Who owns the code and IP when you outsource AI development?
By Irshad Memon|Updated
Short answer
You should, but only a written assignment makes sure of it. Paying for code doesn't transfer copyright by itself. In the UK a contractor usually keeps the copyright unless the contract says otherwise, and in the US commissioned software isn't a "work made for hire". Get a signed, worldwide assignment covering code, prompts, evaluation data and model weights.
Key takeaways
- Paying an outside developer does not by itself make you the owner of the code.
- UK: a contractor usually keeps the copyright unless the contract says otherwise.
- US: commissioned software is not a work made for hire, so you need a written assignment.
- India: an assignment must be in writing; without a stated period or territory it is limited to five years and India.
- Name AI outputs too: prompts, evaluation sets, prepared training data, fine-tuned weights and documentation.
What are the IP rules for outsourced code in the UK, US and India?
In all three countries, the person or company that writes the code starts as the owner unless a written agreement says otherwise. So the contract decides. When the provider is in India, Indian law also shapes how the assignment must be written.
| Country | The default rule | What to do |
|---|---|---|
| UK | A contractor "will usually retain copyright" unless the contract says otherwise (GOV.UK) | Put an assignment in the contract |
| US | Commissioned work is "made for hire" only in nine listed categories, with a signed agreement. Software is not one of them (US Copyright Office) | Get an express written assignment |
| India | An assignment must be in writing and signed. With no period stated it lasts five years; with no territory stated it covers India only (Copyright Act, section 19) | Make it worldwide and for the full term of copyright |
General information, not legal advice. Have a lawyer in your own country review the contract.
What should the IP assignment cover?
Everything produced for you, not only the code. For AI work, that includes prompts, evaluation sets, prepared training data, fine-tuned model weights and documentation. Also check what the provider keeps as its own background IP, and your licence to use it.
- Code, configuration and infrastructure scripts.
- Prompts, system instructions and agent tool definitions.
- Evaluation sets and test results.
- Prepared or labelled training data, and fine-tuned model weights.
- Documentation, diagrams and runbooks.
- Background IP: the provider's own tools or libraries used in your project, and the licence you get to them.
- Open-source licences: which ones the code contains, and whether any restrict how you use it.
When does ownership pass to you?
That depends on the contract. Some pass ownership when the work is created, others only when invoices are paid. Some freelance marketplaces' default terms work this way, passing the work to the client once the freelancer is paid in full. Know which applies before work starts.
- On creation: you own each piece of work as it is written. This is the clearest position for you.
- On payment: you own it only once it is paid for. Some freelance marketplaces' default terms work this way unless the parties agree otherwise.
- Either way, keep the code in your own repositories from day one, so you hold it whatever happens to the relationship.
Who owns AI-generated code?
Possibly nobody, in the copyright sense. In January 2025 the US Copyright Office said AI output is protected only where a human author determined enough of its expressive elements, and that prompts alone do not qualify. So contracts should cover AI-assisted work, and confidentiality matters as much as ownership.
- The US Copyright Office's January 2025 report sets out its position on AI-generated material (US Copyright Office).
- Ask how the provider's engineers use AI coding tools, and who reviews what those tools produce.
- Make sure the contract's assignment and confidentiality terms cover AI-assisted work as well as hand-written code.
What should happen to the IP when the engagement ends?
Nothing should change hands, because you should already have it. The code, prompts and documents should be in your repositories and accounts throughout. At the end, the provider hands over anything else it holds for you, and you remove its access.
- 1
Check your repositories
Code, prompts, evaluation sets and documentation are all there and current.
- 2
Collect the rest
Credentials, model weights and any files held outside your systems.
- 3
Get a handover
Architecture notes and runbooks, so your team or the next provider can carry on.
- 4
Remove access
Close the provider's accounts and rotate any shared secrets on the last day.
Where does Webify.AI fit?
Our contract assigns the IP in all the code to you, the work is committed to your repositories, and the developers are named in the contract. Ending the engagement doesn't affect your ownership of the code.
- We sign your NDA before the first call.
- A person reviews all AI-assisted code, and your code never goes into public AI tools.
- Nothing is subcontracted without your consent.
- Our security page summarises these terms. Ask for the full contract and have your lawyer review it before you sign.
Frequently asked questions
If I pay a developer to write code, do I own it?
Not automatically. Payment alone doesn't transfer copyright in the UK or the US. You need a written assignment in the contract.
Who owns the prompts and model weights in an AI project?
Whoever the contract says. Name them in the assignment, along with evaluation sets, prepared training data and documentation, or ownership may be unclear.
Does Indian law affect who owns code written in India?
Yes. India's Copyright Act requires a written, signed assignment. If it states no period, it lasts five years, and if it states no territory, it covers India only. So make the assignment worldwide and for the full term.
Is code written with AI tools protected by copyright?
Only where a human author determined enough of its expressive elements, according to the US Copyright Office in January 2025. Cover AI-assisted work in the contract, and protect it as confidential.
What happens to our code if we stop working with a provider?
If the code was in your repositories and the IP was assigned to you, you keep everything. Remove the provider's access and ask for a handover of anything held outside your systems.
Sources
Checked on 30 October 2026. Webify.AI figures are our published prices.
Ask for our contract terms
Tell us the role and when you need someone. We'll email two named engineers with their experience and availability within 48 hours, and you choose who to interview.
- No cost to receive profiles
- Two-week trial with the developer you choose. No charge if you stop within the first five working days.
- Invoiced in USD, GBP, EUR, CAD or AUD by local transfer; IP assigned to you.