The contractor who built your software still owns it

Under U.S. copyright law the author owns the code. Whether your developer was an employee turns on common-law agency factors, not on a 1099, and commissioned software almost never qualifies as work made for hire. A contract recital rarely cures that. A signed written assignment from the contractor does.

Who owns the software a contractor built for my company?

The contractor owns it. Copyright vests in the author when code is fixed in tangible form, and an independent contractor is the author of what he writes. Your company owns that software only if the contractor signed a written transfer. Paying the invoice transfers nothing. Neither does holding the repository.

The exception is employment, not payment. A work prepared by an employee within the scope of employment is a work made for hire, and the employer is treated as the author unless a signed writing says otherwise. The Supreme Court set the employee test in Community for Creative Non-Violence v. Reid: a nonprofit commissioned a sculptor, directed the concept, paid, and claimed ownership. Applying common-law agency factors — control over the manner of work, tools, location, duration, payment, tax treatment, benefits — the Court held the sculptor an independent contractor, so the statue was not made for hire. It remanded to decide whether the two were joint authors — the question your employees’ contributions can raise.

Apply those factors to a developer who used his own laptop, set his own hours, invoiced monthly, and took a 1099. Not an employee, so not work made for hire. The label is evidence, not the answer: a worker you call a contractor can still be an employee at common law.

Law: 17 U.S.C. 101, 201(a)-(b), 204(a); Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989).

Does a “work made for hire” clause in the developer agreement fix it?

A work-made-for-hire clause usually does not fix contractor-built software. The statute treats specially ordered or commissioned work as made for hire only if it falls inside nine listed categories and the parties signed a written agreement saying so. Custom software is not one of the nine, so the label alone moves nothing.

The nine categories are narrow and historical:

• a contribution to a collective work
• a part of a motion picture or other audiovisual work
• a translation
• a supplementary work
• a compilation
• an instructional text
• a test
• answer material for a test
• an atlas

Read the list again and look for software. It is not there. Code can occasionally ride inside a category, as part of a game or other audiovisual work, and even then a signed agreement is required.

So the cure is an assignment. A transfer of copyright is invalid unless it is in writing and signed by the owner of the rights conveyed or an authorized agent, and time does not supply that signature. Read the whole clause before concluding you have nothing: many forms pair the recital with fallback assignment language, and if that language is present-tense it is doing the work the recital cannot.

There is a second reason not to lean on the label. In California, commissioning a work under a signed agreement that calls it made for hire and gives you all copyright rights can make you that contractor’s statutory employer for workers’ compensation and unemployment insurance. Free protection becomes a payroll tax exposure. That is the position as of September 2026.

A work-for-hire recital in a contractor agreement is a label. An assignment is a transfer. Only one of them moves the copyright.

Law: 17 U.S.C. 101; 17 U.S.C. 204(a); Cal. Lab. Code 3351.5(c); Cal. Unemp. Ins. Code 686.

What intellectual property will a buyer make me prove I own?

Buyer diligence on intellectual property is an ownership chain, not an inventory count. The question asked of every asset is the same: who created it, were they an employee or a contractor, and where is the signed paper that moved the rights. Source code, the website, logos, photography, and engineering files each get that treatment separately.

One more practical point. Registration must have been made — the Copyright Office having acted on the application — before an infringement suit over a U.S. work can be filed, though a refusal lets you sue on notice to the Register. Statutory damages and fees are unavailable unless registration came before the infringement began or, for a published work, within three months of publication. That is the reason to register early.

Law: 17 U.S.C. 411(a); 17 U.S.C. 412; Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 139 S. Ct. 881 (2019).

Do patent rights work the same way as copyrights?

Patent rights start with the individual inventor, including an inventor on your payroll, and they move by written assignment or by operation of law. Wording matters here more than anywhere else. A promise to assign future inventions is not an assignment. A present-tense conveyance is. Two employment forms can look identical and produce opposite results.

That is the drafting lesson of the Stanford v. Roche litigation. A researcher signed a university agreement in which he “agreed to assign” his rights, then a company visitor’s agreement in which he “will assign and does hereby assign” them. Following its earlier FilmTec rule, the Federal Circuit treated the second as a present transfer that took title the moment the invention existed; the first was a promise needing a further act. The Supreme Court affirmed on the narrower ground that the Bayh-Dole Act does not vest title in a federally funded institution, because rights begin with the inventor. Stanford lost the patents.

Two qualifications. An employee hired specifically to invent may owe an equitable duty to assign, and an employer whose materials went into the invention may hold a shop right, a license to practice it. Neither is title.

So read your forms for “hereby assigns,” and treat “agrees to assign” as an open item. Then record executed assignments at the Patent and Trademark Office: an unrecorded assignment is void against a later purchaser or mortgagee for value without notice unless recorded within three months of its date or before that purchase.

