Here is the assumption that causes the most trouble in technology businesses: we paid for it, so we own it.
Paying a contractor does not by itself transfer copyright and other IP rights to the customer. A contract heading, an invoice or a payment record does not establish that the rights moved. What matters is the operative assignment or licence wording, and the underlying chain of contributions behind it.
Most businesses discover this during a funding round or a sale, which is the worst possible time.
Start with an inventory. It should extend beyond source code to object code, architecture, documentation, databases, interfaces, designs, brands and confidential know-how.
Link each asset to its creator, creation date, repository and supporting agreement. If you cannot do that for a commercially important component, you have found your first gap.
Founders, employees, contractors, vendors and third-party materials. Each category behaves differently.
Work created by a founder before incorporation, or outside formal employment, may remain with that individual unless it was effectively transferred or licensed. Employment can affect ownership, but the result depends on the work, the duties, the circumstances and applicable law. It is not automatic in every case.
Contractors are the biggest exposure. Does each contractor agreement contain an effective written assignment or a suitable licence? And are subcontractors and offshore developers covered by consistent obligations? A clean assignment from your development agency means little if the agency’s own subcontractors never assigned anything to it.
A developer usually brings frameworks, libraries, tools or templates built before your project. That is normal and often sensible.
But is that pre-existing IP specifically identified, rather than broadly assumed? And does your business receive the rights it needs to use, modify, host and commercialise it? A licence that permits use but not modification can stop you maintaining your own product.
On the deliverables, ownership language should cover the full set, not just a general reference to the finished product. Source code, object code, documentation, tests, designs and databases. Check it extends to future versions, updates, adaptations and derivative materials.
You can own software completely and still be unable to run your business.
Does your business control the repositories, credentials, build pipelines and signing keys? Are delivery, backup, escrow, handover and documentation obligations adequate? This becomes urgent the moment a developer relationship ends badly, which is exactly when you will not get cooperation.
Individual creators can hold moral rights separately from copyright ownership, and commercial use may require appropriate written consents. It is a small clause that is easy to include and awkward to fix later.
Open-source licences deserve real attention. They can impose attribution, source disclosure, distribution or licensing obligations that affect how you commercialise. Do you have an accurate software bill of materials? Have the licence obligations been reviewed against your actual distribution model? A copyleft licence in the wrong component can force disclosure of code you intended to keep proprietary.
Fifteen issues across ownership and contributors, development and confidentiality, and dependencies and commercialisation. Includes a tracker to mark each area documented, unclear or requiring action.
Can your business produce a complete chain-of-title file for an investor or a purchaser, today, without scrambling?
If the answer is no, that is the work. Funding rounds, acquisitions and disputes all expose the same gaps in ownership records, contributor agreements and third-party permissions. Fixing them under a deal timetable costs far more than fixing them now, and sometimes it cannot be fixed at all if a contributor has moved on.
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If you are heading into a raise, a sale or a dispute, audit the chain of title early. Call us on (02) 8201 0051. Leo Lawyers advises technology companies and startups on software ownership, IP agreements, licensing and disputes in New South Wales and Victoria.
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