Skip to content
CRYSTAL ITIT Solutions
Offshore

Intellectual Property and Rights Assignment in a Development Contract: What Every Client Must Demand

July 16, 20269 min read
Intellectual Property and Rights Assignment in a Development Contract: What Every Client Must Demand

It is one of the most counter-intuitive legal traps of commissioning software: under French law, paying in full for the development of a piece of software does not transfer its intellectual property to you. The French intellectual property code protects software as a work of the mind, and its rights arise with the author — in practice, the provider whose employees wrote it — without the existence of a commissioning contract changing anything by itself. Without an assignment clause drafted in due form, your company can find itself, after paying tens of thousands of euros, a mere tolerated user of software it believed was its own: unable to have it evolved by a third party, to resell it, sometimes even to migrate it with peace of mind. The subject becomes particularly acute in an outsourcing context, including nearshore: distance makes misunderstandings easier and remedies heavier. The good news is that the protective framework is well known and comes down to a few clauses to demand before signing. CRYSTAL IT, a software company based in Rabat that develops for French clients (our IT offshoring services), has made clear rights assignment a contractual standard: here is what you need to know and demand, whether you work with us or with anyone else.

Why Paying Is Not Enough: What French Law Says

Software is protected by copyright. Article L111-1 of the French intellectual property code states that the author of a work of the mind enjoys an exclusive property right over it by the sole fact of its creation — and specifies that the existence of a contract for work or services does not, by itself, derogate from this rule. In concrete terms: commissioning and paying for development does not transfer the copyright in the code produced to you. For software written by employees, article L113-9 provides for an automatic devolution of the economic rights to the employer: the rights in the code written by your provider's salaried developers therefore belong to… your provider, not to you.

What these economic rights cover is defined for software in article L122-6: reproduction, modification, adaptation, placing on the market. Without an assignment, each of these acts in principle requires the rights holder's authorisation. In practice, a client without an assignment clause can be denied the possibility of entrusting maintenance to another provider (modification is a reserved right), of reusing the code in another product, or of valuing the software during a company sale. This is not a theoretical scenario: it is the classic negotiating weapon of a provider at the end of a conflictual relationship. The only protection is a written, explicit assignment that complies with the code's formal requirements — which is the subject of the next section.

  • Article L111-1 of the French IP code: rights arise with the author, and the commissioning contract does not derogate from this by itself.
  • Article L113-9: rights in software created by employees devolve to the employer — hence to the provider, not the client.
  • Article L122-6: reproduction, modification, adaptation and placing on the market are rights reserved to the holder.
  • Without a written assignment, the client pays for software of which it is only the user — with the provider in a position of strength at every renegotiation.

The Assignment Clause: The Statements Without Which It Is Worthless

French law is formalistic about the transfer of copyright, and this formalism actually protects the client as much as the author: a vague clause turns against whoever invokes it. Article L131-3 of the IP code requires that the transfer mention each assigned right separately, and that the field of exploitation of the assigned rights be delimited as to its scope, purpose, territory and duration. A wording such as "the provider assigns all its rights to the client" is dangerously insufficient: poorly drafted, the assignment can be interpreted restrictively, or even deprived of effect for the rights that are poorly designated.

A robust clause therefore enumerates the assigned rights (reproduction, representation, modification, adaptation, translation, placing on the market, on all media), specifies the purpose (all uses, including commercial, with the right to assign and sub-license), the territory (the whole world), the duration (the entire legal term of protection of the rights) and the moment of transfer — ideally as development progresses or at the latest upon payment of each deliverable, rather than at the very end of the project. Also specify the scope of assets: source and object code, scripts, database schemas, documentation, mock-ups and graphic elements. Two additional points of vigilance: the author's moral right cannot be assigned under French law (it subsists, but its exercise is very limited in software matters), and if the provider subcontracts, require it to guarantee that it holds the rights of its own subcontractors — a chain of assignment is only as strong as its weakest link.

  • Article L131-3 of the French IP code: each assigned right must be mentioned separately, with scope, purpose, territory and duration.
  • "Assignment of all rights" without detail = a fragile clause, interpreted restrictively in the event of a dispute.
  • Assignment as work progresses or with each paid deliverable, never only at the end of the project.
  • Complete asset scope: sources, scripts, schemas, documentation, mock-ups — not just "the software".
  • Guaranteed chain of assignment: the provider must hold the rights of its employees and subcontractors in order to assign them to you.

Exclusive Assignment, Licence, Reusable Foundation: Choosing the Right Structure

The exclusive assignment of all the code is not always the right structure, nor even always possible. Most serious providers capitalise on generic building blocks — internal frameworks, technical components, generators — which they reuse from project to project and cannot assign exclusively to one client without dispossessing themselves. The standard structure therefore distinguishes three layers: the specific developments produced for you, assigned in full ownership; the provider's generic foundation, granted under a broad licence (non-exclusive, perpetual, irrevocable, including the right to maintain and modify yourself or through a third party); and open source components, governed by their own licences.

