Copyright Law in IT. What You Need to Know to Avoid Losing Rights to Code

Without the right clauses, you risk losing rights to code, disputes with clients or collaborators, and real financial losses. Below are practical rules: how moral rights differ from economic rights, when to license rather than assign rights, and how to protect yourself in agreements with employees, B2B contractors and service providers.

Two types of copyright: moral and economic rights

Copyright law defines the relationship between a creator and the work they create. It regulates who may use the work, on what terms, and who receives the benefits. In practice, it distinguishes two categories of rights, each governed by different rules.

Economic rights

Economic rights concern the commercial use of a work and the ability to earn from it.

• They are transferable, so they may be assigned to another party under an agreement.
• They allow commercial use, giving the rights holder control over commercial exploitation of the work.
• They may be licensed, so an assignment of all rights is not always necessary.

Moral rights

Moral rights protect the creator’s relationship with the work. They include:

• the right to be identified as the creator;
• the right to make the work available to the public for the first time;
• the right to supervise how the work is used.

Moral rights cannot be transferred. They also do not expire with time.

Why moral rights matter in IT

Although moral rights cannot be assigned, an agreement can address their exercise. A creator may agree not to exercise them, for example by not requiring attribution in code delivered to a client. Without such terms, the creator remains free to exercise those rights.

How to assign economic rights

There are two options: assign the rights in full or grant a license. Each requires a different approach and provides different options.

Copyright assignment: what you need to know

An assignment is a permanent transfer of all economic rights to a work, such as source code or a portion of it. After the agreement is concluded, the acquirer may use the work as if they were its creator.

In practice, the acquirer:

1. may grant licenses to other parties;
2. may transfer the rights onward, for example to the end client;
3. takes control of the work’s commercial exploitation.

Written form is mandatory. An agreement assigning copyright must be in writing. Oral, email or messaging-app arrangements are not enough. An agreement without written form is invalid by operation of law. This is a common mistake in IT.

License: what it is and how to grant one

A license permits use of a work within a specified scope without transferring ownership of the rights. The creator remains the owner of the economic rights.

The licensee:

• may use the work within the scope defined in the agreement;
• may grant a sublicense, but only if the agreement allows it;
• may not sell or assign the rights to the work.

Exclusive and non-exclusive licenses: the difference

When to choose a license and when to assign rights

There is no single answer. The choice depends on your business model and your role in the project.

Choose a license if:

• You are building a SaaS product or application for many users. Each user receives a license while you retain the rights.
• You want to develop, modify and make the work available to other parties.
• You need flexibility, since you can grant a non-exclusive license to several parties at the same time.

Choose an assignment if:

• You run an IT company and acquire rights from collaborators so you can continue developing the solution yourself.
• You create part of a larger work commissioned by a client, and an assignment lets you later license or transfer the rights to the end client.
• You need full control over the work without license restrictions.

What every copyright agreement should include

Whether you assign rights or grant a license, address:

1. Scope of rights: which rights are assigned or licensed.
2. Fields of exploitation: how the work may be used, such as by copying, modifying, public distribution or other specified means.
3. Compensation: the amount, payment date and settlement terms.
4. Transfer timing: whether rights transfer on signing, acceptance of the work or payment.
5. Moral-rights terms: whether the creator agrees not to exercise those rights.

Copyright and the form of employment

How rights are acquired depends on the agreement between your company and the creator. This is a common source of problems, especially when contract terms are missing.

Employment agreement

The employer acquires economic rights to a work created by an employee as part of their job duties. This occurs by law, without a separate agreement.

However, the employment agreement should still specify:

• the employee’s duties precisely, so there is no doubt whether a work was created “as part of their duties”;
• a sufficiently broad right to use the work;
• the right to further dispose of the work, for example by assigning rights to a client.

If the job duties are described only in general terms, a dispute may arise over whether the code passed to the employer automatically.

B2B agreement

In a B2B relationship, copyright does not transfer automatically. The agreement must expressly address it.

A B2B agreement should include:

1. An express copyright assignment to your company, or a sufficiently broad license.
2. The time of transfer, for example on acceptance or payment.
3. Fields of exploitation, specified in detail rather than in general terms.
4. Compensation terms for the assignment, separate from or included in the service fee.
5. A commitment concerning moral rights.
6. Contractor liability if the work infringes third-party rights.

Contract for specific work and mandate agreement

As in a B2B relationship, the client does not acquire copyright automatically from the contractor. The agreement must provide for an assignment. Without that clause, rights remain with the creator, even if you have paid for the work.

Checklist: agreement form and invalidity risk

Before signing any agreement concerning copyright, check that:

• A copyright assignment is in writing. Otherwise, the agreement is invalid.
• An exclusive license is in writing under penalty of invalidity.
• A non-exclusive license need not be in writing, but written form is strongly recommended for evidence.
• Fields of exploitation are expressly listed. If they are not, the acquirer or licensee cannot use the work in unspecified fields.
• Compensation is set out in the agreement. Leaving it open may lead to a payment dispute.

What to do now

If you run a software house or a development team:

1. Review current agreements with employees, B2B contractors and service providers. Check whether they address copyright assignment or licensing.
2. Verify the form of the agreements, including whether assignments and exclusive licenses are in writing.
3. Clarify job duties in employment agreements so it is clear which works pass to the employer automatically.
4. Add terms concerning moral rights, including the creator’s commitment not to exercise them where needed.
5. Set a contract standard for copyright clauses in all new agreements.

Each month without clear copyright terms is a period when code developed for your company may formally not belong to you. Organizing the documents sooner can reduce the risk of a dispute over software rights.

Frequently asked questions

What is the difference between moral and economic rights in code? Economic rights can be assigned or licensed and used commercially. Moral rights protect the creator’s relationship with the work, including attribution. They cannot be transferred or waived, but the creator can agree not to exercise them.

When should I license software and when should I assign copyright? A license may fit a SaaS product or application for multiple users: you retain ownership and license use. An assignment may fit when you acquire code from collaborators and need full control to develop it, sublicense it or transfer it to an end client.

Must copyright in code always be assigned in writing? Yes. An agreement assigning economic copyright must be in writing under penalty of invalidity. Oral, email or messaging-app arrangements are not enough.

Do copyright rights in code transfer automatically in a B2B relationship? No. The agreement must expressly provide for an assignment or license, fields of exploitation, transfer timing and compensation. The same applies to contracts for specific work and mandate agreements. Without appropriate terms, rights remain with the creator even if you paid for the code.

What should an agreement include to protect copyright in software? Address five elements: scope of rights, fields of exploitation, compensation and settlement terms, transfer timing, and the creator’s commitment concerning moral rights. Omitting any may lead to a dispute. For example, without specified fields of exploitation, the acquirer cannot use the work in unspecified fields.