Does Your Indian Developer Own Your Code? IP Assignment for US Startups With Teams in India

It usually comes up at the worst possible moment. A US startup is closing its Series A, or being acquired, and the investor’s lawyers ask a simple question: “Can you show that the company owns all its code?” Then someone remembers that half the product was built by freelance developers in India, and the contracts were a template downloaded from the internet.

IP assignment in India works differently from the US, and the differences can leave a startup without clear ownership of its own product. This guide explains why “work made for hire” doesn’t protect you in India, the Section 19 traps in Indian copyright law, how employees and contractors differ, and how to fix ownership gaps before they derail a deal. For the contractor relationship itself, see our guide to hiring contractors in India from the US.

Why “work made for hire” doesn’t solve the problem in India

US founders often rely on the “work made for hire” doctrine and assume that if they paid for the code, they own it. Indian law doesn’t have a US-style work made for hire doctrine for independent contractors. Under the Indian Copyright Act, 1957, the author of a work is the first owner of copyright, unless an exception applies.

The main exception is employment. Under Section 17(c), where a work is made in the course of the author’s employment under a contract of service, the employer is the first owner of copyright, unless there’s an agreement to the contrary. A freelance developer or consultant working under a contract for services is not an employee, so the developer owns the copyright in the code they write unless they validly assign it.

The same applies to many “employees” of Indian outsourcing vendors. If you hire a development agency in India, the agency’s employees’ work belongs to the agency, not to you, unless the agency assigns it to you. Startups often have a contract with the agency that never actually transfers ownership.

The Section 19 traps in Indian copyright assignments

Even a written assignment can fail if it doesn’t meet Indian law’s formal requirements. Section 19 of the Copyright Act requires an assignment to be in writing and signed by the assignor. It should identify the work, specify the rights assigned, and state the duration and territorial extent of the assignment.

Section 19 contains three traps that US-style templates often fall into. First, if the assignee doesn’t exercise the assigned rights within one year, the assignment is deemed to have lapsed, unless the agreement says otherwise. Second, if the duration isn’t stated, it is deemed to be five years. Third, if the territory isn’t stated, it is presumed to be India. An assignment that’s silent on these points could, in the worst case, give you Indian rights for five years that lapse if unused.

These rules apply to IP assignment in India regardless of what governing law your contract chooses, because the existence and transfer of Indian copyright are governed by Indian law. The fix is straightforward but must be deliberate: state that the assignment is worldwide, for the full term of copyright, and that the lapse provision doesn’t apply. Also cover future works by obliging the developer to execute confirmatory assignments as code is delivered, rather than relying only on a one-time clause.

Patents, moral rights and other IP

Code isn’t the only asset at stake. If an Indian developer contributes to a patentable invention, they may be a co-inventor. Under Section 6 of the Indian Patents Act, a patent application can be made by the true and first inventor or their assignee, and Section 68 requires assignments of patent rights to be in writing. Your contract should require Indian contributors to assign inventions and sign the documents needed for US and Indian filings. Our guide to patenting software in India explains what Indian law treats as patentable.

There’s also a filing trap for inventions made in India. Under Section 39 of the Patents Act, a person resident in India must not file a patent application abroad without first filing in India or obtaining a foreign filing permit. If your Indian team invents something, check this before filing in the US; see our guide to patent paralegal outsourcing.

Moral rights are another difference from the US. Under Section 57 of the Copyright Act, authors keep the right to claim authorship and to object to distortion of their work, even after assigning copyright. For software, contracts commonly include a waiver or a covenant not to assert moral rights, to the extent the law allows.

How to structure IP assignment in India properly

Getting IP assignment in India right depends on how each person works with you. For employees of your Indian subsidiary, use an employment agreement that confirms the company’s ownership of work made in the course of employment, includes an express assignment of anything that falls outside that scope, and covers inventions, confidentiality and cooperation in filings. See our guide to setting up an Indian subsidiary.

For freelancers and contractors, use a services agreement with a present assignment (“hereby assigns”) of all IP in deliverables, worldwide, for the full term of protection, with the Section 19 lapse provision expressly excluded, a moral rights waiver, a further-assurances clause, and confidentiality. Pay the agreed fees promptly, because unpaid contractors are the ones who later dispute ownership.

For development agencies, make the agency assign all IP to you, and require it to confirm that its own employees and subcontractors have assigned their rights to it. Ask for copies or confirmations during due diligence, because the chain of title is only as strong as its weakest link. Keep your code in repositories your company controls, never in a developer’s personal account. Founders’ own IP should be assigned too; see our guide to founders’ agreements in India.

Fixing gaps, legal remedies and quick answers

If you discover a gap, fix it before a financing or exit forces you to. The usual remedy is a confirmatory assignment: a new written agreement, signed by the developer or agency, assigning all past work to the company in a form that meets Section 19, often with a modest payment as consideration. Where a developer refuses, the options include negotiating a buyout, relying on any implied license arguments, or, if the contract supports it, seeking specific performance or an injunction in court.

Disputes over unauthorized use of your code by a former contractor can be pursued as copyright infringement in Indian courts, with civil remedies including injunctions and damages. The cheapest remedy, though, is prevention: getting IP assignment in India right in the first contract. Have Indian counsel review any template before you rely on it.

Quick answers

Does a US company own code written by an Indian freelancer?

Not automatically. Under Indian copyright law, the freelancer owns the copyright unless it has been validly assigned in writing.

What should an Indian IP assignment include?

A written, signed present assignment covering the work, the rights, worldwide territory and full term, excluding the one-year lapse rule, with a moral rights waiver and further-assurances clause.

Can we fix missing assignments later?

Yes. A confirmatory assignment signed by the developer or agency is the usual fix, ideally completed before a financing or acquisition.

Related reading: legal due diligence on Indian startups; also IP assignment for UK start-ups with Indian developers; also paying Indian developers from a Dubai Web3 company; also trade secrets in India: protecting source code and algorithms and open-source licence audits for US startups; also an intercompany IP licence from Dubai to an Indian subsidiary and software copyright protection in India; also trade secret remedies when former employees take code.

Final word

Halverton & Co. is an Indian law firm that advises on Indian law, including IP assignment and chain-of-title clean-ups for code built in India. We practice in Jharkhand, Maharashtra and before the Supreme Court of India, and we work alongside US counsel, who advise on US law. Halverton & Co.: Where tech needs law! If you have a question about Indian law, write to us at office@halvertonandco.com, or get in touch.

This article reflects developments reported up to early October 2026. It is for general information only, is not legal advice, and does not create an attorney-client relationship. Halverton & Co. is an Indian law firm and does not advise on US law.