A foreign founder can build a French company around code before the company has a large team, a French office or a long commercial history. The first employee may write the application, maintain the source repository, design the technical architecture and create the first patentable solution. That concentration of value creates a practical legal question: does the French company own the software, or does the developer keep rights that can obstruct fundraising, licensing, an acquisition or a dispute with a departing employee?

French law does not answer every part of that question with one broad “work made for hire” rule. Software has a special copyright regime. The economic rights in software created by an employee in the course of employment or on the employer’s instructions are generally transferred by operation of law to the employer. Other creations, such as non-software documentation, graphic assets, inventions and pre-existing code, may follow different rules. A patentable technical invention can also trigger a statutory right to additional remuneration for the employee.

For a foreign-owned French company, the safest approach is to separate the assets, identify the legal employer, record the employee’s instructions and preserve a chain of title. This article explains the allocation of rights, the difference between software copyright and employee inventions, the contract provisions that make ownership provable, and the evidence a founder should preserve before an investor or buyer asks for it.

For the broader incorporation sequence, see the firm’s French company formation guidance, then use this article as the intellectual-property workstream for the first hire.

I. How does French law allocate software and invention rights to a first employee?

A. What does the French company own automatically when an employee writes code?

The first distinction is between the person who creates the work and the person who may exercise its economic rights. Under Article L111-1 of the French Intellectual Property Code, the author normally acquires an exclusive intangible property right from creation. The same provision states that an employment or service contract does not, by itself, remove that right, subject to the exceptions in the Code. A foreign founder should therefore avoid importing the legal vocabulary of an American “work made for hire” agreement and assume that every asset belongs to the company. The French exception must be identified asset by asset.

Software is one of those exceptions. Article L112-2, 13° expressly includes “les logiciels, y compris le matériel de conception préparatoire” among works protected by copyright. The protection covers the program and preparatory design material, not an abstract business idea. Source code, object code, certain technical documentation and the expressive form of the program must be distinguished from a concept, a functional requirement or a mathematical method.

The key rule is Article L113-9 of the French Intellectual Property Code. Its text provides: “Sauf dispositions statutaires ou stipulations contraires, les droits patrimoniaux sur les logiciels et leur documentation créés par un ou plusieurs employés dans l’exercice de leurs fonctions ou d’après les instructions de leur employeur sont dévolus à l’employeur qui est seul habilité à les exercer.” In English, the economic rights in qualifying software and its documentation vest in the employer, which alone may exercise them, unless a more favourable statutory or contractual arrangement applies to the employee.

That automatic vesting has four limits that matter to an overseas founder.

First, the rule concerns economic rights. It does not turn the employee into a fictitious non-author. The developer remains the natural person who created the work. Article L121-1 says: “L’auteur jouit du droit au respect de son nom, de sa qualité et de son oeuvre.” The company should handle attribution, modification and publication consistently with the special software rules and the contract. For software specifically, Article L121-7 limits the author’s ability to oppose a modification that does not harm honour or reputation and removes the right of repentance or withdrawal, unless a more favourable provision applies.

Second, the creator must be an employee of the relevant employer when the software is created. If the code was written before incorporation, by a founder personally, by a foreign parent’s employee or by an independent contractor, Article L113-9 is not a substitute for a transfer or licence. A French subsidiary cannot treat a parent company’s repository as its own merely because the same group paid the developer. The contract with the actual creator and the intercompany document must match the commercial reality.

Third, the code must be created in the course of the employee’s functions or according to the employer’s instructions. A job title alone is weak evidence. A developer’s employment description, technical tickets, architecture decisions, repository permissions, acceptance messages and contemporaneous instructions show what the parties actually assigned. Working from a home office, using a personal computer or committing code outside the formal working day does not by itself decide the issue. Conversely, an employee’s personal project, created outside the assigned functions without the company’s instructions or resources, should not be swept into the company’s ownership merely because the author is employed.

Fourth, the automatic rule does not safely capture every adjacent asset. A user-interface illustration, marketing copy, training video, database structure, customer documentation, domain name, invention, open-source contribution or pre-existing library may require a separate analysis. The contract should describe the deliverables broadly enough to identify the business asset, but it should not pretend that one sentence can override mandatory rules applying to copyright, patents or employee remuneration.

