I run ZoopCoder, an Indian development agency. Everything below argues against my own commercial interest — by default, the code my team writes for you belongs to us, and I am about to explain exactly how to take it. Check every section number against the bare Act before you rely on it.
The rule
Paying for a build does not transfer copyright in India. Only a signed assignment does — and if that assignment does not state a duration and a territory, the statute quietly rewrites it to five years, India only.
That is not a drafting opinion. It is sections 17, 19(5) and 19(6) of the Copyright Act, 1957, and it is the single most expensive thing Indian founders do not know about their own software.
The exclusive fact: the clause that expires
Almost every Indian development contract I have seen contains a sentence like:
"All intellectual property created under this agreement shall belong to the Client."
Read literally against the statute, that sentence can give you five years of Indian rights in your own product, and then it lapses back to the developer.
- s.19(1) — an assignment of copyright is valid only if it is in writing, signed by the assignor. A quotation email, an invoice marked "full and final", a WhatsApp "yes bhai it's all yours" — none of these are assignments.
- s.19(2) — the assignment must identify the work and specify the rights assigned, the duration and the territorial extent.
- s.19(5) — if the duration is not stated, the assignment is deemed to be for five years.
- s.19(6) — if the territorial extent is not stated, it is presumed to extend only to India.
So the fix costs you nine words. Write "for the full term of copyright" and "worldwide" into the same sentence, and both statutory defaults disappear. Leave them out and you have bought a lease, not the thing.
Why the default is not what buyers assume
Under s.17, the first owner of copyright is the author — the person who wrote it. The one common case that flips automatically is a work made by your own salaried employee in the course of employment under a contract of service.
An agency or a freelancer works under a contract for service. That is outside the rule. The copyright stays with them until they assign it in writing.
| How the code got written | Who owns it by default | What you must sign to change it |
|---|---|---|
| Your own salaried employee, in the course of their duties | You (the company) | Nothing — but keep an IP clause for work done outside duties |
| A freelancer you paid per milestone | The freelancer | A written, signed assignment under s.19 |
| An Indian agency | The agency | A s.19 assignment plus a warranty that its own staff's rights sit with it |
| An offshore/foreign vendor | Follows the contract and its governing law, which may not be Indian law at all | Assignment + an enforceable governing-law and jurisdiction clause |
| An intern or a friend, unpaid | Them | A signed assignment — and do it while they still like you |
| Written substantially by an AI assistant | Unsettled. Indian copyright is built around a human author and no Indian court has decided it | Drafting that works either way: a right-to-assign warranty + an indemnity, not a confident answer |
The label on the paper does not decide the employee question either. Courts look at control, integration and the substance of the relationship — calling someone a consultant while treating them as staff is decided on the facts, not the letterhead.
Handover is not ownership
This is the most common misunderstanding in Indian software buying, and it survives because both words feel like the end of the project.
- Handover is a delivery event. You receive files.
- Assignment is a legal transfer. You receive rights.
You can hold a complete copy of the source, on your own server, in your own GitHub org, and still not own the copyright in it — which means your developer can lawfully reuse the same code for your competitor, and you cannot lawfully licence it to anyone.
Three more things a handover is not: it is not a warranty that the code is original rather than copied; it is not a transfer of the third-party licences inside it; and it is not the author's moral rights, which under s.57 stay with the author no matter who owns the copyright. That last one is why "we own absolutely everything" is never literally true.
Put assignment and handover in the contract as two separate obligations, because they are two separate things.
The number that argues against us
Here is the honest cost table, and note that every "before" figure is zero. Ownership is free to agree and expensive to retrofit — which means the leverage is entirely yours right up until you pay the first instalment, and entirely ours afterwards.
| Situation | Cost to fix before the build | Cost to fix after |
|---|---|---|
| No assignment signed, developer cooperative | ₹0 — one clause in the proposal | A deed of assignment: goodwill or a small fee, plus a lawyer's time |
| No assignment signed, relationship broken down | ₹0 | Whatever they decide your need is worth — you negotiate from zero leverage |
| Assignment silent on duration and territory | ₹0 — two phrases in one sentence | A fresh signed deed, at the moment you can least wait: mid-diligence or mid-raise |
| Domain, hosting or Play Console in the developer's name | ₹0 — register them yourself | Transfer processes measured in weeks, with a listing you cannot update meanwhile |
| Undisclosed copyleft component in a commercial product | ₹0 — ask for the component list | Replacing it, or complying with its licence, after you have shipped |
And if the developer cannot be found or will not sign, the only clean exit is a rebuild. In our experience that costs 60–80% of the original build — you are re-paying for work that already exists and that you already paid for once.
What to do, in order
- Decide it before the first instalment, not at handover. Put the assignment in the same document as the price and make the first payment conditional on it being signed. A developer who will not sign an assignment at quotation stage has just told you something useful for free.
- Write the four things s.19 requires — writing + signature, the work identified, the rights, the duration ("full term of copyright"), the territory ("worldwide"). Describe the work widely: source code, designs, databases, documentation, and anything created during the engagement.
- List the handover separately: repository with full commit history, environment and config files, deployment credentials, design source files, database schema, build pipeline.
- Register the accounts in your own name from day one — domain, DNS, hosting, Play Console, App Store Connect, payment gateway. This is the cheapest control you will ever buy and the one most often skipped because the developer offers to "handle it".
- Ask for the third-party component list before launch, not after. A copyleft library inside a commercial product carries obligations no assignment clause can override.
The one clause we would refuse
For completeness and against interest: an assignment that also demands we hand over our internal framework, boilerplate and reusable libraries — the pre-existing code that predates your project and is used across every client. No agency can honestly sign that away, and one that does is either lying to you or lying to its other clients.
The correct shape is: you own everything created for you; we grant you a perpetual, irrevocable, worldwide licence to the pre-existing components embedded in your build. If a vendor cannot articulate that distinction, that is your signal — not the price.
I am not a lawyer and this is not legal advice — it is what an agency wishes clients would ask for. Read the Act, or have a lawyer draft the clause; either costs less than the rebuild.
The long version, with the full clause checklist and the position if you have already built and signed nothing, is here: Who owns your website or app code in India. Our pricing is public at zoopcoder.com/pricing.php, including what we charge to build with the assignment already signed — which is the same as without it, because it should be.
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