Who Owns the Code Your Nearshore Engineer Writes?
You signed the staffing agreement, the engineer started three weeks ago, and the code is sitting in your repo with your CI badge on it. So you own it.
Under US copyright law, for a non-employee writing software, that assumption is wrong by default — and the clause that fixes it is missing from a surprising number of staffing agreements. It stays invisible until an acquirer’s counsel asks for your IP schedule, at which point it becomes expensive.
This covers what the default rule actually is, the three places the ownership chain breaks, a clause checklist you can hand to your lawyer, and five questions to ask any staffing vendor before you sign.
This is not legal advice. I’m describing considerations, not conclusions, and nothing here accounts for your specific facts. Have counsel review your actual agreement — including counsel qualified in the country your engineer works from.
The default rule is not what most engineering leaders assume
“Work made for hire” is the phrase everyone reaches for, and it means something narrower than it sounds. Under 17 U.S.C. §101, a work made for hire is either work prepared by an employee within the scope of employment, or work specially ordered or commissioned that falls into one of nine enumerated categories, where both parties expressly agree in writing.
Those nine categories are: a contribution to a collective work, part of a motion picture or other audiovisual work, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, and an atlas.
Read the list again. Software is not on it. There is no category it fits.
So when a contractor writes code for you, work-for-hire language on its own generally doesn’t move ownership anywhere. Absent an express written assignment of copyright, the author keeps it. You may well have an implied license to use what you paid for. You do not have title, and a license is not what a diligence checklist is asking about.
Three places the chain breaks
1. The agreement says “work for hire” and stops there
The most common failure, and almost always an accident of drafting. Someone adapted a US employment template, kept the work-for-hire recital, and never added a fallback.
The fix is boring and well-established: a present-tense assignment that operates on its own, plus work-for-hire language framed as “to the extent applicable.” Belt and suspenders. Any IP attorney will have the standard formulation on hand — this is not a clause you should be paying someone to invent.
2. Your contract is with the firm; the code is written by the engineer
This is the one specific to staff augmentation, and the one teams miss most often because the paperwork looks complete.
You sign with a vendor. The vendor assigns to you. But the vendor can only assign what it actually holds — and it holds only what its individual engineer assigned to it. If there is no signed assignment between the vendor and the engineer, or if the one that exists isn’t enforceable in the form it was signed, the chain has a gap in the middle and the vendor’s assignment to you conveys less than it appears to.
Chain of title is a chain. Ask to see both links, not just the one addressed to you.
3. Assignment of future work isn’t treated the same everywhere
An assignment of copyright in work that doesn’t exist yet is handled differently across jurisdictions. Some require the work to be identified with specificity. Some impose form requirements. Some have mandatory local rules that a foreign choice-of-law clause won’t displace.
If your engineer is in Colombia, Mexico, Argentina or Peru, whether your assignment works is a question of that country’s law — not Delaware’s — and it’s a question for counsel who practices there. I’m flagging the issue, not answering it.
Moral rights are the sharpest version of this. In much of Latin America, moral rights — attribution and integrity — are treated as personal to the author and not assignable, even by agreement. A US-style “assigns and waives all moral rights” clause may not do what it says on its face. In practice this rarely stops you shipping anything. It does surface in diligence, and it’s better to have an answer ready than to be drafting one under a signed LOI.
What this looks like when it goes wrong
An illustrative scenario, not a client matter:
A 45-person company is three weeks into an acquisition. The acquirer’s counsel sends a routine IP schedule request: for every person who contributed code in the last four years, produce the signed assignment.
Two years ago the company ran three contract engineers through a staffing firm for seven months. They built the billing service. It is still in production and it touches revenue.
The staffing agreement is six pages. It has a work-for-hire clause and no express assignment. The staffing firm has since been acquired, and nobody there can locate the individual engineer agreements.
None of this is fatal. It is remediable — retroactive assignments where the engineers can be found and are willing, an indemnity, a holdback against the purchase price. All of it costs time, legal fees, and negotiating leverage, at the one moment in the company’s life when leverage is worth the most.
The version of this that costs nothing is the one where somebody spent an hour on the agreement before it was signed.
The clause checklist
Hand this to counsel. It is a starting list, not a substitute for review.
| Clause | What to check for |
|---|---|
| Present assignment | “Hereby assigns,” not “agrees to assign.” Present-tense operative language, effective on signature. |
| Work for hire, secondary | Keep it, but framed as “to the extent the work qualifies.” It should never be the only mechanism. |
| Scope of work product | All work created in connection with the engagement, in any medium: code, docs, designs, tests, infrastructure config, prompts. |
| Further assurances + limited power of attorney | Obligation to sign whatever is needed later, and a fallback if the person can’t be reached. This is the clause that saves you three years out. |
| Moral rights | Waiver where waivable; a covenant not to assert where it isn’t. Ask counsel for the local-law-aware wording. |
| Pre-existing IP | Contractor’s prior tools and libraries carved out, listed explicitly, with a broad license back for anything embedded in the deliverable. |
| Third-party and open source | Disclosure obligation plus a license-compatibility warranty. AI-assisted code belongs in this section too. |
| Chain of title from the vendor | Vendor represents it holds a valid assignment from each individual engineer, and will produce it on request. |
| Governing law, forum, survival | IP and confidentiality obligations survive termination. Confirm the forum is one you’d actually litigate in. |
Five questions for any staffing vendor
- Does your agreement contain a present-tense assignment of IP to us, separate from any work-for-hire language?
- Do you hold a signed IP assignment from each individual engineer, and will you produce it on request?
- Which country’s law governs your agreement with the engineer, and has local counsel reviewed the assignment for enforceability there?
- How do you handle moral rights in jurisdictions where they can’t be assigned?
- What’s your disclosure process for open-source and AI-assisted code?
A vendor that answers these crisply has done the work. A vendor that says “our contracts are standard” is telling you they haven’t looked. Neither answer requires you to be a lawyer to evaluate.
Where nearshore is the wrong answer
Worth saying plainly, because the contract questions above are only worth answering if the model fits in the first place.
- Regulated data with residency or citizenship requirements. Some defense, government and healthcare work carries constraints where the answer is a US-based employee and no contract structure changes that. The compliance overhead can exceed the savings.
- No manager with bandwidth. A contract engineer amplifies the engineering management you already have. It does not create any. If nobody has three hours a week for onboarding and review, you’ll get a worse outcome than staying short-staffed.
- Genuinely undefined work. Open-ended discovery with a spec that moves weekly is where contract engagements go badly, in any geography. Define it first, or hire an employee who can define it.
- You can’t get the agreement reviewed. If your legal function is one overloaded generalist and an international IP agreement will sit unread for a month, fix that before you sign. Signing an unreviewed cross-border agreement to save eight weeks of hiring is a bad trade.
How we handle it
On a staff augmentation engagement, SkilldLabs holds the employment and/or Independent Contractor contract, payroll, benefits and local compliance for each engineer, rather than leaving you to assemble that country by country. That structure exists partly for this reason: the entity that employs the engineer is the entity that needs the assignment in place.
We would rather you put the five questions above to us than take any of it on faith. It’s the same reason we publish the five gates every engineer clears before you meet them and what a LatAm engineer actually costs, with the method attached, instead of asking you to trust a number. Our engagement terms — no upfront payment, no minimum contract, no exclusivity — are published for the same reason.
Before you sign
If you’re evaluating a nearshore staffing agreement and want a second read on what to check, we’ll do it on a call — including when the answer is that the vendor in front of you has it right. Tell us what you’re looking at.