Almost every founder assumes the same thing: I paid for it, so I own it. In the United States, between an employer and an employee, that is broadly right. Across borders, with contractors, it is frequently wrong — and the moment you discover it is usually the moment an acquirer's lawyer asks for the chain of title.

This is not a theoretical risk. It is the most common issue found in technical due diligence on companies that used offshore teams, and it is expensive precisely because it can only be fixed by tracking down every person who ever contributed.

Why "work for hire" does not travel

US copyright law treats work created by an employee within the scope of employment as owned by the employer automatically. For independent contractors, that automatic transfer applies only to a narrow list of categories — and custom software is not clearly among them. Which means with contractors, ownership transfers only through an explicit written assignment.

Now cross a border. Many civil-law jurisdictions recognise moral rights that cannot be assigned at all, and some restrict blanket assignments of rights in works that do not yet exist. A clause that works perfectly in a Delaware contract can be partially unenforceable where the developer actually lives and works.

Where the chain of title actually breaks

Your agreement with the vendor is usually fine. The break is one level down:

• The vendor engages individual contractors, not employees, and their contracts contain a confidentiality clause but no IP assignment.
• The vendor subcontracts part of the work to another company, and that agreement was never checked.
• A freelancer was paid through a marketplace whose default terms assign IP only on full payment — and one invoice was disputed.
• Someone contributed before any contract was signed. Early prototype code has a way of surviving into production.
• An engineer used code they had written previously under a different employer, or open-source code under a licence incompatible with your commercial use.

Any one of these breaks the chain. And because software is cumulative, a single unassigned contribution from year one can encumber everything built on top of it.

What a defensible arrangement looks like

You do not need to be a lawyer to demand these. Ask for them in writing before the first commit:

1. A present assignment of all IP, with a waiver of moral rights where waivable, and a fallback perpetual worldwide licence where they are not.
2. A warranty that every individual contributor is under an equivalent assignment, plus the vendor's obligation to produce those agreements on request.
3. A prohibition on subcontracting without written consent.
4. Assignment triggered on payment of each invoice, not on project completion — so a dispute over the final phase never clouds title to the first ten.
5. An open-source policy: a list of every dependency and its licence, delivered with the code, with copyleft licences excluded from your distributed product unless approved.

The structural fix

Clauses help, but structure helps more. If your counterparty is a US entity, your contract is governed by US law, and that entity — not you — carries the obligation to have clean assignments from everyone downstream, then you have one place to enforce against and one party responsible for the entire chain.

That is the difference between owning your code and owning a promise about your code.

If you already have a problem

It is fixable, and it is much cheaper to fix now than during a diligence process with a deadline. Inventory who contributed and when, obtain confirmatory assignments from anyone missing one, run a dependency licence audit, and document the result. Most companies can close this in a few weeks if they start before someone else asks.

You do not own your product because you paid for it. You own it because someone can prove, person by person, that it was assigned to you.

Every LaunchWe contract is governed by US law, assigns IP on payment rather than completion, and warrants the assignment of every contributor upstream. If you want your current arrangement reviewed, we will tell you plainly whether it holds.