Who owns the source code in Australia? Copyright, IP assignment and what to put in the contract

Who owns source code by default under Australian law?

The author of source code owns the copyright in it by default, unless they wrote it as an employee in the course of their employment. The Copyright Act 1968 treats a computer program as a literary work, defining it as a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result. Section 35(2) makes the author of a literary work the owner of the copyright in it.

The main exception is in section 35(6): where a work is made by an author under the terms of their employment by another person under a contract of service or apprenticeship, the employer owns the copyright. Section 35(3) lets parties exclude or modify that rule by agreement, which is why some employment contracts deal with it expressly.

Copyright arises automatically when the code is written. There is no registration system for copyright in Australia, so ownership turns on who wrote the code, in what capacity, and what the paperwork says.

This page is general information, not legal advice. For a specific contract or dispute, talk to a lawyer who works in technology or IP.

Employees, contractors and agencies: why does the answer differ?

Employees’ code belongs to the employer; contractors, freelancers and agencies keep theirs unless they assign it in writing. The key legal question is whether the person writing the code works under a contract of service (an employee) or a contract for services (a contractor).

Who writes the code	Default owner under the Copyright Act	What you need
Your employee, as part of their job	You, the employer (s 35(6))	A clear employment contract; moral rights consents
Your employee, on their own time and outside their role	Usually the employee	A written assignment if you want it
A freelancer or contractor you engage	The freelancer	A written, signed assignment to you
An agency’s employees	The agency, as their employer	A written assignment from the agency to you
An agency’s subcontractors	The subcontractor, unless they’ve assigned to the agency	The agency must hold assignments from them before it can assign to you
A cofounder before any agreement	The cofounder personally	An assignment to the company, ideally at incorporation

The agency row trips people up. An agency can only assign what it owns, so if it used freelancers who never assigned their work to the agency, there is a gap in the chain. Ask how the vendor makes sure everyone who touches your code has assigned their rights to it.

Does paying for software mean you own it?

No. Paying for code doesn’t transfer copyright; a written, signed assignment does. Section 196(3) of the Copyright Act says an assignment of copyright, whether total or partial, does not have effect unless it is in writing signed by or on behalf of the assignor.

If you paid without a written assignment, you are not left with nothing. Depending on the circumstances, you may have an implied licence to use the software for the purpose it was commissioned. But a licence to use is not ownership: you may not be able to stop the developer reusing or selling the same code, and you may struggle to modify it, sell it with your business or license it to others.

Section 197 helps here. It allows a signed agreement to assign copyright that doesn’t exist yet, so a contract signed before work starts can make ownership pass automatically when the code is created or when a stated condition is met, such as payment.

What should an IP assignment clause say?

A good assignment clause says what is assigned, when it passes to you, what the developer keeps, and what licence you get over anything the developer keeps.

Check for each of these:

1. Scope. Source code, object code, designs, documentation, database schemas, configuration and build scripts, not just “the software”.
2. Timing. Common triggers are on creation or on payment for each deliverable. If ownership passes on payment, check each stage passes as it is paid, not only at the end.
3. Background IP. Developers keep their existing tools, libraries and know how. You need a perpetual, royalty free licence to use, modify and maintain any background IP built into your software, including through another developer later.
4. No reclassification. Code written for you shouldn’t be treated as background IP just because it could be reused elsewhere.
5. Chain of title. The vendor promises that its staff and subcontractors have assigned their rights to it.
6. Moral rights consents. See the next section.
7. Further assurance. The vendor will sign any further document needed to evidence the assignment.
8. Handover. When you receive the repository, credentials and accounts, and what you must have paid first.

Assignment and licence are different things, and both have a place:

	Assignment	Licence
What you get	Ownership of the copyright	Permission to use it on stated terms
Can you stop others using it?	Yes	Only if the licence is exclusive
Can you sell it with your business?	Yes	Only if the licence allows transfer
Typical use	Code written specifically for you	The developer’s background tools and third party components

Our software contract checklist covers the rest of the agreement, including warranties and liability.

What are moral rights in software, and how are they handled?

Moral rights are personal rights of the individual people who wrote the code, and they can’t be assigned, so contracts handle them with written consents. They are set out in Part IX of the Copyright Act and include the right of attribution and the right of integrity, which lets an author object to derogatory treatment of their work.

The Act says a moral right is not transmissible by assignment. So even a perfect IP assignment leaves the programmers with rights that could, in principle, be used to object to how their code is changed. The fix is consent. Section 195AWA says it isn’t an infringement of a moral right to do something within the scope of a written consent genuinely given by the author. A consent must relate to specified acts or classes of acts and to specified works or works of a particular description, but an employee can consent for the benefit of their employer in relation to all works made in the course of their employment.

