Who Owns the Code? Intellectual Property in Software Projects Under Serbian Law
You commission software development, pay the developer, receive the code — and assume you are the owner. Logical, right? In reality, Serbian law can catch you off guard: copyright in software arises automatically in favour of the individual who wrote the code — not the company that paid for the work.
This is precisely where disputes begin that can paralyse an IT company, terminate a business relationship, or leave a startup without its core product.
Software as a Copyrighted Work: The Legal Basis
Under the Law on Copyright and Related Rights of the Republic of Serbia, computer programmes (together with accompanying technical and user documentation) are classified as literary works in writing and enjoy copyright protection from the moment of creation — with no registration, no formalities, and automatically.
The following are protected:
- Source code;
- Object code;
- User and technical documentation;
- Databases (both as copyrighted works and as the subject of related rights — dual protection);
- Preparatory design material for software development.
Importantly, an idea, an algorithm, or a functional feature is not in itself protected — only the concrete form in which it is expressed (i.e., the code) is. This is a critical distinction that many companies fail to grasp until a dispute arises.
Employed Developers: Who Owns Code Created in Employment?
The law distinguishes between copyrighted works created within an employment relationship and those created outside of one.
When a developer writes code as part of their employment duties, the economic copyright in that work automatically transfers to the employer — provided the employment contract or the employer’s general act does not provide otherwise. Moral rights (the right to attribution, to have one’s name credited) remain with the employee permanently and cannot be transferred by contract.
Problems arise when:
- A developer works on the side and it is unclear whether the code was created within or outside the employment engagement;
- The employment contract contains no intellectual property clause;
- An employee uses personal time and personal equipment to contribute to a company project.
Recommendation: Every developer’s employment contract should include an explicit intellectual property clause clearly stating that all works created within the scope of employment duties (or in connection with the employer’s business activities) are transferred to the company.
External Contractors and Freelancers: A Double Risk
When an external developer or freelancer is engaged, the situation is more complex. Unlike an employee, an external contractor retains economic copyright in the code they have written — unless agreed otherwise.
This means that a company which pays for software development but lacks an appropriate contract clause may receive only a licence to use the code — not ownership of it. The difference is enormous: a licence holder cannot freely modify the code, resell it, incorporate it into other products, or use it after the licence expires.
A software development contract must include:
- An explicit clause assigning economic copyright to the client;
- The scope of rights transferred (modification, distribution, incorporation into other products, commercial use);
- Provisions on third-party components (open-source, libraries) and applicable licence restrictions;
- A confidentiality clause prohibiting unauthorised use;
- The contractor’s liability in the event the code infringes third-party rights.
Databases: Dual Legal Protection
Databases enjoy a special status under Serbian law — they can be protected both as copyrighted works (if the selection or arrangement of data is original) and as the subject of the related rights of the database producer. This means that even a company operating an e-commerce platform or a SaaS tool with a large user database is not automatically protected — the protection depends on who created the database and what the contract says.
Disputes That Happen in Serbia: The Most Common Scenarios
Scenario 1: A freelancer writes an application backend and is paid by the company. A year later, the freelancer launches their own startup and incorporates the same code. The company has no protection because the contract contained no rights assignment clause.
Scenario 2: A developer leaves a company and takes “their” code — written in their spare time on a personal laptop — claiming it was not created within the scope of employment duties. The dispute could have been avoided with a clear contractual clause.
Scenario 3: A startup engages an agency to develop an application. The agency uses open-source components licensed under GPL. The startup is unaware that the GPL licence requires their application to also be released under the same terms — a potential legal catastrophe.
Software Deposit as Evidence
Serbian copyright law requires no registration to obtain protection, but the Intellectual Property Office offers an optional work deposit service, which serves as material evidence in potential court proceedings — establishing who created a work and when. For early-stage IT companies, this is a relatively inexpensive and readily accessible protective measure.
Conclusion
Ownership of software is not the same as paying for its development. Under Serbian law, copyright vests in the individual — and remains there unless the contract says otherwise. Every IT company that engages developers — whether as employees or external contractors — must have clear contractual intellectual property clauses. The absence of such clauses is not an administrative oversight — it is a risk that can threaten the very foundation of your business model.
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