Ownership of Code?


I recently contracted with a developer to build a mvp for the business. We were operating on an understanding that we would own the code upon completion of version 1.0. Now, their legal team has stated that they will not be turning over the code, instead they will give us a license to it

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asked Dec 28 '11 at 02:22
Eric Littleton
107 points
  • And your question is? – Ross 12 years ago
  • what does the agreement state? – Tim J 12 years ago
  • Who is "we" in "we would own the code"? The developer and you? Or your company, not including the developer? – Alain Raynaud 12 years ago
  • The developer was a third party. Throughout the project we were informed that we were going to own the code as the contract was being prepared. Then found out that we would be issued a license in lieu of owning the source code due to the fact that it tied in to many of their background tools. – Eric Littleton 12 years ago
  • So the question is, what to do now. We have a good relationship with the developer but I am wary of, in the scenario their is an interest to acquire our company/raising money, we aren't able to say that we own the product. Was wondering if anyone has been in a similar situation. – Eric Littleton 12 years ago

3 Answers


It would indeed seem that they were not operating with the same understanding as you at all. I hate to sympathize with their position, but without seeing the contract nor hearing the conversations or e-mails between you I don't know how someone can advise you. One of the factors determining their reluctance to give you the source code, is if they are also producing a similar product for someone else (ie, this is a "customization.") or whether they would be unable to produce a similar product for the next customer. I am sure that protecting their options in the future is a part of their rationale. Think about it, if they give you the source code, you could also take it to a competitor who could then copy their methods in support of THE DEVELOPER'S COMPETITORS.

It should be clear by now that you ought to have insisted on getting the Source Code as part of the software license agreement (SLA). It sounds to me as though what they are doing is standard practice unless otherwise specified. Lots and lots of consulting companies build products and license to those products to their customers. For most customers, that suffices. I am not sure what it means down the road if this company goes out of business and you need advanced support. Probably it means you would be hurt, unable to get support and unable to continue. So ask them what are the assurances you can get from them that if they are not there to support future enhancements ot platform changes, what can you do - would they be willing to give you the Source Code in that future scenario.

answered Dec 28 '11 at 06:58
21 points


Have you paid them any money? Do you have the source code?

If you have paid them money and not gotten what you bargained for, then you my friend have purchased a pig in a poke.

If you have not paid them, don't unless and until they deliver what they promised. If they are unwilling, get someone else to build it for you.

You state that they have a legal team, do you? It may simply come down to who has the best lawyers and who is willing to spend the most money on lawyers.

It may be better to simply cut your losses and move on.

answered Dec 28 '11 at 07:20
Jonny Boats
4,848 points


It does seem the understanding you had going into the situation changed after the work was produced. Unless you had the original understanding codified in a contract, the developer is fully within their rights to issue you a license to the work rather than full ownership. Especially when building MVPs, it's important to have issues of IP ownership solved ahead of creation rather than after creation. IP ownership is automatically conferred to the creator of the work. You may want to discuss terms for your purchase of the IP outright now that it is built, but the developer is certainly within their rights.

answered Oct 1 '12 at 20:51
101 points

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