The first judicial reference useful for a foreign founder is Cass. 1re civ., 3 July 1996, no. 94-15.566. The Court stated: “La personne morale qui divulgue et exploite une oeuvre, tel qu’un logiciel, sous son nom, est présumée, à l’égard des tiers contrefacteurs, être titulaire sur cette oeuvre du droit de propriété incorporelle de l’auteur.” This is a presumption in a dispute with a third-party infringer, not a licence to neglect the employment file. It shows why a company that publishes and exploits a product should keep evidence of its role, but it does not eliminate a former employee’s ability to challenge the chain of title between the parties.

The second reference is Cass. 1re civ., 15 June 2016, no. 14-29.741. In a dispute involving a jointly created software program, the Court held that “l’exploitation d’un logiciel par un de ses coauteurs sans le consentement de l’autre porte nécessairement atteinte aux droits de M…” and constitutes infringement. The commercial lesson is direct: if a first employee, founder, contractor and parent-company engineer all contributed material code, the company should document the rights of each contributor before distributing or licensing the product. A repository history can identify contributors, but it is not itself a complete transfer agreement.

The practical test is therefore not “was the programmer on payroll?” It is:

• Was the French company the employer named in the employment contract?
• Was the work within the employee’s functions or created from an instruction given by that company?
• Can the company identify the software, its documentation, its versions and its contributors?
• Can the company separate pre-existing code, third-party components and the employee’s personal projects?
• Can the company prove what it owned before transferring rights to a foreign parent, investor or buyer?

If the answer is yes, Article L113-9 gives the French company a strong statutory basis for exercising the economic rights in the qualifying software. The contract and evidence file still matter because automatic vesting is only useful when the company can prove that the statutory conditions are satisfied.

B. When does software development become an employee invention with a different compensation rule?

Copyright and patent law must not be merged. A program “as such” is excluded from patentability by Article L611-10 of the French Intellectual Property Code, which lists “les programmes d’ordinateurs” among items not considered inventions when claimed as such. The same article preserves patentability where the claim concerns a technical invention meeting the statutory requirements of novelty, inventive step and industrial applicability. A software-enabled control of a machine, a technical signal-processing solution or a technical security mechanism may therefore require a patent analysis; a business method or an abstract algorithm does not become patentable simply because it is implemented in code.

When a technical solution may be patentable, Article L611-7 creates three broad categories for an employee inventor. An invention made under a contract containing a mission inventive corresponding to the employee’s actual functions, or during studies and research expressly assigned to the employee, belongs to the employer. The employee must be informed when a patent application is filed and, where applicable, when the patent is granted, and the conditions for additional remuneration are set by the collective agreement, company agreement or individual contract. Other inventions normally belong to the employee, although an invention made in the course of employment, in the company’s field or with company-specific means or data may be attributable to the employer against a just price.

For a founder, this means that a clause saying “all intellectual property belongs to the company” is not a substitute for a functioning invention procedure. The company should state whether research and development is part of the employee’s mission, establish an invention-reporting channel, date the disclosure, preserve the technical contribution and identify the remuneration rule. The company should also avoid promising that every invention will be treated as ordinary software copyright. The statutory categories and the applicable collective agreement may change the financial outcome.

The case law gives an unusually useful map of the risk.

In Cass. com., 22 February 2005, no. 02-18.790, the Court quoted Article L611-7 and confirmed that “les conditions dans lesquelles le salarié, auteur d’une invention réalisée dans l’exécution de son contrat de travail comportant une mission inventive, bénéficie d’une rémunération supplémentaire, sont déterminées par les conventions collectives, les accords d’entreprise et les contrats individuels de travail”. A contract should therefore identify the applicable source rather than leave the bonus question to a later negotiation after the invention has commercial value.

In Cass. com., 22 February 2005, no. 03-11.027, the Court held that the statutory change requiring additional remuneration could not be neutralised by a less favourable collective-agreement clause. Its reasoning states that the employee “doit dorénavant bénéficier d’une telle rémunération supplémentaire”. A foreign parent cannot solve the problem by inserting a group policy that silently removes an employee’s mandatory French entitlement.

In Cass. soc., 2 June 2010, no. 08-70.138, the Court stated: “Il résulte de l’article L. 611-7 du code de la propriété intellectuelle que le salarié, auteur d’une invention, bénéficie d’une rémunération supplémentaire”. The decision also examined whether the inventions were made before the employment relationship and as part of a contribution to the company. That is a warning for a startup whose first developer joined after an early prototype: the pre-employment history must be recorded, not reconstructed during a financing round.

