Who Owns the Code You Want to Sell: Employee, Contractor and Founder IP Assignments

A company owns the code its employees write in the course of their jobs in the US, UK and Germany, but code from contractors, agencies and founders belongs to the company only if a written assignment or grant moves it there. Acquirers of code check this before they license: Mercor asks for code the company "owns outright" (checked 2026-11-09), and Pangea.ai calls its ownership obligation uncapped (checked 2026-11-09).

This page covers the three author groups, what acquirers ask owners to prove, a commit-history check and the decision whether to license. It sits within AI training data licensing, where DataPacts is independent and takes no cut of any license.

Why Every Author of a Codebase Matters to an AI Code License

An AI code license grants rights in every file of the repositories, so a single file the company does not own can breach the license and the ownership warranty behind it. Mercor states that its Software Company listing needs "50,000+ lines of code the company owns outright" from at least 10 engineers, and Pangea.ai accepts "owned private code only" (both checked 2026-11-09).

The licenses on record leave ownership with the company: Pangea.ai states the owner keeps ownership, Collinear AI states the seller keeps ownership under a one-time snapshot, and Turing states that "Ownership does not change hands" (all checked 2026-11-09). The question is therefore whether the company holds the rights it grants, not whether it gives the code away.

Rates, buyers and eligibility sit on the parent page on selling or licensing source code and codebases to AI companies, and this page covers only the ownership layer.

Who Owns Code Written by Employees: US, UK and German Rules

In all three jurisdictions the employer holds the rights in code an employee writes as part of the job, but each statute words the test differently and each lets a written agreement change the result.

The table compares the three provisions as of 2026-11-10, each read from the official text.

United States: Work Made for Hire Under 17 U.S.C. 101 and 201(b)

Code an employee writes within the scope of employment is a work made for hire, so the employer is treated as its author and owns all rights. Section 101 defines the first prong as a work prepared by an employee within the scope of employment, and 17 U.S.C. 201(b) adds that the employer owns all rights "unless a written instrument signed by both parties provides otherwise."

This page does not settle who counts as an employee under section 101. A company that treated some developers as contractors moves to the contractor section below.

United Kingdom: The Employer as First Owner Under CDPA Section 11(2)

UK law makes the employer the first owner of a literary work, which includes software, made by an employee in the course of employment, subject to any agreement to the contrary (CDPA 1988 s.11(2)). The rule reaches employees only, so code from anyone outside an employment relationship needs an assignment.

Germany: Economic Rights in Programs Under UrhG § 69b

German law lets the employer alone exercise all economic rights in a computer program an employee writes in performance of duties, while authorship stays with the person who wrote it. Section 69b(2) applies the same rule to public-law service relationships, and freelancers' code needs an express grant. The section covers computer programs only, so documents, designs and other works in the same repository are outside it.

Code Written Outside the Job: Side Projects and Earlier Employers

Each employer rule stops at the edge of the job: the statutes speak of the scope of employment, the course of employment and the performance of duties, so code outside them is not caught by the employer rule. Acquirers reject side projects in any case, as Mercor lists "Student, hackathon or side projects" among the code that is not a fit (checked 2026-11-09).

Code a developer wrote for an earlier employer stays with that employer under the same three rules, so a developer cannot bring it into the current company's license.

Contractor and Agency Code: Why a Written Assignment Is Needed

Code from contractors, freelancers and agencies is not caught by the employer rules, so the company owns it only through a written assignment or, in Germany, an express grant. Under 17 U.S.C. 101 a commissioned work counts as a work made for hire only in nine listed categories and only with a signed written agreement, and the reading used for companies licensing code is that contractor code needs a written assignment. German freelancers need an express grant under UrhG § 69b.

Acquirers apply the same line. Patronus AI states that it asks about contractor IP assignments, aitrainer.work wants the seller to own the asset or hold written permission from each contributor, and Pangea.ai excludes client-owned code (all checked 2026-11-09). On agencies, Mercor rules out "Client work an agency doesn't own" for software and asks agencies for "the right to license the work, either your own or cleared with clients" (checked 2026-11-09). The detail on who owns client work sits on the agency page.

An assignment clause on record looks like this: Shipd's contributor terms, s.3.1, assign all Work Product irrevocably and worldwide on creation or submission (checked 2026-11-09). A clause of that kind in each contractor agreement is what an acquirer asks to see.

Founder Code Written Before the Company Existed

Code a founder wrote before the company was formed, or before the founder became its employee, was not written within any employment by the company, so it belongs to the founder until a written assignment moves it in. The employer rules above start only with an employment relationship, and the contractor rule then applies to the founder as to any other outside author.

Investor and exit effects of code IP belong to the page on venture-backed startups licensing data while operating.

What Acquirers Ask Owners to Prove and Warrant About Code

Acquirers and intermediaries of code publish ownership conditions on their own pages, and some make the owner stand behind them with a warranty or indemnity that survives payment. The table lists the conditions as of 2026-11-09 in alphabetical order, and the role column keeps intermediaries apart from buyers. Each value is the party's own claim.

Exposure differs between programs. Pangea.ai states that its ownership obligation is uncapped, while micro1's master terms cap liability at three times the fees under the Order Form, except for fraud, gross negligence and wilful misconduct (s.7.2, updated 2026-11-08). The clause-level detail sits with the contract page on AI data licensing agreements.

