Who Owns the Code: IP Assignment in a Georgian Software Company

In Georgia code is protected by copyright, as a literary work, from the moment it is written, and the Law on Copyright and Related Rights sets a default that favours the company: the property rights, meaning the economic rights, in a work an employee creates in connection with official duties, or a contractor creates in fulfilling an order, belong to the employer or the client unless an agreement says otherwise. A default is not a chain of title. It covers only work tied to the duties or the order, it gives way to any contrary clause, it does not reach code written before the contract or before the company existed, and it never moves the author's moral rights. So the working rule is simple: everyone who writes code signs a written assignment of the economic rights.

Software is a literary work under Georgian law

The Law lists computer programs among literary works and protects every kind of program, in any language and form, source code and object code alike, together with the preparatory design material. Protection arises when the work is expressed in a form that can be perceived and reproduced, and no registration or other formality is needed. Two limits matter. Copyright does not cover ideas, methods, processes or systems, so it protects the code as written, not the algorithm behind it. And the author is always a natural person: a company can hold the property rights in code, but it is never its author. Georgia is a party to the Berne Convention, so the same code is protected in the other member countries without formalities.

Code an employee writes belongs to the employer, within the job

The default works where the code is connected with the employee's official duties, so the first document that matters is the employment contract. A developer whose contract says 'project manager', or says nothing about development, leaves the company to prove what the duties were. The default also says little about a tool the developer wrote before joining, or a side project built in the evenings that later became a product module. Three lines close the gaps: name software development as the duty, add an express clause on property rights, and attach a list of the code the employee brings in. Our article on hiring a first employee covers the rest of the contract. One point favours the employer without any drafting: the author's right to withdraw a work from use does not apply to a service work, which the English translation of the Law calls a work for hire.

Code a contractor writes: the default helps, the contract decides

For a work made to order the Law gives the property rights to the client unless the agreement provides otherwise, and it requires the agreement for the creation of a work to be in writing. In practice four things defeat that default. There is no written order, and nothing shows what was commissioned. The contractor's own terms, or a platform's, reserve the rights until full payment or grant only a licence, and that is an agreement providing otherwise. The contractor is abroad and the contract is governed by another country's law; in many legal systems a freelance author keeps the rights until they are transferred in writing. Or the contractor passes the work to someone else: under the Law the author creates the work personally unless the agreement says otherwise, and third parties may be brought in only with the client's consent.

The Law adds a limit in its provision on agreements for the creation of a work: a transfer of the right in a work the author may create in the future cannot be the subject of an agreement. A clause that sweeps in everything a developer will ever write is exposed to that rule. A clause tied to a described project, with each delivery listed in a signed acceptance act, stands on firmer ground. Whether the person is a contractor at all, or an employee in substance, is a separate question.

Moral rights stay with the author

• The right to be recognised as the author and to have the name indicated.
• The right to use a pseudonym or to remain unnamed.
• The right to permit changes to the work, or to object to changes made without consent.
• The right to protect the work from distortion that harms the author's honour or reputation.

The Law calls these personal non-property rights and lists others beside them, such as deciding when and how the creation of a work is made known. They belong to the author independently of the property rights and cannot be alienated during the author's lifetime, so a clause in which a developer 'assigns all moral rights' transfers nothing. What a contract can do is record how the author exercises them: consent to the company modifying, adapting and combining the code, and agreement that releases carry the company's name without individual credit. The Law itself lets the employer put its own name on a service work. Drafted that way, the company can maintain its product and the author's rights are respected as the Law requires.

What a working assignment clause contains

• The work: the project, repository and modules, described so that a stranger could identify the code.
• The rights: all property rights the Law lists, including reproduction, distribution, adaptation, translation into another programming language and any other alteration, stated to be exclusive. A right passed under a copyright agreement is treated as non-exclusive unless the agreement says otherwise.
• Territory and term: worldwide and for the full term of copyright. Under the Law at the time of writing, a licence with no territory covers only Georgia, and one with no term can be cancelled by the author after three years on six months' written notice.
• The moment of transfer: on creation or on each acceptance act, with no condition left open.
• Payment: a statement that the salary or fee covers the transfer.
• Moral rights: the consents described above.
• Earlier and third-party code: a schedule of what the developer brings, a licence to it, and disclosure of every open-source component.
• Housekeeping: no subcontracting without consent, help with any deposit, Georgian law, and a Georgian text beside the English one.

Open-source components are licensed, not owned

An assignment transfers only what the developer holds. Code taken from an open-source project stays with its authors and comes with a licence, and the company's rights in that part of the product are exactly what the licence grants. Some licences require software built on the component to be released on the same terms when it is distributed, which can be incompatible with a closed product. The Law gives the lawful holder of a copy only narrow freedoms: changes needed to run the program, a backup copy, and decompilation for interoperability under strict conditions. Keep an inventory of every component, its licence and where it is used, and make the developer's contract require disclosure.

Why the ownership trail matters to investors and to Virtual Zone status

An investor's lawyers ask for the chain of title: a list of everyone who has contributed code, matched to a signed document for each. Gaps are closed before the money arrives, at the founders' cost, by people who may have left. The same trail supports a Virtual Zone file. In outline, the Tax Code exempts profit from supplying, outside Georgia, information technology created by the Virtual Zone company itself, and the Revenue Service tests who writes the code and under which contracts, as our article on the evidence for Virtual Zone status sets out. Contracts showing that the developers work for the company and that the rights sit with it make the claim that the software is the company's own far easier to support. A founders' assignment sits naturally beside the vesting terms described in our article on shareholders' agreements.

Optional deposit at Sakpatenti

The Law lets an author or other right holder deposit the original or a copy of a work with Sakpatenti, Georgia's National Intellectual Property Center. Deposit does not create the right. Its value is evidential: unless the contrary is proved, the person named in the deposit certificate is treated as the author or right holder. A fee set by government ordinance is payable, and the deposited material is made public only if the holder asks. The applicant answers for the accuracy of what is filed, so deposit after the assignments are signed, in the name of the company that holds the rights.

What this article does not answer

It does not cover patents, trade secrets or database rights, or the brand, which is protected by a trademark and is the subject of our article on registration at Sakpatenti. It does not tell you how a developer's home country treats the same contract, or which law a court there would apply; where an important contributor is abroad, that question needs a lawyer in that country. It leaves out code produced with AI tools and the tax treatment of payments for rights. We draft and review the documents under Georgian law, and we say so when a gap can only be closed by someone else's signature.