When a group restructuring moves the team, not the rights: what to do first
When a corporate group moves a development team from one group entity to another, the code, designs, and data that team already created stay with the original employer unless a written assignment says otherwise. Employment following an internal transfer does not carry intellectual property with it. Freeze new shipping on that work, confirm who currently holds the rights, and put a signed assignment in place before the receiving entity builds on top of it.
Basis: what the directives protect, and what they leave to national law
Computer programs are protected as literary works under Directive 2009/24/EC, wait — this act is cited by its title only, without an external link on this layer. Computer programs are protected as literary works under Directive 2009/24/EC. Databases receive a separate layer of protection under Directive 96/9/EC, which covers both the creative selection of contents and, where it applies, the investment in compiling them.
Both directives identify the author or rightholder as the person entitled to reproduce, adapt, and distribute the protected work. Neither directive shifts that status automatically when staff move between entities inside the same group. Who counts as the rightholder inside an employment relationship is a question for national law, and the transfer of a contract of employment does not, by itself, transfer what the employee created for a different group entity.
What changes once the team moves
The practical risk starts the day the team begins taking instructions from the new entity, not the day anyone notices the gap. From that point, the receiving entity is building on code, designs, or data it does not clearly own. Every commit, every shipped feature, and every new database entry made under the new entity's direction sits on top of an unresolved ownership question. The longer the gap stays open, the larger the body of work that later needs to be traced, assigned, or licensed retroactively.
| Factor | Why it changes the size of the problem |
|---|---|
| Employment versus contractor status | Contractor work is rarely covered by default employer rules and almost always needs a written assignment. |
| Existing group-wide assignment clause | If the original contract already assigns rights to "the group" rather than to one entity, the gap may already be closed. |
| Timing of the code against the restructuring date | Work created before the move belongs to the old entity; work created after depends on who instructed it. |
| Whether the new entity has already shipped the product | Shipped code is harder to unwind than code still sitting in an internal repository. |
What to do, in order
- Legal or the group general counsel freezes external release of anything built by the moved team since the restructuring, pending the audit below.
- The engineering or product lead inventories the repositories, design files, and databases the team touched, tagging each item with the entity that originally employed the author.
- Legal checks the employment or service contracts for an existing assignment clause covering group-wide use; where one exists, the gap may already be closed and only needs recording.
- Where no clause exists, legal drafts an intra-group assignment or licence and has both entities sign it before further development continues.
- The group updates its access and contribution records so future work is attributed to the entity that is meant to hold the rights going forward.
- Where the product is client-facing, the account team notifies affected counterparties once the chain of title is formalised, without disclosing internal restructuring detail.
Who decides, and on what evidence
Inside the group, the legal or IP function decides based on the employment or service contracts, any existing assignment clause, and the commit or design history showing who created the work and when. Where the group cannot resolve the allocation internally, a court in the jurisdiction of the disputed rightholder decides, working from the same documents: the contract, the assignment clause if one exists, and the record of authorship.
If your situation differs
If the original employment contract already assigns future work to the group rather than to one entity, the move changes nothing: record the assignment against the new entity and continue. If the team includes contractors rather than employees, the default authorship rules in Directive 2009/24/EC do not fill the gap; a written assignment from each contractor is mandatory regardless of the internal move. If the moved team also manages third-party integrations, a parallel exposure appears when An integration partner leaks credentials technology contract becomes the live problem instead of ownership. If the product downstream involves issuing a tradable token, the same first-response discipline applies once When a partner distributes the token in detail is the scenario actually unfolding.
What this page does not settle
This page does not confirm what a specific group entity already holds on public or corporate registers, and it does not put a value on the assets moved. Where the group needs that confirmation before financing or a sale, Asset in United Arab Emirates: what can be established shows what can be established for one entity in one jurisdiction. Where the restructuring coincides with financial stress inside the group, Debtor report when insolvency signals appear explained covers the separate question of tracking the same group once insolvency signals appear.
Verified
Checked against the current text of Directive 2009/24/EC and Directive 96/9/EC. Neither directive fixes the ownership rule inside an employment relationship; that step depends on the contract and on national law, and is confirmed case by case rather than assumed from the directive text.
Related situations
A neighbouring question, handled on its own page, is What to do first in this situation explained, where the dispute is about the files rather than the team.
FAQ
What is the first step when a group restructuring moves the team, not the rights?
Freeze further development or shipping by the receiving entity, inventory what the team has produced since the move, and confirm who currently holds the rights before anyone signs off on new releases.
Which deadline is already running?
The exposure window for unauthorised use by the receiving entity starts the day the team began taking instructions from it, not the day the gap is noticed. Every day the assignment stays unsigned widens that window.
Who decides, and on what evidence?
The group's legal or IP function decides first, based on the employment contracts, any existing assignment clause, and the commit or design history. A court decides only if the group cannot resolve the allocation internally, working from the same evidence.