In Software-as-a-Service (SaaS), artificial intelligence, and deep-tech enterprises, proprietary Source Codes, Algorithms, Database Architectures, and Intellectual Property (IP) constitute over 90% of total enterprise value.
However, during venture capital (VC) financing rounds, Series A valuations, and cross-border M&A acquisitions, the most frequent fatal flaw identified during Legal IP Due Diligence is the failure to properly and irrevocably transfer source code ownership to the corporate entity under Turkish copyright law.
This guide provides a comprehensive legal roadmap on software ownership under Article 18 of the Law on Intellectual and Artistic Works (Law No. 5846 - FSEK), contractor assignment agreements, statutory transfer requirements under FSEK Article 52, open-source viral copyleft traps, and IP Due Diligence checklists.
1. Legal Classification of Software & Ownership under FSEK Art. 18
Under Turkish copyright law (FSEK Art. 2/1-1), computer software and computer programs are categorized as ‘Scientific and Literary Works’ and enjoy statutory copyright protection upon creation without the need for formal registration.
Ownership rules vary drastically depending on the working relationship:
Scenario A: Payroll Employees (FSEK Art. 18)
Pursuant to Article 18/2 of FSEK: “Unless otherwise understood from the special contract between them or the nature of the work, the authority to exercise rights over works created by civil servants, employees, and workers in the course of performing their duties belongs to those who employ or appoint them.”
- Economic rights to code developed by payroll employees in the regular scope of employment belong to the employer by operation of law.
- Nevertheless, best practice mandates executing a dedicated IP & Inventions Assignment Protocol alongside the employment contract.
Scenario B: Freelancers, External Agencies & Independent Contractors
When a startup commissions software from external freelancers, software houses, or foreign dev agencies, FSEK Art. 18 DOES NOT APPLY.
- Paying invoices or service fees does NOT transfer source code copyright to the startup!
- Without a formal written Copyright Assignment Agreement (Telif Devir Sözleşmesi) compliant with FSEK Art. 52, the developer remains the sole legal copyright holder and can file copyright infringement lawsuits or injunctions against the company.
Where the code was written by an employee rather than a contractor, a separate statutory procedure governs inventions arising from the work, set out in employee inventions and the four-month claim window. Where a single project mixes employees, contractors and a technopark tenancy, the allocation has to be settled across all four outputs at once — patents, software copyright, designs and know-how — which is the exercise described on our employee inventions and R&D intellectual property page.
2. Mandatory Formal Requirements under FSEK Art. 52
Article 52 of Law No. 5846 (FSEK) makes it a requirement that contracts and dispositions concerning economic rights be in writing and that the rights forming their subject be specified individually. The first two criteria below restate that requirement, and an agreement that fails either of them does not meet it; the third is a contractual safeguard concerning the exercise of moral rights, not a condition of Article 52:
- Strict Written Form: Must be executed in physical or qualified electronic writing. Email exchanges or Slack messages are legally insufficient.
- Individual Enumeration of Economic Rights: Broad, generic clauses like “All intellectual property rights are owned by the company” do not meet the Article 52 requirement that each right be specified individually. The agreement must explicitly list each economic right by its statutory name:
- Right of Adaptation / Modification (FSEK Art. 21)
- Right of Reproduction (FSEK Art. 22)
- Right of Distribution (FSEK Art. 23)
- Right of Representation / Performance (FSEK Art. 24)
- Right of Digital Transmission & Public Broadcasting (FSEK Art. 25)
- Waiver of Moral Rights Exercise: The agreement must explicitly grant the company unconditional authority to publish, update, and modify the software without listing individual author names (FSEK Art. 14).
3. Open-Source Licensing Traps: Permissive vs Viral Copyleft
| License Category | Examples | M&A and Commercialization Risk Level |
|---|---|---|
| Permissive | MIT, Apache 2.0, BSD | LOW RISK: Allows proprietary commercialization without disclosing source code. |
| Weak Copyleft | LGPL, MPL | MEDIUM RISK: Only modifications to the library itself must be shared. |
| Strong / Viral Copyleft | GPL v2/v3, AGPL | CRITICAL RISK: Forces the startup to make its entire proprietary codebase publicly available! |
4. IP Due Diligence Pre-Investment Checklist
Before entering funding negotiations or M&A audits:
- Ensure all founding engineers have signed retroactive Founder IP Assignment Agreements covering code written prior to corporate incorporation.
- Maintain signed FSEK 52 assignment agreements for every contractor, external developer, and UI designer.
- Conduct automated software bill of materials (SBOM) scans using tools like Black Duck or FOSSA to purge viral GPL/AGPL dependencies.
Assignment paperwork settles ownership, but on its own it does not protect the know-how that never becomes a registered right — customer lists, pricing models, architecture decisions. That layer rests on the unfair competition provisions of the Commercial Code, as set out in trade secret protection in Türkiye. Where the code or the interface turns up on someone else’s site, the removal routes are statutory rather than contractual, and the two available ones are compared in online copyright takedown in Türkiye.
Diligence on the same file usually turns up restrictive covenants signed by the development team; the penalty clauses attached to them are examined in penalty clauses in non-compete covenants.
