says work for hire without listing a category?
It may not hold up for software, so add a fallback assignment clause to be safe regardless.
LAST REVIEWED 01 août 2026 · FRANÇAIS