IT AND SERVICE CENTRES

Securing Rights in Software within the Company: Employees and Freelance Developers

For a company building a development team in Türkiye, the source code produced by that team is its most important asset. Under Turkish law, however, who owns the source code depends on whether the person writing it is an employee or a freelance developer and on how the contract between them is structured. This difference comes to the surface particularly on the sale of the company, in a financing round or when parting ways with a developer.

Experience shows that gaps in the chain of title are often discovered only years later in pre-acquisition due diligence, when remedying them is both time-consuming and costly. The following sections address the main points that companies developing software in Türkiye should consider to secure their rights.

Legal nature of software

Under Turkish law, computer programs, including their preparatory design material, are protected as works. Rights in a work arise, as a rule, with the person who creates it; they comprise economic rights such as reproduction, adaptation, distribution and communication to the public, as well as moral rights attached to the author's person. Moral rights cannot be transferred; however, certain arrangements may be made by contract regarding their exercise.

Software developed by employees

The authority to exercise the economic rights in works created by employees in the course of their duties belongs to the employer unless otherwise agreed; this does not mean, however, that authorship or all rights automatically pass to the employer. This rule provides the company with important protection for developers employed under employment contracts. Its scope depends, however, on the work actually having been created within the scope of the employee's duties; disputes may arise over software that the employee develops outside working hours and with their own resources.

Employment contracts should therefore ensure that the employee's job description expressly covers software development, determine the scope of the authority to exercise the economic rights in software developed within the scope of their duties, and make legally valid and specific arrangements regarding the exercise of moral rights. For patentable inventions, separate rules on employee inventions apply; this topic is discussed in the relevant Expertise article.

Freelance developers

The position is different for freelance developers and software companies. In contracts with them, the transfer of economic rights is subject to statutory formal requirements; the transfer must be made in writing and the rights transferred must be listed individually. A general statement in an order form or the mere fact that payment has been made does not mean that the rights have passed to the company.

In practice, it is common, particularly at the start-up stage, for the founders and first developers to contribute as freelancers without the transfer of rights ever being put in writing. Closing this gap with a retroactive transfer agreement while the relationship is still good is the most effective protection against later disputes.

Pooling rights within the group

Where software developed by the Turkish company is to be used by the parent company or the group, it must be decided separately whether the rights remain with the Turkish company or are transferred to the parent company. This choice directly affects the content of the intra-group services agreement and the tax consequences; the tax aspects should be assessed in coordination with tax advisers.

Open source and third-party components

The use of open source components in software development is customary. However, some open source licences may require the source code of software incorporating those components to be disclosed as well. Recording which components are used under which licences and binding developers to an internal rule on this point are important both for the commercial value of the product and for any due diligence review.

Conclusion

Securing rights in software developed in Türkiye within the company is subject to different rules for employees and freelance developers. Job descriptions and employment contracts that expressly cover software development, written transfer agreements with freelance developers listing the rights individually, timely remedying of gaps from the start-up stage and recording the use of open source protect the company's most valuable asset. General questions of IP and IT law are addressed on the page of the relevant practice area.