The Source (Code) of Discord: Who Really Owns the Software?

In the field of software—and more broadly in the realm of intellectual works—non-specialists often assume that the original copyright holder is the individual or company responsible for its creation. In reality, this is not always the case. In many situations, the creator and the holder of the economic rights are different parties from the outset.

This issue was recently addressed by the IP Court of Brescia (order of 14 April 2025), which was called to resolve a dispute between two former partner companies, both claiming ownership of  software developed by one of them, to manage the electronics of industrial machines manufactured by the other.

When, after a few years, the partnership ended, the second company—having access only to the software application—demanded the delivery of the source code. The developer company refused. Consequently, the former company turned to the IP Court of Brescia seeking urgent measures.

At the hearing, the defendant argued that it alone was the rightful owner of the programs in the lawsuit, having developed them, and that the other company had only been granted user licenses. To make its case, it produced invoices issued to the applicant that explicitly referred to the software, claiming that the amounts charged were inconsistent with a full transfer of ownership rights.

However, the Brescia Court upheld the position of the applicant, ruling that no formal transfer was required for the latter to hold ownership of the software.

The judge preliminarily recalled that copyright protection includes both source code and object code and that, in the case of software commissioned from a third party, “the commissioned work is originally acquired by the commissioning party, which becomes the exclusive holder of the economic exploitation rights over the source and object code, unless otherwise agreed between the parties.”  This is a judge-made rule drawn through an analogy with the legal provision that, in employment relationships, economic rights are granted over software created by an employee to the employer, provided the work is performed “in the execution of duties or on instructions from the employer” (Art. 12-bis of the Italian Copyright Law).

In the case at hand, evidence showed that the developer had performed various services over the years concerning the machines of the commissioning company, acting as its contractor. Although the individual contracts did not explicitly mention software development, the parties had signed framework agreements which explicitly assigned to the client company ownership over any software developed and, more generally, intellectual property rights over all results generated in the performance of the contracts.

The judge concluded that the development of software used to manage the electronics of some of the applicant’s machines fell within the scope of these contracts, and that the software copyright belonged exclusively to the client.

The invoices produced by the developer, according to the court, could not constitute proof of an agreement to the contrary. Not only did they lack any reference to licenses, but, more importantly, ownership of the software (including source and object code) by the commissioning party is deemed original, not derivative, and is independent of the amount paid for the work.

The Court thus granted the seizure of the software in the lawsuit (to be executed by removing all copies of the source code from the developer’s systems, transferring them to secure storage, and entrusting them to a court-appointed expert) and prohibited its use, under penalty of a €5,000 fine for each violation.

Incidentally, the proceedings also involved the protection of know-how, specifically technical drawings belonging to the requesting company but retained by the developer. In respect to these, too, the judge ordered seizure and injunctive relief, recognising them as trade secrets pursuant to Art. 98 of the Italian Industrial Property Code, based on the presence of the three required conditions: secrecy, economic value, and reasonable protective measures—including explicit confidentiality agreements. We have addressed this argument here and here.

Final Considerations

Software development companies should keep in mind that:

• Software developed independently is—in principle—owned by the developer, who may use, license, or assign it;

• Software developed on commission is—in principle—owned by the commissioning party, unless otherwise agreed;

• If the developer intends to retain rights over commissioned software, and if it has the negotiating power to do so, it must ensure that appropriate contractual clauses are included in the development agreements.