Who Owns the Software Your Contractor Built? Check Before You License or Sell It
Your business paid the invoices, received the files, and uses the software every day. Those facts do not answer every ownership question a buyer, investor, or licensee may ask. Before promising exclusive rights, assemble the documents that connect the work to the rights your company intends to transfer.
Payment and copyright ownership are different
Federal copyright law distinguishes ownership of a copy from ownership of the copyright. See 17 U.S.C. § 202. Receiving source files or paying a developer therefore does not, by itself, establish ownership of every copyright in the deliverable.
A work-made-for-hire analysis also requires care. Employee work and specially commissioned work are governed by different requirements under 17 U.S.C. § 101. A contract label alone does not make every independent contractor’s software a work made for hire.
Read the actual transfer language
Review who signed the development agreement, what work it covers, and when any transfer occurs. Section 204(a) generally requires a signed writing for a transfer of copyright ownership, other than a transfer by operation of law. Have counsel assess the wording and any applicable exceptions rather than treating a purchase order or payment receipt as a substitute.
Check amendments, statements of work, acceptance conditions, and payment provisions. Identify whether a subcontractor contributed code and whether the developer had authority to transfer those contributions.
Separate custom work from existing components
Ask the developer to identify pre-existing tools, licensed libraries, open-source components, and third-party services. For each component, determine what permission the company has and what obligations accompany its use or distribution. Ownership of custom additions does not automatically confer exclusive ownership of everything in the product.
Request an inventory that includes component names, versions, licenses, and relevant notices. A useful inventory can support both legal review and future maintenance.
Check operational control
Confirm authorized access to repositories, deployment systems, documentation, domains, and administrator accounts. Practical access and legal ownership are separate issues; both matter when a contractor relationship ends. Preserve records and avoid disruptive access changes while counsel evaluates a dispute.
Resolve gaps before making a promise
A buyer’s request for an ownership representation is a good time to identify missing assignments, unclear exclusions, or incomplete records. Counsel may recommend confirmatory documents, permissions, or a narrower representation based on the evidence.
The objective is not to assume that every documentation gap defeats a deal. It is to identify the rights the company can support and address uncertainty before promising more than it has.
Discuss your business’s contract or dispute-planning needs with Ahaji Amos, PLLC.
General educational information only; not legal advice. Reading this article or contacting the firm does not create an attorney-client relationship.
Additional statutory source: 17 U.S.C. § 101: work made for hire definition.
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