Who owns what your employees create in Uzbekistan

A Tashkent SaaS startup was closing a round. The fund's counsel sent over standard due diligence, and the very first item was blunt: "Show us the paperwork proving the company owns the code." The founders shrugged — the code was written by salaried in-house developers, so surely it was theirs. Two weeks later the deal stalled. The employment contracts never transferred the economic rights in the code to the company, and the logo had been drawn by a freelancer under a contract that said nothing about rights at all. On paper, part of the company's intellectual property did not belong to the company. Worse still, they had been planning to file a trademark on that logo — and there was effectively no one with clean title to file it.

This is not a rare case. It is the most common break in the chain of title we see during pre-deal reviews. And it all traces back to one counterintuitive fact: in Uzbekistan, who owns what an employee creates depends entirely on which kind of result they created.

The surprise: the rule for patents is the opposite of the rule for copyright

Most founders carry one universal model in their heads: "a person on payroll made something, so it belongs to the employer." In Uzbekistan that model is exactly half right.

• Industrial property (inventions, utility models, industrial designs) — the right belongs to the employer by default. This is an employee invention.
• Copyright (source code, interface design, text, graphics, photography) — the right stays with the author, meaning the employee. The employer gets only a limited right of use. This is a work created in the course of employment.

The distinction is fundamental, and it lands hardest on exactly the companies that create the most value — software and creative businesses. Their core asset is code and design, which is copyright, where the default winner is not the company but the employee. Let's take each regime in turn.

Employee inventions: here the employer wins — but not automatically

Under the Law of the Republic of Uzbekistan "On Inventions, Utility Models and Industrial Designs," the right to obtain a patent for an industrial-property object created by an employee belongs to the employer. But not for any invention an employee dreams up — only where one of three conditions is met:

1. the invention was created in connection with the employee's job duties;
2. it was created while carrying out a specific assignment given by the employer;
3. its creation relied on technical knowledge and resources specific to the enterprise.

If a developer designs a device at home, on their own equipment, outside their work tasks, it is not an employee invention, and the patent belongs to them, not the company. The line runs precisely along these three tests — and in a dispute it is the employer who must prove the connection to the work.

Even where the right sits with the employer, the transfer is documented by a contract between the author and the employer, and the inventor keeps a right to remuneration separate from salary. So a careful employer never relies on "it's ours by law anyway." It fixes three things in writing: that rights to work results pass to the company, how the author notifies the employer of what was created, and how remuneration is calculated.

A patent for an invention in Uzbekistan lasts 20 years from the filing date; an industrial design lasts 10 years; a utility model is shorter. That is a long-lived asset, and baking a defect into it at the start is expensive. We walk through the mechanics of filing in our patent practice.

Works made on the job: here the author wins by default

Now the most important — and most counterintuitive — part. Under the Law of the Republic of Uzbekistan "On Copyright and Related Rights," copyright in a work created in the course of carrying out a work assignment belongs to the author. Not the employer. The author.

What the employer gets is not ownership of the work, but only the right to use it in the manner dictated by the purpose of the assignment, and within the limits flowing from that purpose — and even that only if the contract does not provide otherwise. The author may still use the work in any manner unrelated to the assignment, and that right of theirs is not restricted.

And there is one more time bomb: ten years after the work is delivered (or earlier, with the employer's consent), the author fully recovers the right to use the work and to receive remuneration, unless the contract says otherwise.

Put that together for a typical software company. A salaried developer writes code. By default:

• copyright in the code belongs to the developer, not the company;
• the company may use the code only within the assignment it was written for;
• after ten years even that limited right can return to the author.

"An employee made it, so it's ours," applied to code and design in Uzbekistan, is simply wrong. For the company to actually own the economic rights in the code in full and without a deadline, it needs a direct contract transferring exclusive economic rights to it. Without such a contract you do not hold an asset — you hold a licence with an expiry date.

Keep separately in mind that the author's moral rights (the right of authorship and the right to be named) are inalienable and stay with the creator forever. You can buy the economic rights; authorship you cannot. That is normal and does not affect the value of the business — what affects value is the fate of the economic rights. For more on how software is protected as an asset, see our piece on protecting software.

Exclusive or non-exclusive: the default trap

Say you caught this in time and decided to transfer the rights by contract. Another trap waits here. Under a copyright contract, rights can be transferred as exclusive or as non-exclusive — and by default they are deemed non-exclusive unless the contract expressly states the opposite.

Non-exclusive rights mean the author can transfer the same rights to anyone else and keeps using them too. For a company that thinks it "bought the code," that is a disaster: the same contractor legally sells your product to a competitor. So the contract must say it in black and white — exclusive economic rights are transferred, in full, with no limit of term or territory. One missing word, "exclusive," turns the purchase of an asset into a non-exclusive licence.

Freelancers and contractors: the most common hole

Everything above concerned salaried employees. With freelancers and contractors the position is harsher still, because the work-made-on-the-job regime does not apply to them at all — there is no employment relationship, so there is no "service" result.

