Contributor: Iyanuoluwa Animasaun Esq.
Introduction
In the contemporary digital economy, ideas are abundant, and execution is rapid, but ownership remains the decisive currency. Startups are born daily from brilliant concepts, hackathons, pitch decks, and informal collaborations between business visionaries and technical developers. Yet, despite the sophistication of modern technology, many founders continue to make a legally fatal assumption: that paying a developer, engaging a software firm, or collaborating with a technical partner automatically confers ownership of the resulting application. Legally, this assumption is often wrong.[1]
Intellectual property rights do not follow commercial logic, moral expectations, or entrepreneurial intuition. They follow the law and, above all, the contract. Where contracts are absent or poorly drafted, ownership of an app or software product may vest not in the founder or company but in the developer, a co-founder, or even a third party. The consequences are severe, as in extreme cases, a company could face a total loss of control over its core business asset.
AUTHORSHIP UNDER THE NIGERIAN COPYRIGHT ACT, 2022
Under Nigerian law, not every creative output qualifies for copyright protection. For a work to enjoy protection, it must fall within one of the categories expressly recognised by the Copyright Act, 2022. These include literary works, musical works, artistic works, cinematograph films, sound recordings, and broadcasts.
In the case of literary, musical, or artistic works, the law imposes additional thresholds. The author must have expended sufficient effort to confer originality on the work, and the work must be fixed in a definite medium of expression, whether presently known or subsequently developed, from which it can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.
Copyright protection vests primarily in the author of the work. Accordingly, the author is deemed the first owner of copyright upon creation. This general rule, however, is subject to exceptions. Where a work is created in the course of a contract of employment or apprenticeship, and the terms of the contract so provide, copyright may vest in the employer or commissioning party rather than the individual creator.[2]
The Legal Default Position: Authorship Equals Ownership
The starting point under intellectual property law is deceptively simple: the author of a work is its first owner. In the context of software, the “author” is the person or entity that writes the source code. Copyright protection arises automatically once original code is fixed in a tangible form; no registration or formal process is required.[3]
Crucially, payment does not displace this default rule. Commissioning an app, paying development fees, providing the business idea, or even dictating functional specifications does not, in itself, confer ownership of the resulting software. In the absence of a valid legal mechanism transferring IP rights, the developer retains copyright and merely grants the founder an implied or limited licence to use the app.[4]
This reality often comes as a shock during investor due diligence. A founder may have operated a product for years, attracted users, generated revenue, and built brand recognition, only to discover, often too late, that the company does not legally own the software underpinning its operations.
Employees vs Independent Developers: A Critical Distinction
A central determinant of IP ownership lies in the legal status of the developer.
- Employees
Where software is created by an employee in the course of their employment, copyright typically vests in the employer, subject to statutory exceptions. This position reflects the assumption that employees create works for the benefit of their employer. However, this protection applies only where a genuine employer–employee relationship exists. Many startups mistakenly label developers as “staff” when, in law, they are independent contractors. Misclassification strips founders of automatic IP ownership and exposes the business to serious legal risk.
- Independent Contractors and Agencies
In this regard, freelancers, consultants, and software development companies have the default position reversed. Independent developers own the IP in the code they create unless there is an express written assignment transferring ownership to the client.
Service agreements, invoices, milestone payments, or verbal assurances do not suffice. Without a properly drafted IP assignment clause or a standalone IP Assignment Agreement, the developer remains the legal owner of the software.
Co-Founders and Technical Partners: Shared Creation, Shared Risk
Many tech startups originate from informal collaborations between business founders and technical co-founders. These relationships often begin in trust, enthusiasm, and shared vision. Unfortunately, trust does not substitute for legal clarity.
Where multiple individuals contribute to the creation of an app, the law may characterise them as joint authors. Joint ownership typically means that no party can independently commercialise, license, assign, or sell the IP without the consent of the other. This can paralyse decision-making, frustrate fundraising, and deter investors who demand clean, exclusive ownership.[5]
When a technical co-founder exits under strained circumstances, unresolved IP rights frequently become a powerful bargaining chip, sometimes more valuable than equity itself.
