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Legal glossary

Ownership of software and related material: Overview, definition, and example

Ownership of software and related material refers to who has the legal rights to software and everything connected to it—like source code, documentation, designs, user manuals, and updates. This clause in a contract makes it clear whether the creator, buyer, or client owns the software and its supporting materials.

In plain terms, it answers the question: “Who owns what after the software is developed or delivered?”

Software development often involves a lot more than just code. There's planning, testing, documentation, and ongoing support. If you’re hiring a developer or buying software, it’s critical to know who will own the software and the related materials once the project is complete.

Without this clarity, both parties might assume they have rights they don’t actually have. That can lead to disputes—especially if someone wants to reuse the code, sell the software, or modify it later.

For SMBs, this clause can protect your investment—or ensure you don’t accidentally give up valuable intellectual property.

Let’s say your business hires a freelance developer to build a custom scheduling tool for internal use. You pay for the development, but the contract doesn’t clearly state who owns the software.

Later, you discover the developer is offering the same tool to other companies—and you don’t have the rights to modify or resell it. Without a clear ownership clause, you may not have full control over software you thought you owned.

But if your contract included a clause transferring full ownership to you, you’d have the right to use, modify, or license the software however you want.

Here’s how this clause might appear in a software development agreement:

“All rights, title, and interest in and to the Software, including any source code, documentation, specifications, enhancements, and related materials developed under this Agreement, shall be the sole and exclusive property of the Client upon full payment. The Developer shall retain no ownership rights unless otherwise agreed in writing.”

Conclusion

Ownership of software and related material is a key clause in any software-related agreement. It makes sure there’s no confusion about who controls the finished product—and who can use or distribute it in the future.

If you're buying, building, or licensing software for your business, be sure this clause is clear and tailored to your goals. It helps avoid disputes, protect your rights, and ensure your investment works for you long after the software is delivered.

This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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