Software Ownership: Who Owns the Software You Develop?


Software Ownership: Who Owns the Software You Develop?

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SashaContent Manager

Sasha the Creator

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14 min read



In the early days of computing, software ownership was a clear-cut concept, often rooted in proprietary models where developers or companies had straightforward rights to their creations. 

Over time, as technology evolved, so did the framework of software ownership. The journey from physical boxed products to the intangible realm of digital downloads marked a significant shift. And now, according to OSSRA 96% of codebases audited this year contain open source components, underscoring the breadth of their use and the resulting importance of understanding code ownership. 

So let’s delve into this topic today to understand what it is and what it means for companies navigating this ever-changing landscape. 

On the spot

Software ownership refers to the rights and control an entity or individual holds over a software product. It is determined by intellectual property laws, encompassing copyrights, patents, and licensing agreements.

There are several software ownership types:

⦿ Proprietary Software
⦿ Open Source Software
⦿ Freeware
⦿ Shareware
⦿ Public Domain Software
⦿ Commercial Software
⦿ Custom or Bespoke Software
⦿ Software as a Service (SaaS)

But software ownership should not be confused with software license. Software ownership refers to holding the rights and control over a software product, while a software license grants specific usage permissions to a user without transferring actual ownership.

Of course, software ownership has certain complications, such as:

⦿ Two parties claiming the same software
⦿ Integration of third-party libraries and frameworks
⦿ Contractual difficulties
⦿ Usage of cloud-based tools and platforms

Conflicts with ownership and licenses have also arisen with major players in the digital world such as Oracle, Google, Apple, Microsoft, and SCO Group.

For our part, we share tips on how you can secure your use and ownership of code.

Interested? Welcome to read further!

Defining Ownership in Software Development

Defining software ownership

In brief, software ownership refers to the legal and ethical rights and responsibilities associated with the creation, distribution, use, and modification of software. 

From a legal standpoint, it is protected through various mechanisms such as copyright, patents, and intellectual property rights. These legal definitions provide individuals or companies with exclusive rights to their software, preventing others from using, copying, or distributing it without permission. 

But there is also a moral aspect to ownership. While legal ownership focuses on protection and control, this aspect delves into understanding the nuances of what it means to truly own software. This can involve acknowledging the collective effort and contributions of others in the development process and recognizing the communal nature of software creation. 

This moral versus legal dilemma becomes particularly pronounced in the world of open-source projects. Here, while individual contributions might be copyrighted, the overarching ethos is one of collaborative development and communal rights. We’ll review it in more detail below.

In essence, ownership in software transcends mere legal boundaries, often intertwining with collective ethics, shared values, and the very spirit of community collaboration.

Exploring Open Source Software

Open source software (OSS) represents a paradigm shift in the traditional modes of software development and distribution. By definition, OSS is characterized by its publicly accessible code, allowing anyone to view, modify, and distribute it. It is typically developed by a community of volunteers who collaborate and share their knowledge and expertise (Read our recent article - "Unlocking the Potential: 8 Benefits of Open Source Software for Businesses").

This transparency and collaborative environment allows to significantly enhance the software's capabilities. 

There are several advantages of using open-source software:

  • Firstly, it is cost-effective since it is freely available, eliminating the need for expensive licensing fees. 
  • Additionally, open source software tends to be highly customizable, allowing users to tailor it to their specific requirements and preferences. 
  • It also benefits from a large and active community of developers and users who provide support and regular updates, ensuring its security and reliability
  • (Read more on software development security in our article "How To Ensure Cyber Security In Software Development: 12 best practices for outsourcing").

When it comes to ownership, OSS presents a unique scenario. While individual contributors might retain rights over their specific contributions, the collective nature of OSS often means that users have the freedom to modify and distribute the software, but they are obligated to share those modifications with others. This ensures that the software remains open and accessible to everyone and prevents any single entity from taking exclusive ownership.

Types of Software Ownership

Types of software ownership

Software ownership can be categorized based on licensing models, development approaches, and the extent of rights granted to end-users. Here's a breakdown of the primary types:

Proprietary Software (Closed Source)

Ownership: Solely owned by an individual, group, or company that developed or commissioned the software.

Rights: Users typically purchase licenses to use the software but don't own the software itself. They can't modify or redistribute the code.

Examples: Microsoft Windows, Adobe Photoshop.

Open Source Software (OSS)

Ownership: Generally owned by the community or the individual/group that initiated the project. Contributions can be made by anyone, but the original licensor retains certain rights.

Rights: Users can view, modify, and distribute the code under the terms of open-source licenses.