Ownership vs Licensing: A Distinction with Consequences
Founders must clearly distinguish between ownership and licensing.
Full ownership involves the transfer of all intellectual property generated during development to the company. This is usually achieved through a Development Agreement with robust IP clauses or a separate IP Assignment Agreement. Ownership grants unrestricted rights: modification, scaling, sublicensing, resale, and redevelopment without reference to the original developer.
Whereas Licensing, by contrast, merely grants permission to use the software under specified conditions. Licences may be limited, revocable, or silent on modification rights. Importantly, copyright protects only the expression of an idea, not the idea itself. Where a developer converts a founder’s concept into code, the developer owns that expression unless ownership is expressly transferred.
Users, EULAs, and Brand Protection
App users do not own the software they download. Instead, developers grant usage rights through an End User Licence Agreement (EULA), which defines how users may interact with the app, often prohibiting modification, reverse engineering, or redistribution.[6]
While app stores once enforced standard EULAs, developers now have greater flexibility to deploy custom agreements that better protect their software and brand. Properly drafted EULAs, alongside trademark protection, are essential components of a holistic IP strategy.
Why IP Ownership Is Central to Investment and Exit
To investors, intellectual property is not a technical detail; it is the business. Venture capital firms and acquirers routinely insist on:[7]
- A clear and unbroken chain of title to all software and code;
- Written IP assignments from developers, contractors, and founders;
- Assurance that no third-party rights restrict commercial exploitation.
Where ownership is unclear, investment may be delayed, discounted, or abandoned entirely. In some cases, founders are forced into expensive retrospective assignments or settlements, if they are achievable at all.
Securing Ownership: What Founders Must Do
IP ownership must be treated as a foundational issue, not an afterthought. At a minimum, founders should ensure:
- Written IP Assignment Agreements
Every developer, contractor, or agency must assign all present and future IP rights to the company. - Founder Agreements
Co-founders should expressly agree that all IP created for the venture vests exclusively in the company. - Employment Contracts with Robust IP Clauses
Employment agreements must clearly confirm employer ownership of IP created in the course of employment. - Early Legal Review
IP issues are far cheaper to resolve at inception than during litigation or investment negotiations. Early legal structuring is prudent risk management, not an optional expense.
Conclusion
In technology ventures, the most valuable assets are often invisible: source code, system architecture, and underlying logic. Yet these assets derive their value not from innovation alone, but from the legal rights attached to them.
Founders who assume ownership without securing it build their ventures on fragile foundations. The lesson is uncompromising: ideas inspire businesses, but contracts secure ownership. In tech partnerships, clarity at the beginning is not merely wise; it is indispensable.
REFERENCE
- Check World Intellectual Property Organisation (WIPO), Copyright in Software and Computer Programs, accessed on 23rd February, 2026 ↑
- Copyright Act, 2022, s. 1 ↑
- Check Nimmer on Copyright, Authorship and Ownership of Copyright Works, accessed on 23rd February, 2026 ↑
- Check https://inspeerity.com/blog/intellectual-property-rights/ accessed on 23rd February, 2026 ↑
- Check David Ekanem, ‘Artificial Intelligence and Copyright Protection in Nigeria, Legal Impact and Challenges’(2024)https://sskohn.com/wpcontent/uploads/2024/05/Artificial_Intelligence_and_Copyright_Issues_in_Nigeria_-_2024.pdf accessed 23rd February 2026 ↑
- Check Startup Genome Report, Legal and Structural Causes of Startup Failure accessed on 23rd Febraury 2026. ↑
- Check Tripathi and Ghatak, ‘Algorithms in decision-making House of Commons Science and Technology Committee’(2020) https://publications.parliament.uk/pa/cm201719/cmselect/cmsctech/351/351.pdf accessed 23rd Febraury, 2026. ↑
- Check L Zimmerman, ‘It’s an Original! (?): In Pursuit of Copyright’s Elusive Essence’ (2020), 28
COLM. J. L. & ARTS 187, 194, accessed on 23rd February, 2026. ↑