In Cass. com., 12 February 2013, no. 12-12.898, the Court explained that the employee’s right “ne soumettent le droit à cette rémunération à aucune autre condition que la réalité de l’invention”. The quotation comes from the Court’s reasoning on the statutory right. It is not a rule that every piece of code earns a patent bonus. It is a rule that, once a qualifying invention exists, an employer should not add an extra condition that the statute does not impose.

In Cass. com., 9 December 2014, no. 13-16.559, the Court recalled that “le juge doit tenir compte notamment de l’intérêt industriel et commercial de l’invention” when assessing additional remuneration. For an early-stage company, a technical contribution that later becomes the core of a high-value product should be documented at the time of disclosure, even if its financial value was unknown on the filing date.

In Cass. com., 26 April 2017, no. 15-29.396, the Court stated that “il appartient à la Commission nationale des inventions de salariés ou aux tribunaux de fixer le montant” when the contractual and collective framework does not settle the additional remuneration. A founder should not wait for litigation to discover that the contract did not identify a calculation method or the responsible internal contact.

In Cass. com., 31 January 2018, no. 16-13.262, the Court considered the circumstances of the invention, the employee’s contribution and the advantage the company could obtain. The decision records the distinction that “la rémunération supplémentaire pour une invention de mission ne tend pas à rétribuer le salarié pour son travail”. That distinction prevents a company from arguing that ordinary salary automatically covers a statutory invention payment.

Finally, Cass. soc., 25 September 2019, no. 18-16.722 addressed the interaction between a collective agreement and the employee’s statutory entitlement. The Court’s analysis shows that a clause may be set aside to the extent that it limits the right created by Article L611-7, while the remaining calculation provisions may need a separate analysis. A foreign founder should have French counsel identify the applicable collective agreement before promising equity, a bonus or a fixed salary as the only reward for technical innovation.

The jurisdictional route also matters. Article L615-17 places civil actions relating to patents, including cases under Article L611-7, before the judicial courts designated by law. A dispute about additional remuneration or patent ownership is therefore not handled like an ordinary payroll adjustment. Preserve the invention report, the technical records, the patent correspondence and the remuneration calculation as one file.

The dividing line is clear. The company’s ordinary source code can fall under Article L113-9. A technical invention connected with that code may additionally fall under Article L611-7. The first rule concerns the employer’s economic rights in qualifying software; the second allocates patent rights and protects the employee’s right to additional remuneration or a just price. The contract should address both without claiming that one regime replaces the other.

II. How should a foreign founder document and protect the French company’s ownership?

A. What should the employment contract, repository and IP schedule contain?

The employment contract should begin by naming the legal employer precisely. Use the French company’s registered name, registration number and registered office, not only the foreign group brand. A Kbis is the official extract showing a company’s registration details; it is commonly obtained through the commercial court registry, known as the greffe, and is often requested by a bank, investor or contracting party. The Kbis is evidence of corporate identity, not evidence that the company owns every line of code. It should nonetheless match the employer name in the contract, repository policy and invoices.

The contract or an annex should then describe the employee’s role in functional terms. “Software engineer” is useful but not enough. Add the expected products, modules, documentation, tests, architecture work, security work, deployment tools and research tasks. State who may issue technical instructions and how those instructions are recorded. An issue tracker, design document, pull request or written message can link the work to the employee’s functions, but the company should retain the relevant record and not rely on a private messaging account that may disappear when the employee leaves.

The IP schedule should have separate sections for:

• background assets supplied by the employee, founder, foreign parent or contractor before employment;
• foreground software and documentation created in the French employee’s functions;
• third-party and open-source components, with their licences and obligations;
• technical inventions and the internal declaration process;
• non-software works such as interface designs, documentation, illustrations, videos and training material;
• confidential information, credentials, deployment keys, customer data and security material; and
• personal projects that the parties expressly exclude, subject to the employee’s duty of loyalty and confidentiality.

For software, the agreement should confirm that the parties intend the employee’s work to be performed in the company’s functions or according to the company’s instructions. This is evidence of the Article L113-9 conditions; it should not be drafted as though the clause alone creates an automatic transfer for work that falls outside those conditions.

For non-software copyright assets, a transfer clause must satisfy Article L131-3. The provision says: “La transmission des droits de l’auteur est subordonnée à la condition que chacun des droits cédés fasse l’objet d’une mention distincte dans l’acte de cession et que le domaine d’exploitation des droits cédés soit délimité quant à son étendue et à sa destination, quant au lieu et quant à la durée.” The schedule should therefore identify reproduction, representation, adaptation, translation, distribution, commercialisation, sublicensing and use in software or documentation where those rights are relevant. It should define the field of use, territory and duration rather than use an undefined promise to transfer “all rights everywhere forever”.

