Intellectual property for SaaS: who owns what?
Software, data, custom developments, usage data: how to allocate intellectual property rights between the SaaS vendor and its customers.
SaaS vendors and their customers often have a different understanding of intellectual property. A customer may believe it owns what it funds or improves, while the vendor typically assumes it retains all rights over its product, including improvements suggested by customers. These misunderstandings can generate contractual tension. It is therefore essential to anticipate these questions and address them from the outset of the agreement.
The SaaS software always belongs to the vendor, whether in its initial version or as updated. Even if a customer proposes improvements or influences the product roadmap, the vendor retains full ownership of all developments.
In SaaS, product evolution is often driven by customer feedback. These improvements benefit all users. This is a core feature of the SaaS model: every customer benefits from updates without distinction. As a result, a customer cannot claim ownership rights over an improvement, even if it originated from their suggestion. To secure this point, it is advisable to include a clause governing customer feedback in your terms.
Bespoke developments for a specific customer are more complex. If a customer funds a custom feature, it may expect to own the result. However, in SaaS, a custom development is built on the vendor’s software platform and is typically unusable without it. Once the subscription ends, the development often becomes obsolete.
It is therefore critical to assess each situation individually and to specify in the agreement:
The customer retains ownership of its data: both initial data (imported by the customer) and data generated through use of the software.
The SaaS vendor cannot claim or reuse this data without the customer’s consent. But another category of data is often a source of confusion: usage data. Logs, statistics and analytics generated by use of the SaaS typically belong to the vendor. This information enables the vendor to improve its product and optimise performance. It is generally anonymised and aggregated, which significantly reduces the risk for the customer.
During a fundraising round, investors systematically verify that the vendor holds full ownership of the intellectual property in its software. If developments were carried out by external contractors without a compliant IP assignment, or if customer customisations create ambiguity regarding rights ownership, this can become a barrier to investment. It is better to secure these points from the earliest contracts.
To prevent unfounded claims, it is essential to:
A well-drafted SaaS agreement protects both the vendor and the customer by addressing these fundamental questions from the start. For an overview of the key provisions, see the SaaS contracting guide.
Intellectual property is rarely a source of conflict in SaaS — as long as it is clearly addressed in the agreement. The moment it is not, it becomes a risk. If you need to secure your agreements on this point, book a call.
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I have been supporting software and SaaS companies for over 10 years, helping them structure their business, protect their intellectual property and strengthen their contracts.