Examples: Linux, Apache HTTP Server.


Ownership: Typically owned by an individual, group, or company.

Rights: Users can download, install, and use the software for free but might not be able to view, modify, or redistribute the code.

Examples: Skype, Adobe Acrobat Reader.


Ownership: Owned by an individual, group, or company.

Rights: Users can freely distribute copies of the software, but full functionality often requires payment. It's a "try before you buy" model.

Examples: WinZip (before becoming freemium).

Public Domain Software

Ownership: No one owns the software; it belongs to the public.

Rights: Anyone can use, modify, and distribute the software without any restrictions.

Examples: Early versions of the UNIX operating system.

Commercial Software

Ownership: Owned by a business entity.

Rights: Sold to end-users. Users receive a license to utilize the software but don't own it or its code.

Examples: Microsoft Office, AutoCAD.

Custom or Bespoke Software

Ownership: Depends on contractual arrangements between the developer and the client. The client usually requests the software for specific needs.

Rights: Defined by the contract. Typically, the client owns the resulting software, but this can vary.

Examples: Custom CRM systems, tailored e-commerce platforms.

Software as a Service (SaaS)

Ownership: Owned by service providers.

Rights: Users subscribe to access the software online, often hosted on cloud servers. They don’t own the software but have a right to use it based on subscription terms.

Examples: Google Workspace, Salesforce.

Each type of software ownership has its own implications for rights, distribution, modification, and revenue models. Understanding these distinctions is crucial to navigate the software landscape effectively.

Software Ownership vs. Software Licensing

Software ownership vs licensing

These are two different concepts in the world of technology. 

While software ownership concerns the rights and responsibilities related to the creation and control, software licensing pertains to the permissions granted to users regarding usage and distribution. At its core, a software license is an agreement that determines how a code product can be accessed, shared, modified, and resold. 

The choice of a license is a critical decision as it determines how they want their creation to be used and distributed. Factors to consider include: 

  • project's goals;
  • collaboration possibilities;
  • legal implications;
  • the desired level of control over the software.

If you're outsourcing, your vendor’s developers must carefully evaluate these considerations to ensure your software is protected and used in the intended manner, while also fostering a collaborative and innovative environment for your potential users. 

The Role of End-User License Agreements (EULAs)

Role of EULA

End-User License Agreements (EULAs) play a pivotal role in governing the use and distribution of software. These agreements are often dense with clauses detailing rights, limitations, and obligations. A typical EULA might impose certain restrictions, like prohibiting reverse engineering or limiting the software's use to specific scenarios or devices. 

For you and developers, these agreements protect your intellectual property rights and control unauthorized use or distribution of your software.

For end-users, EULAs serve as a guidance on how to interact with the software. These agreements may limit the ways in which users can use or modify it.

As such, all parties should tread cautiously: you must ensure that EULAs are clear and fair, while users should be vigilant of potential pitfalls and overly restrictive terms that may curtail their rights or expose them to unforeseen liabilities.

Potential Challenges in Asserting Software Ownership

Software ownership pitfalls

The evolving landscape of software development brings with it intricate questions about ownership, characterized by both opportunity and challenge. 

At the heart of the challenges lie issues surrounding copyrights and intellectual property rights. While these mechanisms are designed to protect creators, they often present complexities. 

For example, legal enforcement becomes tough when two parties stake a claim on the same software, leading to protracted disputes that can be time-consuming and costly. A foundational step in circumventing such disputes is the diligent practice of documentation and record-keeping. By chronologically preserving every phase of software development, creators solidify their claim to ownership, presenting a clear trail of creation and modification. 

However, today's software often transcends individual creation. The integration of third-party libraries and frameworks, commonly employed to enhance functionality, raises questions about ownership. These tools, although beneficial, come with their own set of licenses, potentially altering the proprietary nature of your software. 

Another layer of complexity emerges with contractual arrangements. When development is outsourced, it's essential to precisely define who retains what rights; a vague contract might unintentionally lead to the relinquishment of crucial rights. 

Lastly, cloud-based tools and platforms can blur the lines of software ownership. With the advent of these technologies, it can become convoluted as multiple users can access and modify the software simultaneously. Careful consideration and documentation are necessary to navigate the complexities of ownership in the era of cloud computing. 

Real-world Cases and Controversies

Real world examples - software ownership

The annals of software development are punctuated by numerous legal battles, challenging the traditional notions of software ownership. These confrontations often illuminate the complexities and intricacies surrounding software intellectual property rights. 

