Who owns software that was built for your business?
Under US copyright law, the person who writes software is ordinarily its author and first owner, even if you paid for it. You generally own it only if the copyright is transferred to you in a signed writing or the work qualifies as a work made for hire, which usually means the person was your employee. Put ownership in the contract. This is a plain summary, not legal advice.
The default rule
The U.S. Copyright Office's Circular 30 says: "Ordinarily, the author is the person or persons who actually created the work". Section 201(a) of the Copyright Act provides that copyright starts with the author. On the Office's description, paying someone to write software does not by itself make you the author unless the work is made for hire.
The main exception is a work made for hire, where the party that hired the creator is treated as the author and owner.
When a work is made for hire
The Copyright Office says a work is made for hire in two situations: when an employee creates it as part of regular duties, or when a commissioned work falls in one of nine listed categories and both sides sign a written agreement saying so. For a commissioned work, the Office says that if it fails any of its four requirements, it is not a work made for hire.
The nine categories do not name software, and whether a particular program fits one is a question for a lawyer. The related answer on who owns a website a designer built walks through the same circular in more detail.
A transfer has to be in writing
Section 204(a) of the Copyright Act says a transfer of copyright ownership, other than by operation of law, is not valid unless it is in writing and signed by the owner of the rights conveyed or the owner's duly authorized agent. A verbal agreement is not that. If the developer is the owner and nothing is signed, what you can do with the code afterward is unclear, which is the reason to settle it up front.
What to ask for in the agreement
- An assignment of the copyright to you, signed by the developer, or if the developer keeps ownership, a written license that says how long it lasts, whether it can be revoked, whether you may change the code, and whether it passes to a buyer of your business.
- The source code itself, not only a working app, with notes on how to build and run it.
- Ownership of the accounts it runs on, such as hosting, domain, code storage and app store listings, in your name.
- A list of third-party components, including open-source libraries and paid services, with their license terms and who renews them.
- A statement that the developer has the right to hand over what they are handing over.
Limits of this summary
This is a plain summary, not legal advice. It covers US federal copyright law only. The circular describes itself as an overview, and the Copyright Office says it cannot provide legal advice about the status of a work. Have a lawyer read the agreement before you sign. The related answers on who owns a website a designer built and on what a website design contract should include cover the same issues for websites.
Sources
- U.S. Copyright Office, "Works Made for Hire" (Circular 30, revised 08/2024)
- U.S. Copyright Office, Copyright Law of the United States, "Chapter 2: Copyright Ownership and Transfer" (sections 201 and 204)
Related answers
- Who owns the website a designer built for you?
- What should a website design contract include?
- What should you have ready before hiring a software developer?
Custom software and apps
Off-the-shelf tools get you most of the way. When the last stretch is where the time goes, we build the part that fits: the dashboard, the portal, the internal tool or the app.