The contract should also preserve the employee’s moral rights consistently with French law. Article L121-1 makes the right attached to the author’s person perpetual, inalienable and imprescriptible. For software, the special rule in Article L121-7 is more practical for modification and withdrawal, but it does not justify careless attribution or degrading use. Record whether the developer is named in documentation, whether the company may publish under its business name and how material changes will be approved.

The exploitation rights should be explicit. Article L122-6 identifies reproduction, translation, adaptation, modification and placing copies on the market among the rights attached to software. The founder should ensure that the company can host the code, create backups, modify it, let a cloud provider operate it, license it to customers, grant a foreign parent a licence and transfer the product in an acquisition. If the French company will not own the rights needed by the parent, execute a separate intercompany licence or assignment after confirming the French company’s title.

The source repository is part of the legal control system. It should be created in the name of the company or under an account over which the company has administrative control. Use individual accounts, multi-factor authentication, protected branches, review requirements and a documented offboarding procedure. Preserve the commit history and a periodic export in a controlled archive. The aim is not to convert Git metadata into a contract; the aim is to connect the technical record with the signed employment and IP documents.

The company should also use a clear invention workflow. The employee should know whom to notify, what technical details to include, how to mark a report confidential and how the company will acknowledge receipt. The company should record whether the work is a mission invention, an invention outside the mission but attributable, or another invention. If a patent is considered, preserve the filing date, the inventor identity, the employee notification and the remuneration analysis. Do not promise that a patent will be filed before checking novelty and confidentiality.

Confidentiality is a separate layer of protection. Article L151-1 of the French Commercial Code protects a trade secret when information is not generally known or readily accessible, has actual or potential commercial value because it is secret, and is subject to reasonable protective measures. Source code, deployment architecture, security keys and non-public product logic may qualify, but secrecy is not automatic. Access controls, confidentiality clauses, restricted repositories, classification labels and exit interviews help prove the required measures.

An infringement of trade secrets can trigger civil liability under Article L152-1 of the French Commercial Code. That remedy does not replace copyright or patent rights. It is valuable when the company needs to protect confidential know-how that is not fully captured by a copyright claim or when the company must show that it acted responsibly before asking a court for relief.

The company should address open-source software with the same discipline. A developer may use a permissive component, a reciprocal licence or code subject to an employer or university policy. Keep a software bill of materials, the licence text, the notices and the approval for any component that could impose source-disclosure or distribution conditions. “The employee wrote it” does not mean the company can ignore third-party rights. A buyer will usually ask for this record because an undisclosed component can affect the ability to commercialise or close a transaction.

B. How should the founder preserve proof for contractors, foreign parents, investors and an exit?

The highest-risk moment is often before the first employment contract. A founder may build a prototype personally, ask a foreign parent’s engineer to contribute, hire a French freelancer for a module and then employ a developer to turn the prototype into a product. Four different legal relationships can create four different chains of title.

Start with a dated background schedule. List the prototype, source repositories, domains, design files, datasets, documentation, patents, trademarks and open-source components that existed before the French employee joined. For each item, state whether the French company receives ownership, an exclusive licence, a non-exclusive licence or no right. If the foreign parent owns the background code, grant the French company the rights it needs to develop, operate, sublicense and sell the product. If the French company will own the new product, define how derivative modules relate to the background code.

For an independent contractor, do not assume the employment rule applies. The contractor is not the employee contemplated by Article L113-9. The company should use a written agreement identifying the deliverables and complying with Article L131-3 for copyright transfers. It should also obtain rights from every subcontractor, confirm the status of pre-existing components and require disclosure of open-source material. Payment of an invoice demonstrates a commercial relationship; it does not, by itself, prove a complete copyright transfer.

The Court’s software decisions reinforce the need for a clean history. In Cass. 1re civ., 15 June 2016, no. 14-29.741, the dispute turned on joint authorship and the use of source code without the other author’s consent. The founder should therefore obtain a contribution statement from each person who wrote material code and keep the corresponding agreement. In Cass. crim., 21 November 2012, no. 11-85.867, the criminal case did not create a general rule on employee software ownership, but the record included a dispute over software developed by employees and assets attributed to a company. It is a useful warning against allowing a director or founder to register, sell or pledge a company-developed product personally without checking the company’s rights.