Oracle vs Google

One of the most prominent cases in recent memory involves Oracle and Google, a multi-year legal skirmish centered around the use of Java APIs within the Android ecosystem. Oracle claims that Google's use of certain Java APIs infringes on their copyright, while Google argues that their implementation falls under fair use. This case has far-reaching implications for developers and the wider software community as it calls into question the extent to which APIs can be copyrighted and the potential impact on innovation and collaboration within the industry.

Apple vs Microsoft

Beyond the Oracle-Google faceoff, another contentious battle was between Apple and Microsoft in the late 1980s and early 1990s. The former accused the latter of copying visual aspects of the Macintosh OS in their Windows operating system. Though Apple did not emerge victorious, the case highlighted the complexities in defining ownership of graphical user interface elements. 

Unix Code Usage

Similarly, the long-running disputes over the Unix operating system showcased the issues surrounding ownership and licensing of foundational software. SCO Group's claims against various entities, including IBM, alleging unauthorized use of Unix code in Linux, brought to light the delicate intricacies of open-source and proprietary software mingling. For developers, these cases underscore the importance of understanding both the letter and the spirit of software licenses. 

These cases serve as a reminder of the complexities and challenges surrounding software copyright and the importance of balancing legal rights with fostering innovation and collaboration within the industry.

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Protecting Your Software and Intellectual Property with Our Experts

SENLA tips

Navigating the software domain necessitates a proactive approach to shielding one's intellectual creations. Central to this protective strategy is drafting a robust licensing agreement, which explicitly outlines the privileges and limitations for both developers and users, firmly establishing ownership boundaries. Here's what our SENLA experts recommend doing to protect the code:

  • The first is, as stated above, it is essential to ensure that your software is properly licensed and registered. This not only establishes ownership but also allows you to enforce your rights in case of infringement. 
  • Documentation plays a crucial role in asserting ownership of your software. Maintaining comprehensive records of your software development process, including design documents, code repositories, and version history, can serve as evidence of your ownership. In case of any legal disputes or infringement claims, these documents can be instrumental in proving your rights. 
  • Implementing strong security measures, such as encryption and user authentication, can help prevent unauthorized copying or distribution of your software. It is important to educate your employees or team members about the importance of software protection and the potential consequences of unauthorized use or access.
  • Regularly updating and patching your software is another effective way to protect it from unauthorized access or modification. 
  • We advise to use copyright notices or watermarks in your software to further assert your ownership and warn against unauthorized use.

How we do it

We specify the rights to the code in the contract. Usually our Clients are 100% final owners, and have all rights to own, change, transfer and use the code.

By following these best practices and utilizing documentation effectively, you can protect your software and intellectual property from potential threats and infringement.

The Bottom Line

The crux is clear: both you and users must grasp the fundamentals of software ownership to navigate the digital world effectively. In an age dominated by digital innovation, you should be urged to proactively assert and understand ownership rights. As the lines of code unfold, so does the narrative of ownership, making proactive engagement more crucial than ever.

If you want to know more about software ownership or how to protect your code, feel free to contact us! We will gladly answer all your questions.


Experienced and knowledgeable teams

We built hundreds of products for a variety of industries and are experienced in different ways of writing code. For example, in using open source or third-party libraries or frameworks. Our teams are well-versed in the peculiarities of their licensing and code rights usage to prevent our Clients from having any copyright issues.

Proven track record

We’ve been in the game for 10+ years now and have completed over 350 projects. During this time, we’ve built a strong knowledge of how work needs to be done. The words of our happy Clients are the best proof of that.

Commitment to transparency

We always keep our processes on the surface to be in easy reach for  our Clients. We strive to make them fully reassured in our partnership. On the majority of projects, we use bi-weekly sprints with Friday demos to keep them regularly posted. We are also  happy to assign local delivery managers to help eliminate any, even the slightest obstacles.

Frequently Asked Questions

If I hire your company to develop custom software for me, who owns the final product?

Typically, for custom software projects, our Client always owns the final product, including its source code and all associated intellectual property rights. However, specifics would be outlined in our contractual agreement to ensure clarity on ownership and any potential licensing.

Can I use third-party libraries or frameworks in the software and still claim ownership?

Yes, you can integrate third-party libraries or frameworks, but it's crucial to understand the licensing of these components. Some licenses may impose restrictions or obligations that could affect your software's distribution or commercialization. But we always ensure that any third-party integrations align with your ownership goals and licensing requirements.

How does your company handle IP rights when incorporating open-source components into a software solution?

When using open-source components, we adhere strictly to the terms of their respective licenses. This ensures that the final software solution remains compliant with all licensing requirements, and any intellectual property rights associated with open-source elements are respected.

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