Source code ownership in Nepal depends on who wrote the software, how the work was organised, and any written transfer. The Copyright Act 2059 makes the author the first owner (Sec. 6(1)); payment alone does not transfer ownership, so take a signed written assignment (Sec. 24). Startups should document the chain rather than rely on job titles or repository access.
Key takeaways
- Computer programs can be protected works under the Copyright Act 2059.
- Sec. 5 says registration is not required to acquire copyright.
- Sec. 6 starts with the author; payment alone does not move ownership.
- Sec. 24 requires a written agreement to transfer economic rights.
- Repository control, payment and authorship are different facts.
- Open-source and third-party components remain subject to their licences.
- The app name and logo need separate trademark planning.
Is source code protected by copyright in Nepal?
Yes. The Copyright Act includes computer programs among protected works. Sec. 5 states that registration is not required to acquire copyright, so eligible original code does not wait for a certificate before protection can arise.
Copyright protects original expression in code, documentation, interface artwork and related material. It does not monopolise a software idea, desired function, programming language, principle or method of operation.
Who is the default owner?
Sec. 6(1) makes the author the first owner of economic rights as a starting rule. That is not the end of the analysis because Sec. 6(2) sets specific exceptions for how some works are prepared.
Identify every contributor and the circumstances of the work. A founder's pre-company prototype, an employee feature, an agency rewrite and an open-source package can sit in one repository under different ownership and licence rules.
What happens when the startup pays a developer?
Paying a developer should not be relied on to make the code yours. Sec. 6(1) makes the author the first owner, subject to the specific exceptions in Sec. 6(2), and a signed written assignment under Sec. 24 is what secures the startup's title.
The facts still require care: what work was commissioned, who paid, whether subcontractors contributed, and what pre-existing tools were included. Put the result in writing rather than asking an invoice to answer every issue.
What does direction or initiation change?
Sec. 6(2)(b) addresses a joint work prepared at another person's or organisation's initiation or direction. The person or organisation directing or initiating that joint work holds the economic right under the statutory wording.
“Direction” should not be assumed from vague supervision. Preserve specifications, tickets, approvals, contracts and payment records showing how the work was organised. Ask an advocate to apply the section to disputed facts.
Why is a written agreement still necessary?
Sec. 24 says an owner can transfer all or part of the economic rights by a written agreement. A startup may need that transfer when founders created code before incorporation, an acquired company owns a module or the intended company owner differs from the statutory owner.
The agreement should identify the work, rights, parties, territory, duration and permitted uses. Sec. 24(3) limits the recipient to the rights transferred, so vague language can leave important exploitation rights outside the deal.
Does incorporation transfer founder code?
No automatic transfer should be assumed. A founder may have created the prototype before the company existed, using personal equipment and accounts. Incorporation creates the entity but does not itself document how that earlier asset moved into it.
Prepare a written assignment identifying the repository, versions, documentation and related assets. Record the transaction in company files and check whether co-founders, agencies or former employers may have competing claims.
What should employee agreements cover?
An employment agreement should describe the work, confidentiality duties, permitted use of pre-existing material, repository access and return of assets. It should also address ownership consistently with the Act rather than importing a foreign template without review.
Separate employee-created code from personal projects and earlier libraries. A policy that claims everything written during employment can create uncertainty when the work falls outside assigned duties or uses material the employee cannot transfer.
What should a contractor agreement cover?
Identify deliverables, milestones, repositories, documentation, dependencies, credentials, acceptance and subcontractors. State the ownership or licence position for newly created and pre-existing material separately.
Require a component list and final handover. Payment evidence helps, but the written assignment is what transfers the economic right, and clear terms reduce argument over scope. Do not rely on “work for hire” language copied from another jurisdiction without Nepal review.
What are moral rights?
Economic rights and moral rights are not identical. Sec. 8 protects the author's rights of attribution and integrity and states that moral rights cannot be transferred during the author's lifetime.
A company can hold economic rights while individual contributors retain moral interests. Credit, permitted modification and removal of names should therefore be handled thoughtfully in agreements and product records.
How should open-source code be handled?
Open-source software remains copyrighted. The licence grants permission subject to conditions that may concern notices, source availability, distribution or compatible licensing.
Maintain a software bill of materials or equivalent component list. Record each package, version, source and licence. Do not list third-party dependencies as company-authored code in a registration, investment schedule or sale document.