For a patentable invention, the evidence must be even more precise. Cass. com., 22 February 2005, no. 02-18.790 and Cass. com., 22 February 2005, no. 03-11.027 show why the collective agreement and the individual contract cannot be treated as decorative documents. Cass. soc., 2 June 2010, no. 08-70.138 illustrates the importance of the invention’s date and the employee’s actual contribution. Cass. com., 12 February 2013, no. 12-12.898 and Cass. com., 9 December 2014, no. 13-16.559 make the existence, value and commercial use of the invention relevant to the remuneration discussion. These references concern employee inventions, not an automatic patent right in software; their value for the founder is procedural and evidential.

Keep the following evidence pack in a company-controlled location:

1. the signed employment contract and every IP annex or amendment;
2. the Kbis and corporate records identifying the French employer;
3. the job description, technical objectives and written instructions;
4. repository exports, commit history, pull requests and release records;
5. the background-asset schedule and all founder or foreign-parent licences;
6. contractor agreements, subcontractor assignments and invoices;
7. open-source approvals, licence notices and dependency inventories;
8. invention reports, patent correspondence, employee notifications and remuneration calculations;
9. confidentiality acknowledgements, access logs and offboarding confirmations; and
10. board or shareholder approvals for a licence, contribution, sale or transfer of the technology.

The administrative acronyms should not obscure the ownership issue. INPI means the National Institute of Industrial Property, the French office involved in patents, trademarks and the business formalities system. URSSAF is the body that collects much of the French social-security contributions; its payroll records show the employment relationship but do not prove copyright ownership. BODACC is the Official Bulletin of Civil and Commercial Announcements, where certain corporate and insolvency notices are published; a BODACC notice can help date a public event but does not transfer source-code rights. The greffe is the registry office attached to the competent commercial or judicial court. None of these records replaces the signed IP chain.

Before an investment or sale, prepare a rights matrix rather than a general confirmation. For each software component, identify the current owner, creator, contract, applicable transfer or licence, repository, third-party dependency, pending dispute and required consent. If a French subsidiary owns the product and a foreign parent commercialises it, describe the licence and its scope. If the parent owns the platform and the French company only develops a local module, separate the platform from the module. If the first employee’s work includes a technical invention, show how Article L611-7 was analysed.

The matrix should also identify what the company does not own. A negative entry can be valuable: a founder’s pre-existing library remains licensed, a university component is excluded, a contractor retained a specified background tool, or a personal project was never used in the company’s product. Investors and buyers often accept a bounded exception more readily than an unexplained assertion that the company owns everything.

If a dispute begins, secure the evidence before disabling accounts or rewriting repositories. Preserve a read-only copy of the relevant branches, issue history, instructions, employment records and access logs. Do not delete the employee’s personal files indiscriminately: French employment privacy and evidence rules may limit how an employer searches workplace systems. Ask counsel to define the preservation scope, especially where the code contains personal data, customer data or third-party confidential information.

When the company needs an urgent patent remedy or a dispute over an employee invention, Article L615-17 identifies the judicial-court route for patent-related civil actions. When the issue is ordinary software exploitation, copyright infringement, contractual transfer or trade-secret misuse, the procedural route and requested remedy may differ. A foreign founder should not send a threat letter using the wrong legal qualification, particularly where the departing employee may claim a statutory invention payment.

The final protection is operational. On the employee’s last day, revoke repository and cloud access, recover devices and keys, confirm the return or deletion of confidential copies, obtain a handover of source code and dependencies, and remind the employee of surviving confidentiality duties. Do not ask the employee to waive rights that French law makes unavailable to waive. Instead, identify the rights the company owns, the rights it has licensed and any remuneration or attribution that remains due.

Conclusion

For a French company’s first employee, the central rule is practical but not unlimited. Under Article L113-9, economic rights in software and its documentation created in the employee’s functions or on the employer’s instructions vest in the employer. That rule is stronger than a generic assumption that employment equals ownership, but narrower than a promise that the company automatically owns every creative or technical asset touched by the employee.

The founder should separate software copyright, other copyright works, confidential know-how, pre-existing assets, contractor contributions and patentable inventions. For a technical invention, Article L611-7 may give the employer the patent right while preserving a right to additional remuneration; other inventions may belong to the employee or be attributable for a just price. The safest chain is created before the first release: name the French employer, define the employee’s functions, list background assets, control the repository, document instructions, operate the invention procedure and preserve evidence.

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