When a customer wants ownership of improvements: what it costs to be wrong
When a customer wants ownership of improvements, the real cost sits in the licence position that survives the argument, not in the improvement itself. If the contract is silent, ownership defaults to whoever holds rights in the underlying software, and the customer is left holding a licence to use the improvement, not a right to move it, resell it, or hand it to a new provider. Fixing this after delivery is far more expensive than fixing it in the clause.
The legal basis for ownership of improvements
Directive 2009/24/EC treats a computer program as a copyright work and reserves acts of adaptation to the rightholder unless the parties have agreed otherwise. That default sits underneath every technology contract in the European Union, whether the parties mention it or not. An improvement built on top of licensed software does not automatically belong to the party who paid for the work; it belongs to whoever holds the underlying rights, unless the contract assigns it expressly.
Everything above that baseline is contractual. National contract law governs how an assignment clause is drafted, how it is signed, and what happens if it is missing — and that layer differs by jurisdiction, so it has to be checked locally rather than assumed from the directive alone.
What changes when this goes wrong
Three positions usually collide once a dispute starts: the vendor's rights in its own platform, the customer's paid-for customisation, and any third-party code embedded inside the improvement. None of this is visible while the relationship is working. It becomes visible at renewal, at a vendor's exit, or the moment the customer tries to move the improvement to a different supplier and discovers the licence does not cover that move.
Getting the position wrong at that stage does not just cost legal fees. It can freeze a migration, delay a renewal, or hand the vendor unplanned leverage in a negotiation that should have been routine.
What to do
- Locate the original contract's intellectual property clause and any change order or statement of work describing the improvement — in-house counsel pulls the file.
- Instruct counsel to classify the improvement: a derivative built on the base code, or a genuinely separable module.
- Preserve development records — commit history, specifications, internal correspondence — before memories or systems are archived; the technical lead owns this step.
- State the ownership position in writing to the counterparty before the improvement is used or resold elsewhere. Silence at this stage is read against whoever stayed silent.
- If the contract is unclear, negotiate a short written addendum rather than proceed on an assumed position.
Who decides
The forum is fixed by the contract, not by preference: most technology contracts route ownership disputes to arbitration or to the courts of the jurisdiction named in the governing law clause. The decision turns on the paper record — the licence clause, the change order describing what was built, and correspondence from the time the improvement was made. Which party contributed more hours or more ideas is not the test a decision-maker applies.
If your situation differs
If the contract already assigns "all improvements" to the customer, the dispute narrows to scope: which lines of code actually fall inside that definition, and which sit in the vendor's separate platform.
If the contract is silent and the vendor built the improvement on its own pre-existing framework, the Directive 2009/24/EC default tends to favour the vendor's underlying rights, leaving the customer with a use licence rather than ownership.
If the improvement is later embedded into a tokenised asset or a smart contract layer, the ownership question compounds with control over the contract itself — The issuer loses control of the contract tokenised rights sets out what happens once that control slips.
What raises the cost of getting this wrong
| Factor | Effect on the outcome |
|---|---|
| Contract silent on ownership | Default falls to the rightholder, not to whoever paid for the work |
| Third-party licensed code embedded | That component's ownership is never on the table, only the surrounding integration |
| Improvement already resold to another customer | A retrospective claim becomes a breach dispute, not a negotiation |
| No development records kept | Authorship rests on the counterparty's version of events |
| Dispute already filed | Forum and governing law are fixed by the contract clause, not chosen afterwards |
Sources and limits
This page does not value the improvement, propose a percentage split, or draft the assignment clause — it shows the order of steps and the default position if nothing has been agreed. Where the counterparty sits outside the named jurisdiction, ownership cannot be separated from what can actually be verified about that counterparty. Counterparty in Singapore and its limits in detail sets out what a registry search confirms and what it does not.
The underlying contract documents themselves also need checking before any position is stated in writing. Document in Singapore step by step covers how that check is run.
This assessment is prepared within the technology contracts team. Working with this team describes how the group is organised and how instructions are taken in.
Related situations
A related dispute arises after termination, when the licence itself is the point of contention rather than an improvement built on top of it — see When support ends but the licence continues and its for how that plays out.
Verified
Checked against the EUR-Lex text of Directive 2009/24/EC ahead of publication. National implementing rules on software copyright are not tracked on this page; where that matters, a jurisdiction-specific check is needed before a position is finalised.
Frequently asked questions
What is the first step when a customer wants ownership of improvements?
Locate the licence clause and the statement of work or change order describing the improvement. Ownership cannot be assessed before the paper defining what was actually built is on the table.
Which deadline is already running?
Any notice period the contract sets for raising a claim after delivery or after termination starts from the date the improvement was delivered or the contract ended, whichever the clause names. General limitation periods under the applicable national law also start running from that point, even before a dispute is raised — check the termination clause first.
Who decides, and on what evidence?
The forum named in the contract decides — an arbitration panel or the courts of the agreed jurisdiction — based on the licence clause, the change order describing the improvement, and correspondence from the time it was built. Relative effort or contribution is not the test applied.