Checking Authorship in the Commit History Before Licensing

The commit history already lists who wrote each change, so an ownership check starts from the author list and ends with an evidence file for every author group. The six steps are:

1. Export the author list per repository. Acquirer thresholds count authors: Abaka AI states 3+ contributors and Mercor 10+ engineers (checked 2026-11-09).
2. Match each author to a group: employee, contractor, agency, founder or outside contributor.
3. Collect the employment agreements and the signed assignments for each group.
4. Date each founder's first commits against the incorporation date and the start of the founder's employment.
5. Mark forked, vendored and client code. pre.dev strips vendored dependencies, and Mercor and Pangea.ai reject forks (checked 2026-11-09).
6. Keep the evidence file with the license.

pre.dev pseudonymises authors before delivery (checked 2026-11-09), so the check happens on the company's side before any export. The same logic extends to every dataset in a rights audit for data you want to license.

Closing Ownership Gaps: Assignments, Carve-outs and Partial Licenses

An ownership gap closes in one of three ways, and a gap that cannot be closed takes that code out of the license.

• Obtain a signed written assignment from the author, on the model of the assignment-on-creation clause above.
• Carve the affected files, directories or repositories out of the license, as Pangea.ai does by excluding client-owned code.
• License only repositories written by employees, which still have to meet the acquirer's thresholds.

Third-party components are a separate question: a repository's dependencies and copied snippets carry their own licenses, covered under open-source license contamination when licensing a codebase.

Licensing Code With Mixed Authorship: Benefits, Risks, Downsides and Alternatives

A codebase with documented ownership can be licensed while the company keeps it, but every unresolved author stays a liability after payment, because a trained model cannot give the code back.

Benefits

• Ownership stays with the company under the licenses on record (Pangea.ai, Collinear AI, Turing Project Lazarus; checked 2026-11-09).
• Documented assignments widen which repositories meet an acquirer's conditions, such as Mercor's code the company owns outright.

Risks

• Pangea.ai's ownership obligation is uncapped (checked 2026-11-09).
• micro1's master terms have the licensor indemnify IP claims from the Data (s.8.1, updated 2026-11-08).
• micro1's clawback for a materially inaccurate manifest survives acceptance (s.4.3).

Downsides

• Collecting assignments from former contractors costs time and may fail; no public figure exists for how often.
• Carve-outs shrink the licensable code and can drop a codebase below an acquirer's thresholds.

Alternatives

• License only the repositories employees wrote.
• Delay licensing until the missing assignments are signed.
• Do not license the code at all, which is a valid outcome.

The wider choice is covered under should you sell or license your data.

Where Code Ownership Sits Among Code Pages and Seller Steps

Code ownership is one check inside the code seller path. The parent page covers acquirers and rates, the system and industry pages cover export and sector rules, and the seller guide covers every step to sell or license company data to AI companies.

• Source code and codebases (parent)
• GitHub repositories: export rights and licenses
• Software companies licensing code to AI
• Data inventory for an AI data sale
• Due diligence in an AI data deal
• Indemnities and warranties in AI data licenses

Code Ownership When the Company Has Closed or Is in Bankruptcy

When a company has closed, the question becomes who may sign for its code, and a bankruptcy estate sells with few ownership promises. The Spirit Airlines form of Bill of Sale under 11 U.S.C. 363 (Bankr. S.D.N.Y. 25-11897) makes title and authority representations that do not survive and disclaims non-infringement; the sale is not approved as of 2026-11-09, with a hearing set for 2026-11-17 (Dkt. 1779). A founder told MIT Technology Review on 2026-10-13 that a code-base sale netted roughly USD 25,000.

Who signs for a closed company's code is covered under selling data from a shut-down or defunct company, and the UK, US and German rules on who owns a dissolved company's data sit on a separate page.

The Statutes Behind This Page, and What It Does Not Cover

The rules above come from 17 U.S.C. 101 and 201(b), CDPA 1988 s.11(2) and UrhG § 69b; other jurisdictions are not covered here. This page is general information, not legal advice. Who owns code generated by AI tools is outside this reference.

Federal and state rules sit under AI training data law in the United States, and staff personal data in the same records follows employee data and AI training rules. The pages on United Kingdom rules for licensing data and Germany rules for licensing data cover the other two jurisdictions.

Program Pages Named on This Page

The ownership terms above come from these programs' own pages, each checked November 9, 2026.

• Abaka AI
• AITrainer.work
• Collinear AI
• Mercor
• micro1
• Pangea.ai
• Patronus AI
• pre.dev
• Turing Project Lazarus
• AI data partnership payouts and program terms compared

Frequently Asked Questions

Who owns the source code a company's employees write?

The company does, when the code is written as part of the job, under 17 U.S.C. 201(b), CDPA s.11(2) and UrhG § 69b, unless a written agreement says otherwise.

Does a contractor own the code they write for a company?

Yes, until a written assignment, or in Germany an express grant, moves the rights to the company.

Can code be intellectual property that a company licenses?

Yes: code is protected by copyright as a literary work in the UK and as a computer program in Germany, and acquirers license it while the owner keeps it.

Can a developer sell code written at a previous job?

Usually not, because code written within that job belongs to the former employer, and acquirers ask the seller to own what it licenses.