In practice, the vendor should obtain consents from everyone who writes your code, covering modification, adaptation, use without attribution and commercialisation, and promise in the contract that it has done so.

What about existing code, libraries and open source?

Almost every application includes code the developer didn’t write for you, and you can’t be assigned rights the developer doesn’t own. What matters is that you know what is in your software and what licence each part comes with.

• The developer’s background code. Covered by the licence described above.
• Commercial components. Paid libraries, themes or services with their own licence terms and fees.
• Open source. Most open source licences are permissive and only ask for attribution. Copyleft licences go further: the Free Software Foundation describes copyleft as a method that requires all modified and extended versions of a program to be free as well. Depending on the licence and how the software is distributed, that can oblige you to release source code.

Ask for a list of the main third party and open source components and their licences at handover, and a promise that copyleft code won’t be included in a way that forces disclosure of your code without your approval.

Who owns code generated by AI?

At the time of writing, the position in Australia is unsettled, but copyright requires a human author, so code produced by AI with little human input may not be protected. This matters more every year as developers use AI coding tools.

The clearest authority is Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCAFC 149, where the Full Federal Court held that directories largely produced by automated processes were not original works because they lacked human authorship. The principle carries over: the more a person shapes the code, the stronger the case that copyright exists and can be assigned.

The government is working on it. The Attorney-General’s Department says that in October 2025 the government asked its Copyright and AI Reference Group to explore three priorities, including improving certainty on how copyright law applies to material generated through the use of AI. It also noted that the government is not considering a text and data mining exception.

What to do now:

• Contract for it. Make the assignment cover AI assisted work to the extent rights exist in it.
• Check the tools’ terms. Each AI coding tool has its own terms about outputs and about what it can do with your data. Our guide to making an app built with Lovable, Bolt or Replit production ready gives one example.
• Rely on more than copyright. Confidentiality clauses, access control and keeping the repository in your control protect code whether or not copyright subsists in every line.

It isn’t only the code: who should own the accounts?

Your business should own every account the software depends on, even if the developer sets them up. Losing access to one of these can stop a launch or an update as surely as losing the code.

Asset	Who should own it	How hard it is to move later
Code repository	You, or transferred to you at a defined point	Easy if the contract says when
Domain name and DNS	You	Moderate; needs the registrar login
Cloud hosting and database	You	Moderate to hard; data and settings must move
Apple App Store listing	You	Apple says the sending Account Holder must start the transfer and the recipient accepts it; some data, such as past sales reports, stays behind
Google Play listing	You	Google says the target account owner must approve the transfer; earnings reports don’t move
Payment provider	You	Hard; usually means a new account and new customer billing
Email, SMS and analytics services	You	Moderate
API keys and secrets	You, stored in a secrets manager	Easy to rotate if documented
Design files and documentation	You	Easy if they’re in a shared workspace

What if a developer won’t hand over the code?

Start with the contract and a calm written request; escalate only if that fails. The right next step depends on what was agreed and what has been paid.

1. Read the contract. Find the assignment clause, the handover clause and any condition, such as final payment.
2. List what you need: repository, database export, credentials, account transfers and documentation.
3. Ask in writing, referring to the clause, with a reasonable deadline.
4. Pay what is genuinely owed, or put the disputed amount aside, if ownership passes on payment.
5. Secure what you can control now: change passwords on accounts in your name and take backups.
6. Get help. The Australian Small Business and Family Enterprise Ombudsman responds to small businesses in dispute with other businesses, and provides information on dispute resolution options and access to mediation. A technology lawyer can advise on your position.

If there was never a written assignment, the developer may own the code, and the conversation becomes a negotiation to buy it or a decision to rebuild.

How AWLabs handles IP and handover

Our Master Services Agreement is published, so you can read the terms before any conversation. In summary:

• Assignment as you pay. On payment in full of the fees for a deliverable, we assign to you all right, title and interest we hold in the project IP in that deliverable, including future copyright to the extent the law allows.
• Handover after final payment. During development the code may sit in a repository we control or one you control. Final repository access, credentials and account transfers happen following final payment.
• Background IP. We keep our general tools and frameworks, and give you a perpetual, worldwide, royalty free licence to use, modify and maintain any background IP built into a paid deliverable. We can’t classify your bespoke code as background IP because it could be reused.
• People and moral rights. Everyone who works on your project assigns their rights to us so we can assign them to you, and we obtain the moral rights consents you need to use, modify and maintain the software.
• Open source and AI. We won’t knowingly include a licence that forces disclosure of your source code without your approval, and AI assisted work is assigned to you to the extent rights exist in it.

We also send a mutual NDA before detailed discussions. Every build starts with a Development Consult and a paid Discovery Audit, followed by a fixed price Schedule of Work. See our trust page or custom software development.