Your Developer Might Own Your Product. Here Is When That Is True and How to Fix It

Three contractors built your product. You paid all of them. You have been operating for two years and everything works.

But there is a question worth asking: who actually owns the code?

Under Irish and UK law, the answer might not be you.

The default you are probably not aware of

In Ireland and in the UK, the default rule for copyright is the same. The author owns the work they create.

For employees, there is an exception. Work created in the course of employment belongs to the employer — provided it was done as part of the employee's role.

Contractors are not employees. And the employee exception does not apply to them.

If you engaged a developer, a designer, a UX agency, or a technical writer as a contractor — rather than as an employee — the copyright in what they produced belongs to them, not to you. That is the default. The fact that you commissioned and paid for the work does not change it. The fact that you have been using it for two years does not change it. The default only changes if the contract says otherwise.

Most contractor contracts — especially early-stage ones, especially the informal ones, especially the verbal ones — do not say otherwise.

The four situations where this creates a real problem

Not every contractor arrangement surfaces as a problem. But these four patterns come up consistently in audits of early-stage software and product companies.

No contract at all. Work was done, money changed hands, nothing was written down. From a copyright perspective, the contractor owns everything they produced. Getting that assignment now requires their cooperation.

A contract exists but has no IP clause. A well-drafted services agreement that says nothing about intellectual property is, from an IP perspective, the same as no contract. Ownership reverts to the default. The contractor owns the work.

A clause exists but was never signed. Terms were sent, work began before they were returned. The unsigned clause may have limited value as a contractual instrument. This is more common than you would expect.

The contractor is based abroad. Irish or UK law may not govern the engagement. What counts as an assignment, what counts as valid execution, and what default rules apply may differ by jurisdiction. A retrospective assignment involving a contractor in another country requires specific legal advice and is not always straightforward.

What the audit finds

A codebase built across three contractors over 18 months, with no IP assignments in place, is not rare. It is one of the most common findings in audits of companies at pre-seed and seed stage.

What we typically see: a mix of verbal engagements, short-form agreements that say nothing about IP, one clause that was discussed but never executed, and one contractor whose email address no longer works.

The company has been trading. The product functions. Revenue is coming in. But the ownership structure of the underlying IP has never been formally established.

That works fine until it does not. Due diligence is the most common trigger, but it is not the only one. A competitor dispute, a licensing conversation, or a transaction of any kind will surface the same gap.

How to fix it — and the difference between easy and complicated

The fix depends on the relationship.

Current contractor, ongoing engagement: A written IP assignment deed executed now covers the work produced to date and future work under that engagement. This is the simplest case. It requires the contractor's agreement, which is usually easy to obtain while the relationship is active.

Past contractor, no current engagement, good relationship: A retrospective assignment deed is the right instrument. The contractor needs to sign it. If the relationship ended well and the contractor is reachable, this is usually achievable with a short explanation and a modest fee.

Past contractor, poor relationship or unreachable: This is where it gets complicated. Without their signature, you cannot formally transfer the copyright. Options include negotiation, legal proceedings to establish prior ownership on alternative grounds, or — in some cases — rebuilding the affected component. None of these is quick or cheap.

The earlier you address this, the more options you have.

The clause your next contractor contract needs

Going forward, every contractor agreement should include an IP assignment clause. It should:

• State that all IP in work produced under the contract is assigned to the commissioning company on creation

• Confirm the contractor has the right to assign it

• Be signed before work begins

One page, one clause. The cost of getting this right once is nothing compared to the cost of recovering ground after the fact.

An IP audit maps your current contractor ownership position — who built what, what agreements are in place, and where the gaps are. It also tells you what priority each gap deserves, and in what order to address them.

If contractors have built parts of your product and you have not checked the IP ownership, this is worth 60 minutes of your time. Book the free scoping call at 8bitip.com.