What records should a startup keep?
| Record | Question answered | Control |
|---|---|---|
| Contributor map | Who created each part? | Names, role and dates |
| Agreements | Who holds which rights? | Signed and version-specific |
| Repository history | When did code enter? | Protected logs and tags |
| Component list | What belongs to others? | Licence and version |
| Handover record | What did the company receive? | Code, keys and documents |
Keep the complete release archive, specifications, tickets, code reviews, assignments and access logs. A commit proves that an account submitted a change; it does not necessarily prove the human author, authority or economic ownership.
How do you audit source code ownership?
- Freeze the release. Record the version and repository state being reviewed.
- Map contributors. Identify founders, staff, agencies and subcontractors.
- Read Section 6. Match each contribution to the statutory ownership route.
- Read the agreements. Check scope, transfer, licences and exclusions.
- Inventory dependencies. Separate original and third-party material.
- Close gaps. Obtain written assignments or clarifications where needed.
- Secure handover. Move repositories, domains, credentials and documentation to company control.
When should the ownership file be updated?
Do not wait for a funding round or acquisition. Review the file when a founder joins or leaves, a development agency changes, a major module is rebuilt, code is moved into a new entity or an important open-source dependency is introduced. Link each signed agreement to the relevant repository, release or delivery record so a later reviewer can follow the chain without guessing.
Before investment, licensing or sale, compare the legal record with the product that is actually deployed. Confirm that named parties still exist, signatures and dates are complete, promised assignments cover the delivered versions, subcontractors are accounted for and company-controlled accounts hold the current code and credentials. Record unresolved issues rather than describing the whole repository as “company owned.” A narrow, evidenced explanation is more useful than an absolute claim that the documents cannot support.
Does copyright registration solve ownership?
No. A voluntary copyright registration may create a dated record, but it cannot repair a missing statutory basis, false claimant, undocumented transfer or third-party licence breach. Sec. 5 confirms that registration is not required to acquire the right.
Use the Copyright Registrar's Office for software copyright questions. IP Sewa does not handle copyright filings. Read the current Act through the Nepal Law Commission and obtain advice on disputed ownership.
How is the software brand protected?
Copyright in code does not reserve the product name or logo. The Department of Industry registers those source-identifying signs under the Patent, Design and Trade Mark Act 1965. Company registration, a domain and app-store publication do not replace a trademark application.
Search published marks through the IP Sewa database, remembering that it is not a complete status tracker. Use the conflict checker and consider a professional search review before launch.
Which trademark classes fit software?
Downloadable software commonly raises Class 9, while SaaS, hosting and software development commonly raise Class 42. Marketplaces, financial services or communications may require additional analysis based on the actual service.
The Nice Classification applies to trademarks, not copyright. Nepal requires a separate application for each class under Sec. 18A. Use WIPO's current Nice resources with the Nice class finder.
What happens after the trademark filing?
The Department examines the application and may raise conflicts, scope or document questions. A qualifying application is published in the Industrial Property Bulletin before registration.
The Department's 8 July 2025 Bulletin allowed 90 days for objections to its listed applications. The 90-day opposition period runs from publication; the deadline the bulletin states prevails, so act before the last day.
What does a practical example look like?
Imagine a Kathmandu SaaS startup whose founder wrote version 1.0, an agency built the mobile client and employees created version 3.0. This is an illustration, not a real case. The company maps each contribution and reviews payment, direction and written transfers.
It obtains a founder assignment, confirms the agency handover, inventories open-source packages and secures company repository access. Separately, it searches and files the product name in the appropriate trademark classes.
Common mistakes
- Assuming the GitHub organisation owns every commit.
- Assuming an invoice transfers ownership without a signed assignment.
- Using an invoice instead of a written transfer where Sec. 24 is needed.
- Ignoring founder code created before incorporation.
- Claiming open-source dependencies as company-authored work.
- Leaving repositories and credentials with a departed agency.
- Treating copyright registration as proof of a clean chain of title.
- Assuming code copyright protects the app name.
For the wider launch review, compare these ownership gaps with the IP mistakes that can damage a startup. Then secure the public-facing identifiers using the guide to trademarks, domains and social handles.
In short
Source code ownership is a contribution-by-contribution analysis under Sec. 6, supported by written agreements under Sec. 24 and a reliable technical record. Map founders, staff, contractors and dependencies before fundraising, sale or dispute.
People also search for
- Can a company own copyright in Nepal?
- How can a tech startup protect its brand and IP?
- How should a startup choose a registrable name?
- Does the startup own its logo?
- What IP mistakes do startups make?
For software-brand classes and filing, use the trademark registration service; for a broader ownership and launch review, contact IP Sewa.
Comments (0)
Leave a comment
Replying to — cancel