With a contractor, only what the contract expressly says applies. No clause transferring rights, and the client has nothing beyond the practical ability to use the file. And if there is a clause but it does not say "exclusive," by default you have received a non-exclusive licence. That is exactly why a logo drawn by a freelancer for 2,000,000 UZS so often turns out not to be legally yours — and it surfaces at the worst moment, when you go to file a trademark and have to prove your rights in the sign.

The same trap catches founders. An MVP a co-founder wrote before the company was incorporated belongs to them personally by default, not to the future company. On due diligence an investor's first request is the "founders' IP assignment" — the contract by which founders transfer to the company everything they created for the project. Without it, clean title has to be reconstructed after the fact, sometimes by buying it back from someone who has already left.

What to put in the contracts so you can sleep at night

The problem is solved on paper and in advance. The minimum set:

• In the employment contract (or a separate addendum): transfer to the company of the exclusive economic rights in all work results — both industrial property and copyright works; the procedure for notifying the company of what was created; a clause on the author's remuneration. The word "exclusive" is mandatory.
• In the contractor / freelancer contract: assignment of the exclusive economic rights in full, with no term or territory limit; for creative work, a proper commissioned-work contract with an assignment of rights, not just a plain "services agreement."
• At company formation: a founders' IP assignment from each founder covering everything created for the project, before and after incorporation.
• Before filing a trademark: confirm the rights in the logo have already passed to the company, or the application is being filed on an asset that is not yours.

The cost of this wording is zero. The cost of its absence is a collapsed round, a blocked sale of the company, or a competitor with a legal copy of your product.

Why it surfaces precisely at the deal

While a company simply operates, the defect in title is invisible — no one walks in and asks who owns the code. It becomes visible at exactly the moment the business acquires a price: a funding round, a share sale, bank financing secured against IP, entry into an export market. A buyer and an investor always check the chain of title — an unbroken line from the author to the company. One break in that line, and the asset the valuation rests on hangs in the air.

The good news: all of this is cured by prevention. The right three paragraphs in the employment contract and the contractor contract close 90% of future problems. The bad news: curing it after the fact is always more expensive and not always possible, especially once the author has left and is in no hurry to sign.

In short

• An employee's inventions, designs and utility models belong to the employer by default (where work-connected).
• Copyright in code, design and text stays with the employee-author by default.
• Without a contract, the employer gets only a limited right to use the work.
• After 10 years even that right can return to the author, unless the contract says otherwise.
• Rights under a copyright contract are non-exclusive by default — the word "exclusive" is mandatory.
• The work-made-on-the-job regime does not apply to freelancers — only the text of the contract works.
• The defect surfaces at due diligence: the investor checks the chain of title from author to company.

Frequently asked questions

My in-house developer wrote the code. Who owns it? By default, copyright in the code belongs to the developer, and the company gets only the right to use it within the assignment. For the code to belong to the company in full, the employment contract or an addendum must contain an express transfer of the exclusive economic rights. Without that clause you do not own your key asset.

Does an employee's invention also stay with them? No, here the rule is reversed. The right to a patent for an employee invention belongs to the employer by default — but only where the invention is connected to job duties, a specific assignment, or relies on enterprise-specific know-how. The transfer should still be documented by contract, and the author has a right to remuneration.

Why are the rules different for code and for inventions? Because these are two different laws and two different objects. Inventions are governed by the Law "On Inventions, Utility Models and Industrial Designs," where the employer has priority. Works are governed by the Law "On Copyright and Related Rights," where by default the author has priority. One employee can create both — and the regimes will differ.

What do "exclusive" and "non-exclusive" rights mean? Exclusive rights mean only you can use the work and dispose of it. Non-exclusive means the author may grant the same rights to others and keeps using them too. Under a copyright contract, rights are deemed non-exclusive by default, so a transfer of exclusive rights must be spelled out expressly.

We commissioned a logo from a freelancer. Can we file a trademark on it? Only if the contract with the freelancer assigns the exclusive economic rights in the image. The work-made-on-the-job regime does not apply to a contractor. Without a transfer of rights you risk filing an application on a sign that legally belongs to its author, and facing a claim later.

A co-founder wrote the MVP before the company was incorporated. Is that a problem? Potentially yes. Before a legal entity exists, what is created belongs personally to the author. You need a founders' IP assignment — a contract by which the founder transfers to the company the rights in everything created for the project. Investors check this first.

Can it all be fixed after the fact? Often yes, but it is more expensive and not always possible. If the author is still on the team and loyal, you sign a transfer agreement now. If the author has already left the project, you have to negotiate, sometimes buy the rights back. Prevention at the start is always cheaper.

The most expensive illusion in this area is the belief that paying an employee's salary, or settling a freelancer's invoice, automatically moves the rights to you. In Uzbekistan that is not so for copyright works — and copyright works are exactly what most valuable assets are today. The rights in code, design and content pass to the company not when you pay, but when you sign the right contract — and it is better to do that before someone else's lawyer asks what your business actually owns.