If a member of your staff writes software as part of their job, the good news is that, in most cases, your business automatically owns the copyright in it. But "during office hours" is not quite the legal test, and there are important exceptions, especially around contractors. Here is how ownership of employee-created software works in England and Wales.
The default rule: employers own employees' work
Software is protected by copyright, and copyright in a work created by an employee in the course of their employment belongs to the employer, unless there is an agreement to the contrary (Copyright, Designs and Patents Act 1988, section 11(2)). So where a developer you employ writes code as part of their role, the company is the first owner of the copyright in that code automatically, no assignment needed.
"In the course of employment", not just "during office hours"
The real test is whether the work was created in the course of employment, not simply whether it was done in office hours. That usually means the work falls within the duties the employee was employed to do. Some edge cases need thought:
- Side projects an employee creates entirely on their own time, on their own equipment, and outside their job duties, may belong to the employee, not you.
- Using work time or resources for a personal project blurs the line and can create disputes.
A clear contract and IP policy help avoid arguments about which side of the line a piece of work falls.
The big exception: contractors and freelancers
This is where businesses get caught out. The section 11(2) rule applies to employees. If software is written by a contractor, freelancer or another company, the creator usually owns the copyright, even though you commissioned and paid for it. Paying for development does not automatically transfer ownership.
To own software created by a contractor, you need a written assignment of the copyright, signed by the contractor (CDPA 1988, s 90). Always put this in the contract before the work starts.
Don't forget moral rights and other rights
- Moral rights (such as the right to be identified as author) cannot be assigned, but they can be waived, worth including in your agreements. (Note that some moral rights do not apply to computer programs.)
- Software may also involve databases, confidential information and third-party or open-source components, make sure these are properly handled.
Best-practice IP clauses
- In employment contracts, confirm that IP created in the course of employment belongs to the company, with an obligation to assist in protecting it.
- In contractor agreements, include an express assignment of all IP (and future IP) plus a moral-rights waiver and further-assurance clause.
- Keep records of what was created, by whom, and under which agreement.
Key takeaways
- Copyright in software created by an employee in the course of employment belongs to the employer automatically (CDPA 1988, s 11(2)).
- The test is "in the course of employment", not merely "during office hours", genuine side projects may belong to the employee.
- Contractors usually own what they create, get a written assignment (s 90); paying is not enough.
- Use clear IP clauses in employment and contractor agreements, and address moral rights and open-source components.
Sources
- Copyright, Designs and Patents Act 1988, sections 11(2) (employee works) and 90 (assignment in writing)
- The law on "in the course of employment" and commissioned works
- Moral rights provisions (CDPA 1988) and their application to computer programs
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.