Who owns the source code of bespoke software?

The default position in the UK

This page describes the general position and is not legal advice.

Under the Copyright, Designs and Patents Act 1988, the first owner of copyright in a piece of work is its author. There is one main exception: work made by an employee in the course of their employment belongs to the employer, unless agreed otherwise.

A software company or freelance developer that you commission is not your employee. Copyright in the code it writes therefore starts with the supplier, even though you specified the system and paid for it. Ownership moves to you only through an assignment, and an assignment of copyright is not effective unless it is in writing and signed by or on behalf of the party giving it up.

Where there is no assignment, a client will usually still have some right to use what it paid for. How far that right goes is uncertain, in particular whether it lets you change the code or hand it to another supplier. That is the point on which to take advice.

What to look for in the contract

An assignment clause. Wording that says the intellectual property rights in the software are assigned to the client. Check when it takes effect. Many contracts make assignment conditional on payment in full.

A licence in place of an assignment. Some suppliers keep ownership and grant the client a licence. Check whether the licence lets you modify the code, whether it lets another supplier work on it for you, and whether it can be withdrawn.

The supplier’s own components. Suppliers often bring existing code of their own and keep ownership of it, licensing it to you as part of the system. Open-source and third-party components come with their own licences.

Delivery of the source code. Owning the copyright and holding a copy are different things. Look for a clause that requires the supplier to hand over the current source code, on request or at set intervals.

Subcontractors. A supplier can only assign what it owns. If it used freelancers, its contracts with them matter too.

If there is no written contract at all, which is common where one developer has looked after a system for years, take advice and consider asking for a written assignment while the relationship is good.

What to hold regardless of ownership

Whatever the contract says, an organisation that depends on a bespoke system should hold four things itself.

• The current source code, in a repository the organisation controls.
• Administrator access to hosting, domain names and third-party services, in the organisation’s name and not an individual’s.
• A recent backup of the data, stored somewhere the supplier does not control.
• Documentation of how the system is built and released.

Asking for these is routine and need not signal that you plan to leave. A clear right to code that nobody can find is of little practical use.

Clients of CodeFirst own the source code, accounts and documentation, which we keep in a state another team could pick up. If you are preparing to move a system, our software takeover checklist lists what to gather, and our page on changing software supplier covers the order to do it in.