This three-layer structure is healthy provided it is explicit: demand the list of what belongs to the foundation and what belongs to the specific developments, and check that the licence on the foundation genuinely allows you to keep the application alive without the provider — this is the heart of reversibility (Reversibility of an Outsourced IT Project). The choice of contractual model interacts with this structure: under a fixed-price contract, the assignment naturally aligns with the acceptance of deliverables; under time and materials, expressly provide that the rights arise for the client's benefit as work progresses (Time and Materials or Fixed Price). Finally, if your project includes AI agent developments or specific prompts and configurations (our AI agent development service), treat them in the scope of the assignment in the same way as the code: they are assets, often the most differentiating ones.

  • Three layers: specific work assigned in full ownership, the provider's foundation under a broad licence, open source under its own licences.
  • The licence on the foundation must allow maintenance and modification without the provider — otherwise the assignment of the specific work is useless.
  • Demand the written list of what belongs to the foundation and what is specific, from the quotation stage.
  • Under time and materials, stipulate that rights arise for the client's benefit as work progresses.
  • Prompts, configurations and AI agent models are part of the asset scope: they are assignable assets just like code.

Open Source: The Stowaway in Your Intellectual Property

No modern development starts from scratch: your application will incorporate dozens of open source libraries, and that is a good thing — provided you master their licences. So-called permissive licences (MIT, Apache 2.0, BSD) allow commercial use and modification with light obligations, essentially attribution; they are compatible with proprietary software. So-called copyleft licences, including the GPL family, on the other hand require derivative works to be distributed under the same licence: a GPL component integrated at the heart of software you distribute can contaminate the whole and oblige you to publish its sources. The exact reach depends on the licence (the LGPL or the AGPL follow different logics) and on the mode of integration: the subject deserves real analysis, not a slogan.

Contractually, the safeguard is simple: require from the provider an inventory of the third-party components used with their licences (the industry calls this an SBOM, software bill of materials), a clause prohibiting the integration of components with licences incompatible with your intended use without your written agreement, and a warranty against infringement whereby the provider guarantees you against third-party claims over the delivered code. For software intended for purely internal use, copyleft constraints are often less biting than for software that is distributed or sold as SaaS — one more reason for your contract to specify the application's intended purpose, as the assignment formalism seen above requires in any case.

  • Permissive licences (MIT, Apache 2.0, BSD): compatible with proprietary software, light attribution obligations.
  • Copyleft licences (GPL family): contamination risk — the distributed derivative work must be published under the same licence.
  • Demand the inventory of third-party components and their licences (SBOM) with each delivery.
  • Clause prohibiting licences incompatible with your intended use, except with written agreement.
  • Warranty against infringement: the provider answers for third-party claims over the code it delivers.

Beyond the Contract: Effective Possession of the Code and Access

A perfect assignment on paper is worth nothing if, the day the relationship sours, the code is untraceable, obsolete or unusable. Legal ownership must be coupled with effective possession, organised from day one: the code lives in a repository that belongs to you (account and organisation in your name), the provider works there through access you control, and the deliverables include everything needed to rebuild and deploy the application — build scripts, infrastructure configuration, installation documentation. This simple principle eliminates half of all disputes: no one can hold hostage code the client has always had.

Complete the arrangement according to what is at stake: deposit of the sources with a trusted third party — in France, the Agence pour la protection des programmes (APP) offers this type of escrow service — useful above all when you depend on a software package whose publisher does not assign the sources; delivery reports that list precisely what is handed over; and periodic verification that what is deposited actually rebuilds. These requirements are an excellent revealer during provider selection: one who naturally works in your repositories and documents its deliverables has nothing to withhold, and this shows from the pre-sales stage (How to Choose a Software Development Provider in Morocco). It is the standard we apply at CRYSTAL IT for client developments — client repositories, written assignment, component inventory — because a client who owns its code is a client free to stay for the right reasons.

  • Legal ownership without effective possession does not protect: code in your repositories, in your name, from day one.
  • Complete deliverables: sources, build scripts, configuration, installation and operations documentation.
  • Escrow (for example with the APP in France) secures cases where the sources are not assigned.
  • Detailed delivery reports and periodic rebuild tests.
  • A provider who organises your autonomy from pre-sales signals its solidity — and the reverse too.

When commissioning software, French law only protects the clients who write it down: without a compliant assignment — rights enumerated, scope, purpose, territory and duration specified, as required by article L131-3 of the IP code —, the code you pay for remains your provider's property. The reflexes that change everything fit in one page of contract and a simple organisation: written assignment as deliverables progress, an assumed three-layer structure (specific work assigned, foundation broadly licensed, open source inventoried), warranty against infringement, and effective possession of the code in your own repositories from day one. These demands are not aggressive: they are the standard of healthy relationships, and solid providers accept them all the more willingly as they discourage their fragile competitors. CRYSTAL IT, a software company in Rabat for more than 20 years, contracts its developments for French clients this way (our IT offshoring services): if you are preparing an outsourced project — ERP (our ERP development service), mobile application (our mobile app development service) or website (our website creation service) —, let's talk about it, contract on the table. This article presents the general framework and does not replace a lawyer's advice on your particular situation.

Have a project or a question? Let's talk with a CRYSTAL IT expert.

Request a demo