Blog · Contracts · 11-min read
Who Owns Code Written by a Contractor? IP Assignment Guide
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Paying a contractor, receiving a ZIP file, or having administrator access to a GitHub repository does not by itself answer who owns the copyright in the code. Ownership, access, licensing, and delivery are separate issues. A sound agreement and a verifiable handoff have to address all four.
Legal note: This article provides general information about U.S. law and software contracting, not legal advice. Copyright, patent, employment, tax, and contract rules depend on the facts and jurisdiction. Have qualified counsel review the agreement for your project.
Last substantive review: August 2026.
17 U.S.C. § 201 starts with the rule that copyright vests in the author. An employee's work created within the scope of employment may be a work made for hire, in which case the employer is treated as the author. An independent contractor is different. Unless the work qualifies under the narrower commissioned-work route or the contractor signs a valid transfer, the client should not assume it owns the copyright.
A copyright transfer generally must be in a writing signed by the owner of the rights, under 17 U.S.C. § 204. That is why a contractor agreement should contain an actual IP assignment drafted for the project, not only payment terms, confidentiality language, or a promise to deliver source code.
17 U.S.C. § 202 makes the separation concrete: ownership of a copyright is distinct from ownership of the material object containing the work. In software terms, possession of a laptop, archive, or repository copy does not itself transfer copyright.
The U.S. Copyright Office's computer-program guidance explains that copyright can protect copyrightable expression embodied in a computer program. It does not protect the underlying ideas, program logic, algorithms, systems, methods, or concepts. That distinction matters because a contract may need to address more than copyright: confidential information, data rights, trademarks, domain names, patentable inventions, and operational assets may require separate provisions.
Patent applications and patents have their own assignment rules. 35 U.S.C. § 261 provides for assignment by a written instrument. Counsel should decide whether invention-assignment, further-assurance, and recordation provisions are needed for the work.
The statutory definition in 17 U.S.C. § 101 has two routes. The first covers a work prepared by an employee within the scope of employment. The second covers specially ordered or commissioned work only when it falls within one of nine listed categories and the parties sign a written work-made-for-hire agreement.
Computer programs are not named as a standalone category in that commissioned-work list. Some software deliverables may raise questions about a listed category or about whether a contributor is legally an employee, but a contract should not assume that adding the phrase “work made for hire” resolves the issue.
The U.S. Copyright Office's Circular 30 explains the employee and commissioned-work tests. In Community for Creative Non-Violence v. Reid, the U.S. Supreme Court used common-law agency factors to distinguish an employee from an independent contractor. A client's direction over the desired result does not automatically turn a contractor into an employee.
The practical response is an express assignment as a backstop, drafted by counsel for the deliverables and rights involved.
There is no universal clause that is right for every software engagement. A well-drafted agreement usually resolves these questions:
Counsel often distinguishes a present assignment from a future promise to assign. The exact verbs matter, as do governing law and the rights being transferred. Do not copy a clause from an unrelated template and assume it closes the chain of title.
Contractors often bring code, libraries, deployment scripts, templates, know-how, or internal frameworks created before the engagement. That background IP should be disclosed rather than mixed silently into the deliverables.
A useful schedule identifies each background component, its owner, its function in the product, and the license the client receives. The business team should ask whether the product can be maintained, sold, transferred, or hosted by another provider if that component remains contractor-owned.
One clean model is to separate materials into four buckets:
The schedule is more useful than a sweeping sentence because engineering and diligence teams can trace what the product actually contains.
A contractor cannot give the client exclusive ownership of code the contractor received under an open-source or commercial license. The agreement should require an inventory of third-party components and compliance with their license conditions.
At minimum, record the component name, version, source, license, whether it was modified, where it is used, and any notice or source-distribution obligation. Approval rules may be needed for strong copyleft licenses, source-available licenses, or packages with unclear provenance.
A software bill of materials can make this inventory maintainable. NIST's SBOM guidance describes an SBOM as a record of software components and their supply-chain relationships. An SBOM does not resolve every license question, but it gives security, legal, and engineering teams a shared list to review.
When a contractor uses a coding assistant or generative model, ask for more than a general statement that AI was used. The project record should identify approved tools, material AI-generated contributions, the person who reviewed them, applicable provider terms, and the checks used for security, correctness, and third-party similarity.
The U.S. Copyright Office's AI copyrightability report concludes that copyrightability depends on sufficient human authorship; prompts alone do not supply that authorship. Applying those principles to a specific codebase is fact-dependent, and service terms and third-party claims create separate issues.
A practical AI code inventory can include:
This is not paperwork for its own sake. A later buyer, investor, insurer, or enterprise customer may ask how the code was created and whether the company has the rights and records needed to ship it.
An agency can transfer only the rights it has obtained. If a subcontractor writes part of the system but never assigns the relevant rights, the agency's client agreement may not cure the missing link.
Require a contributor roster and written downstream agreements before work begins. The prime vendor should confirm that each contributor is bound by confidentiality, IP-assignment, security, and third-party-code obligations consistent with the client contract. The client should also know whether subcontracting needs prior approval and which jurisdictions are involved.
At handoff, obtain a certification that the contributor list is complete and that the vendor has secured the rights needed to perform its assignment. For material acquisitions or financing, counsel may request copies or summaries of the underlying agreements.
Legal ownership is hard to use if the company cannot build, deploy, or maintain the product. The handoff should cover both rights and operating control.
Acceptance should include a clean build and a test deployment performed from client-controlled systems, not only the existence of files in a repository.
For Horizon Labs engagements governed by its U.S. contract, project IP is assigned to the client, and engineering work can be delivered in a client-owned GitHub repository. That pairs the legal transfer with day-to-day access and an auditable contribution history.
Prospective clients should still review the operative agreement for their project, including any background IP, third-party software, or special delivery terms. To review the engineering and handoff model, see how Horizon Labs works and its strengths and capabilities.
If you need senior engineers to take over an existing codebase or clear a difficult backlog, request a codebase takeover assessment. Horizon Labs can review repository control, build and release access, contributor records, and handoff readiness; qualified counsel should review the agreement and chain of title.
The contractor is often the author and initial copyright owner unless the code qualifies as a work made for hire or the contractor signs a valid assignment. The result depends on the contributor's legal status, the work, the agreement, and other facts, so the client should have counsel confirm the chain of title.
No. Payment and repository access can satisfy commercial and delivery obligations, but they do not by themselves transfer copyright. Under U.S. law, a copyright transfer generally requires a signed writing that identifies the rights being conveyed.
Not always. Commissioned work must fit one of the statutory categories and be covered by a signed work-made-for-hire agreement. Because computer programs are not a standalone category in that list, software contracts commonly use an express IP assignment as a backstop.
It should identify the assigning parties, project deliverables, covered rights, transfer timing, background IP, third-party components, subcontractors, licenses, representations, and further-assurance obligations. Counsel should tailor the language to the project and governing law.
Maintain an inventory of open-source, commercial, and material AI-generated components; record applicable licenses or service terms; require human review; and document provenance, security checks, and approvals. The assignment should not claim exclusive ownership of third-party material the contractor does not own.
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