Copyright in software and digital content

Who owns the code when a software agency delivers an app? Who holds the copyright to a website created by a freelancer? And what happens to digital illustrations made as part of a consultancy task?

These questions are far from academic; they can decide whether a business owns its own technology or depends on a supplier's goodwill. And they arise daily in the digital economy.

This guide goes through copyright in software and digital content in Denmark: what the law says, when the rights automatically belong to the client, and what the contract must contain to secure them.

The Copyright Act and software

Software is protected by the Copyright Act on a par with literary works, and the Act contains special rules on computer programs. Protection arises automatically; no registration is required.

For a creation to be protected by copyright, it must have originality, that is it must be original and bear the mark of a personal, creative effort. For software the threshold is generally low.

What is protected?

• Source code: the primary form of protection
• Object code (compiled code)
• Program structure and algorithms to the extent they are expressed originally
• Interface design (UI) as a graphic or artistic creation
• Databases: protected as a compilation and via the special database right

What is not protected:

• The idea behind the program (only the expression is protected, not the idea)
• Standard functions and general methods
• Algorithms in themselves (unless expressed concretely)

Ownership: freelancer vs. employee

Software created by a freelancer or consultant

The starting point is clear: the creator owns. A freelancer who writes code as a rule owns the copyright to the code, unless otherwise agreed in the contract.

This surprises many clients. They pay for the software and assume they own it. But without an explicit assignment clause in the contract, that is not necessarily the case.

The consequences can be serious:

• The client can use the software under the contract but cannot readily modify or resell it
• The freelancer can in principle use the same code in other projects
• The client cannot sell the business with full ownership of the software

Software created by an employee

For employees, section 59 of the Copyright Act applies: the copyright to a computer program created by an employee in the course of the work or on the employer's instructions passes to the employer. It is a statutory transfer; no explicit agreement is needed. The rule can be departed from by agreement.

Note that section 59 applies specifically to computer programs. For other types of works created by an employee, the transfer of rights follows an unwritten main rule that the employer obtains the rights necessary for the business's ordinary operation.

Contracts and copyright: what should be agreed?

Because freelancers and consultants as a rule own their own work, the contract is decisive. There are three models:

Model 1: assignment of copyright

The freelancer assigns all economic copyright to the client on delivery. The client then owns the software fully and can modify, further develop and sell it.

Advantages: the client has full control. Disadvantages: the freelancer cannot reuse the code in other projects.

Wording:

"The Supplier assigns on delivery all economic copyright, including the right to alteration, further development and assignment, to the Client for all software and digital content created under this project."

Model 2: exclusive licence

The freelancer keeps the copyright but gives the client an exclusive, irrevocable licence to use, modify and further develop the software.

Advantages: the freelancer can keep their credit and possibly reuse basic patterns. Disadvantages: legally more complex, and on a business sale it can complicate due diligence.

Model 3: non-exclusive licence

The freelancer keeps the rights and grants a non-exclusive use. Typically used for generic components and libraries included in the deliverable.

Recommendation for clients: for core business software you should use Model 1 (full assignment) or Model 2 (exclusive licence). For standard libraries and third-party components, Model 3 is normal practice.

Third-party components and open source

Modern software almost always contains open source components and third-party libraries. Here the copyright is not assigned to the client, and it must be handled correctly.

Open source licences: what do they mean?

Licence	Requirement	Risk
MIT, BSD, Apache 2.0	Attribution	Low, allows commercial use
GPL 2/3	Copyleft, all derived code must be published under the GPL	High for proprietary software
LGPL	Copyleft for the library, but not your own code	Moderate
Creative Commons	Varies greatly	Always check the specific variant

GPL contamination is a real risk: if GPL code is included in a proprietary product, it can require the whole product's source code to be published.

A good contract should require the supplier to:

• State all open source components used
• Document the licences
• Avoid GPL licences in the core system unless otherwise agreed

Digital content: text, illustrations and videos

The same principle applies to other forms of digital content: text, illustrations, graphic designs, photographs and videos created by a freelancer.

Who owns what?

The freelancer: as a rule the owner of everything created under the project.

The client: a right of use within the agreed purpose, and more if an assignment is agreed.

Example: a copywriter writes blog articles for a business. Without an explicit assignment clause, the business does not necessarily have the right to let others further develop the texts or use them for purposes beyond the agreed one.

Moral rights

Copyright has two dimensions:

• Economic rights: can be assigned to others
• Moral rights (droit moral): the creator has the right to be credited and to oppose derogatory alterations of the work

Under section 3(3) of the Copyright Act, moral rights can only be waived for a use of the work that is limited in nature and scope. You cannot get a supplier to waive all moral rights generally, but you can agree that the supplier is not credited in a specific, defined context and that the client can make certain alterations.

Requirements for the contract: a concrete checklist

For software and digital content projects, the contract should specify:

• Ownership: who owns the software or content on delivery?
• Licence type: assignment, exclusive or non-exclusive licence?
• Open source: the supplier states and documents all components
• Third-party rights: the supplier warrants that the deliverable does not infringe third-party rights
• Moral rights: to what extent are they waived?
• Further development: the client's right to modify and further develop
• Escrow: source-code escrow on the supplier's bankruptcy?
• Sub-suppliers: a requirement that sub-suppliers' rights are assigned to the client

Registration and proof of copyright

Unlike patents and trademarks, copyright requires no registration. The right arises automatically on creation.

But proof of when and by whom a work was created can be decisive in a dispute. Practical ways to document it:

• Git history: a commit log with timestamps is strong evidence for software
• Version history: saved versions with metadata
• Email: correspondence about the creation process
• Timestamping: in some cases a timestamped hash of the code can be kept as documentation

Frequently asked questions

Do I own the code a consultant has written for me if I have paid for it?

Not automatically. You own the right to use the code within the agreed purpose. Full ownership requires an explicit assignment clause.

Can a freelancer reuse code from my project in other projects?

It depends on the contract. If you have an assignment clause, the answer is no. Without a clause, the answer is possibly yes for generic components, but it is a grey area.

What is a source-code escrow agreement?

An escrow agreement ensures that a neutral third party holds a copy of the source code and gives the client access to it if the supplier closes, refuses to provide support or breaches the contract.

Does copyright protect me against someone copying my app idea?

No. Copyright only protects the expression (the specific code), not the idea. Competitors can lawfully build a similar app. For technical inventions, a patent is the right protection.

Who owns the rights to AI-generated code?

A growing question without a final answer. In Denmark the starting point is that copyright requires a human creator. Purely AI-generated code probably has no traditional copyright protection, but the person who designs the prompt and selects and edits the output may, depending on the circumstances, have a claim.

Conclusion

Copyright in software and digital content is too important to leave to interpretation. The starting point is that freelancers and consultants own their own work, while a computer program created by an employee passes to the employer under section 59. A clear contract from the start, setting out ownership, licence type, open source matters and moral rights, ensures that you own what you think you own.

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The content of this article is for guidance only and does not constitute legal advice. Consult a lawyer for advice on your specific situation.