Who owns software built by developers, contractors and agencies?

By the ITLAW Team · Last reviewed November 2026 · General information, not legal advice

Guides › IP & Domains › Software ownership

Software is protected as a literary work under the Copyright Act 1968 (Cth). Copyright arises automatically when the code is written. The question that matters commercially is who owns it.

Employees

Where an employee writes code under a contract of employment, in the course of that employment, the employer is generally the first owner of copyright. Problems arise where work is done outside normal duties, before employment started or by founders who were never employees.

Contractors, freelancers and agencies

A contractor who writes code is usually the first owner of copyright, even if you paid for the work. Ownership only transfers through an assignment that is in writing and signed by the owner. Without one, you may have only an implied licence to use the software for the purpose it was commissioned, which may not cover modifying, licensing or selling it.

Assignment vs licence

• Assignment: you become the owner and can use, modify, license and sell the code.
• Exclusive licence: you have exclusive rights to use it, but ownership stays with the developer.
• Non-exclusive licence: the developer can reuse the same code for others.

Agencies often reuse their own libraries (“background IP”) across clients. A common compromise is an assignment of project-specific code plus a perpetual licence to the agency’s background IP.

Open source components

Most software includes open source code. Permissive licences such as MIT are usually straightforward. “Copyleft” licences such as the GPL can require you to release your own source code if you distribute software that includes it. Keep an inventory of components and their licences.

Fixing ownership gaps

• Identify everyone who has written code, including past contractors and founders.
• Obtain written deeds of assignment, including moral rights consents.
• Update contractor and employment agreements for future work.
• Record ownership in a simple IP register.

Frequently asked questions

Does paying a developer mean I own the code?

Not by itself. Unless the developer is your employee acting in the course of employment, copyright usually stays with the developer unless it is assigned to you in writing.

Does a copyright assignment have to be in writing?

Yes. An assignment of copyright in Australia must be in writing and signed by or on behalf of the owner.

What is background IP?

Pre-existing code, tools or libraries a developer brings to a project. Contracts usually license background IP to the client rather than assigning it.

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