Who owns the code your contractor wrote?

Paying the invoice does not buy the copyright. What the default position is, why a clause in an email will not carry it, and what to do when the person who built your product left three years ago.

Problems, in order · Part of Outsourced General Counsel

It surfaces at the worst possible moment. A buyer, an investor or a large customer asks the company to warrant that it owns its own product, and somebody goes looking for the paperwork behind the first two years of development.

The developer was a contractor. There was a statement of work, an hourly rate and a long thread of invoices, all paid on time. There was no assignment.

What paying an invoice actually buys

The employee position and the contractor position are different, and the difference is statutory rather than a matter of custom. Copyright in a work made by an employee in the course of employment belongs to the employer by default (section 11, Copyright, Designs and Patents Act 1988). A contractor is not an employee, so nothing passes automatically.

What the paying business usually has instead is an implied licence: a right to use the work for the purpose it was commissioned for. Courts will read one in where the commercial arrangement makes no sense without it. It is genuinely useful, and it has two limits that matter.

It is a licence, so it does not stop the contractor reusing the same code elsewhere, including for a competitor. And it is not ownership, so the company cannot give a buyer the warranty a buyer will ask for.

Why the clause you have may not work

Three versions turn up repeatedly, and two of them do not do the job.

The first is a line in an email: "all IP created is yours". An assignment of copyright is not effective unless it is in writing and signed by or on behalf of the assignor (section 90, Copyright, Designs and Patents Act 1988). Whether a given exchange clears that bar is a question you do not want to be arguing about in a data room.

The second is a clause in the company's own terms that the contractor never signed. A document one side wrote and the other never agreed to binds nobody.

The third does work: a signed agreement containing a present assignment of existing and future rights, with a covenant to do whatever else is needed later, and a waiver of moral rights.

Future works need saying out loud

An assignment that only covers what exists on the day it is signed leaves everything written afterwards outside it. Ongoing contractor relationships need wording that carries forward, or a fresh assignment at the end of each engagement, which nobody remembers to do.

Third-party and open-source components

Assignment covers what the contractor created. It does not cover what they brought in. A separate question, and the one that most often produces an unpleasant surprise, is what licences attach to the libraries in the build, and whether any of them impose obligations on the company that distributes the result.

That is a review of the dependency list, not of the contract, and it is worth doing once properly rather than repeatedly under pressure.

What to do when the contractor has gone

This is unglamorous work and it is almost always successful. Most former contractors are reasonable people who assumed the company owned the work anyway and will sign a short document for nothing or for a nominal sum.

Do it in this order.

Build the list first: every person and agency who contributed to the product, what they built, and when. Development, design, brand, content, data and models all count.

Then sort the list by exposure rather than by date. A contractor who wrote a utility used once is not the same problem as the one who built the core service.

Then approach the material ones while nothing is pending. A confirmatory assignment requested in a quiet month is an administrative favour. The same request made a fortnight before exchange is a negotiation, and the other side knows it.

Where somebody genuinely cannot be found or will not sign, the answer is not silence. It is a documented position: what was built, what licence the company has, what the risk actually is. A buyer who is told about a gap and shown the analysis behaves very differently from one who discovers it.

Getting it right for everyone after this

The fix going forward is a single paragraph in a document every contractor signs before starting, and one person whose job it is to make sure they did.

That is the part that fails. The clause is easy; remembering it on the Friday afternoon when a freelancer starts on Monday is the hard bit, and it is a records problem rather than a legal one. Holding a register of who signed what, alongside the rest of the contract estate, is what a contract control centre is for.

Dinmore Bell runs that as a standing function for founder-led businesses: the template, the chasing, the register, and the confirmatory assignments when a historic gap turns up. It is the same reason a company thinks about what its first legal hire would actually spend the week doing before making one.

Where a specialist is needed

Registered rights are a separate discipline. Trade mark and patent filings, oppositions and the strategy behind a portfolio are for a trade mark attorney or patent attorney, and Dinmore Bell instructs and coordinates them rather than acting itself.

If a contractor is actively asserting ownership and the dispute has reached the point of proceedings, that is litigation, and where rights of audience are needed it is a matter for regulated counsel.

Where a contractor sits outside England and Wales, their local law may treat authorship, moral rights or assignment differently, and the governing law clause in the engagement decides whose rules apply. That is worth checking before assuming an English form of words has done its job.

Everything else here is ordinary commercial work, run through an outsourced General Counsel function so that it happens before somebody asks for it rather than afterwards.