Law: 35 U.S.C. 261; Stanford v. Roche Molecular Systems, Inc., 563 U.S. 776 (2011), aff’g 583 F.3d 832 (Fed. Cir. 2009); FilmTec Corp. v. Allied-Signal Inc., 939 F.2d 1568 (Fed. Cir. 1991).

Can I transfer the brand name and logo separately from the business?

A trademark assignment must carry the goodwill of the business symbolized by the mark. The Lanham Act makes a mark assignable with that goodwill, and courts treat an assignment stripped of it — an assignment in gross — as invalid. A holding company that owns the mark while an operating company uses it is worth checking early.

Four details that matter in closings:

• The instrument must be in writing and duly executed, and should say that the goodwill of the business symbolized by the mark goes with it.
• An intent-to-use application cannot be assigned before an amendment to allege use or a statement of use is filed, except to a successor to the applicant’s ongoing business to which the mark pertains.
• Record it. An unrecorded assignment is void against a later purchaser for value without notice unless recorded within three months of its date or before that purchase.
• A holding company’s license to the operating company needs real control over quality; use by a related company inures to the owner, but a license without control risks abandonment.

Law: 15 U.S.C. 1060(a); 15 U.S.C. 1055; 15 U.S.C. 1127.

Who owns the domain name, the ad accounts, and the social handles?

Domain registrations, advertising accounts, app store listings, and social handles are controlled by the named registrant or account holder and by the platform’s own terms, not by your bill of sale. A registrar account opened under a former marketing manager’s personal email is a real closing problem. So is a repository organization owned by a developer’s personal account.

Move each account into a company email address and admin seat now, using the platform’s transfer process. Courts have treated a domain registration as property that can be converted, but a platform account is only a contract right on the platform’s terms, and the keys sit with whoever is named on it.

Law: Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003).

How do I get a signature from a contractor who left years ago?

The instrument is a confirmatory assignment: a short document in which the former contractor confirms that everything created for the company was assigned, and assigns it again as of today, for stated consideration that you actually pay. It is routine paper. It stops being routine the moment the signer learns you are selling.

Sequence matters more than drafting. Start while the business is quiet, run it as records maintenance, and do not attach it to a diligence list with a deadline. A signer approached in March, with no context, is asked for housekeeping; the same signer in October, after hearing a broker is running a process, has learned his signature is worth something. One limit: the document conveys only what the signer still holds, so ask whether he licensed the work to anyone else.

I read the signed developer agreement before I read the code, and I ask for the signature page and the assignment clause before I ask what the software does.

One footnote, worth knowing and not worth worry. A grant executed by an individual author on or after January 1, 1978 can be terminated by that author during a five-year window opening thirty-five years after execution, or, if the grant covers publication rights, thirty-five years after publication or forty after execution, whichever ends earlier. It is not automatic: the author must serve notice two to ten years before the effective date and record it. Works made for hire are outside the right.

Law: 17 U.S.C. 203.

What if I cannot get the signature before closing?

An unclosable ownership gap becomes a disclosure, not a secret. Put the specific asset, the missing signature, and the reason on the disclosure schedules, describe what use the company has made of the work and for how long, and let the buyer price it. A gap disclosed is a negotiation.

The same gap found in diligence is a retrade, and it moves more than price. Expect one of these:

• A special indemnity for that asset, carved out of the general cap and the deductible
• A holdback, or an offset against your seller note, released when the assignment arrives; at this deal size that is the ordinary mechanic, and a separately funded escrow for one asset is not
• A closing condition requiring the signature, which hands the former contractor leverage over your closing date
• A price cut reflecting the cost of rewriting the code or rebuilding the asset

Someone will suggest that long use and delivery of the code create an implied license. Sometimes it does: courts have found an implied nonexclusive license where a developer wrote custom code at the customer’s request, delivered it, and knew it would be used, and paid fees can make that license broad and hard to revoke. It is a defense, not a title: it does not let you stop a competitor, register, or sue, or sell more than you hold.

Law: 17 U.S.C. 101 (nonexclusive license); Effects Associates, Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990); Asset Marketing Systems, Inc. v. Gagnon, 542 F.3d 748 (9th Cir. 2008).

What should I do in the next thirty days?

Ownership cleanup is a document exercise, and it runs fastest before a sale is visible. Build the list of created assets, name the human creator of each, classify that person as employee or contractor, and find the signed paper. Where the paper is missing, get a confirmatory assignment now, quietly, one signer at a time.

• List every material asset and name its creator. Sort creators into W-2 employees and everyone else; everyone else is a gap until proven otherwise.
• Pull the signed agreements and look for an assignment clause and a signature page, not a work-for-hire recital. Search your forms for “agrees to assign” and replace it going forward with a present assignment.
• Send confirmatory assignments as records maintenance, with consideration recited and paid.
• Inventory accounts — registrar, DNS, ad platforms, analytics, app stores, code hosting, social — and move each to company control.
• Record patent and trademark assignments; register the copyrights that matter, and hand every gap you cannot close to your deal counsel early.

Legal and tax positions in this article are stated as of September 2026.