Reading time: 4 minutes

If you are a software developer, you are probably worried about protecting your intellectual property (IP) rights when developing software for your clients. You may often find yourself retaining and recycling slabs of code for your clients. This code may have IP rights attached to it that you should be aware of in order to make the most out of its commercial value.

When approaching this problem, consider your needs when drafting appropriate limitations on assignable IP under the development agreement. Once you have clearly defined and divided your IP rights within the development agreement, you will be able to proceed with peace of mind knowing that your intellectual property rights are protected.

Types of IP Rights in Software Development

Patent law can protect software in some circumstances. Patents offer the strongest protection, for software so you should consider whether your software is patentable. If it is, this is just one of the ways you can protect your IP. In addition, physical devices or hardware can sometimes be patented. 

Another way you can protect your software is copyright law. Software is recognised as a literary work. Unlike patents or trade marks, you do not need to register copyright in Australia. This is not the same in other countries like the US, however, so if you intend on expanding overseas you should look at registering your copyright in each applicable country.

For registered IP like patents, defining and dividing your rights can be simplified. Copyright, on the other hand, is harder to define and consequently harder to protect. You should try to be vigilant and as clear as possible when drafting your Development Agreement so that none of your IP rights slip through unprotected.  

IP Ownership in Development Agreements

If you are developing software that a client will use, generally you will own the IP attached to your software. Your client will own any and all IP generated as a result of your software.

For example, someone using Adobe to produce digital art does not need to worry about Adobe claiming ownership of their work.

You can also transfer or licence out IP ownership, similar to physical property. You can:

  • assign IP in full or partially to another business or individual; and
  • licence IP under specific terms and conditions of use.

As a software developer, clearly defining whether the IP protection in the work is assigned or licenced to the client will help you avoid disputes over ownership later on.


Not all IP ownership is this straightforward. Sometimes the components used to create software are more complex and the line between ownership can be blurred. If the code you use to create the software is complex, you should insert a clause in your development agreement that stipulates when the client can use this code.

For example, this could be in a potential patent application for an invention.

What is the Difference Between ‘New IP’ and ‘Developer IP’?

New IP refers to any code that specifically relates to your client’s business emerging from the development of the software. Developer IP instead refers to background IP or the code that you have recycled and reused through the development of new software for your clients.

Your client owns all they need to in terms of the development agreement and in terms of protecting their own interests. Similarly, you are able to continue using the code that you have developed with your new client without infringing on the IP rights of your previous clients.

Key Takeaways

It is always better to know your IP rights before you enter an agreement with anyone else intending to use your product or services. The clearer these rights are, the more effective and painless your development agreement will be. IP rights can come in different forms. Some are registerable and some not. It is important to know: 

  • exactly what IP right you are trying to protect; and 
  • that the development agreement defines them sufficiently. 

You should make sure that there is a clear separation between your IP rights and your clients’ in any development agreement. If you have any questions about software IP rights, contact LegalVision’s IT lawyers on 1300 544 755 or fill out the form on this page.


New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards