One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: If you built the software on your own time, without company resources, and never signed a contract assigning intellectual property, you likely own the copyright. A verbal 24-hour demand has no legal force. But if the work was part of your internship duties or made using company infrastructure, the company may have a claim under Section 17 of the Copyright Act, 1957.
When the founder of Nexora Technologies called Rohan Gupta at 9:40 on the night of 14 March 2025 in Indore, the demand was blunt: hand over the entire software code within 24 hours, free of cost, or face legal action. Rohan had built the inventory-billing tool from scratch during his internship, often working late from his hostel room. No formal contract was ever signed. The company halved his stipend midway without notice, and had been registered only in late January 2025, roughly two months after he started in November 2024. Earlier, a local practitioner had told Rohan that an intern has no rights and he should hand over the code. Unsure and frightened, he approached the Chamber of Advocate Sudhir Rao. The office reviewed the timeline, his internship offer email, and the total absence of any assignment agreement. Advocate Sudhir Rao's experience in software copyright disputes helped shape the response. The argument was precise: there was no contract, no use of Nexora resources, and no employment relationship at the time of creation. Within weeks, the threats stopped. The company did not file anything. Rohan kept the code.Key Facts of the Case
- Rohan joined the internship in early November 2024 without signing any formal contract.
- He built the software from scratch, mainly outside office hours and without company-provided tools.
- The company, Nexora Technologies, was registered only around late January 2025, about two months after he started.
- His stipend was halved without prior written or verbal notice.
- The founder demanded free handover of the code within 24 hours and threatened legal action.
- No assignment agreement, non-disclosure agreement, or IP clause existed in any document Rohan signed.
- The office of Advocate Sudhir Rao argued that, on these facts, Rohan remained the first owner of the copyright.
The Direct Legal Answer
Does the founder have any legal rights to what Rohan created?
On the facts as stated, likely not. Under Section 17 of the Copyright Act, 1957, the author of a work is generally the first owner of the copyright. The key exception is work made "in the course of employment," where the employer becomes the first owner. But an internship without a signed contract, where the software was not a stated deliverable, is a weak foundation for claiming employment ownership. The company being registered two months later further weakens any claim that Rohan was its employee when the code was written.
Can Rohan still sell the software to other companies?
If Rohan owns the copyright, yes. He can license or sell it to anyone. He does not need the founder's permission. That said, a prudent step is to document when and how the software was created, so that any later dispute turns on evidence, not memory.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Do not respond to threats in writing without legal advice. A wrong admission in an email can create a contract or an estoppel. Gather your code repository, commit timestamps, and all communication immediately. And here's the thing, this area of law involves procedural and evidentiary nuance around authorship, assignment and the Copyright Act that a general practitioner may not routinely handle. An advocate who regularly works on software and IP disputes can assess the real strength of your position before any court sees it.
Applicable Sections of Law
This is primarily a civil copyright matter. The provisions most often in play are:
- Section 17 of the Copyright Act, 1957 — first owner of copyright.
- Section 2(d) and Section 2(o) of the Copyright Act, 1957 — definition of author and computer programme as a literary work.
- Section 13 of the Copyright Act, 1957 — works in which copyright subsists.
- Sections 10 and 11 of the Indian Contract Act, 1872 — what constitutes a valid agreement and who is competent to contract.
Jurisdiction — Where to File the Case
If the founder sues, the case would likely be filed in the civil court where the defendant resides or works, or where the cause of action arose, under Section 20 of the Code of Civil Procedure, 1908. In Rohan's situation, that means a district court in Indore would have territorial jurisdiction. Pecuniary jurisdiction depends on the value of the software or the relief claimed. If Rohan wanted an injunction to stop misuse, the same civil court would entertain it. Jurisdiction matters because filing in the wrong court leads to quick dismissal or transfer, costing time and money.
Limitation Period
A suit for copyright infringement is generally governed by a three-year limitation period under the Limitation Act, 1963. For a breach of contract claim, the period is also typically three years from the date of breach. The clock starts when the right is first infringed or when the contract is breached. Missing the limitation period can be fatal unless a court condones the delay on strong grounds. Rohan's position is precautionary right now, but keeping dated evidence protects him if a dispute emerges later.
Interim Reliefs Available
In a civil case like this, the court can grant interim reliefs to preserve the status quo. A temporary injunction under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908 can stop the other side from selling or using the software while the suit is pending. An attachment before judgment under Order 38 CPC may apply if there is a fear that the opposite party will dispose of assets. These interim orders matter because a copyright dispute can drag on, and without them, the software may be copied or sold in the meantime. In Rohan's case, the credible threat of an injunction alone was enough to stop the founder's demands.
If You Are the Victim
- Do not hand over code, passwords, or documentation on a verbal demand.
- Save every email, message, and call recording that shows the threat and the halved stipend.
- Get legal advice before signing anything or replying to a legal-looking notice.
- Document the creation timeline with commit logs, file dates, and any witnesses.
- If a suit is threatened, ask a lawyer to send a considered response rather than arguing yourself.
Documents You Must Keep Ready
- Internship offer letter, joining email, or any written communication.
- Code repository with commit history and timestamps.
- Stipend receipts or bank statements showing the amounts paid.
- Screenshots of messages about the halved stipend.
- The founder's exact threat messages and the 24-hour deadline.
- Any identity proof such as Aadhaar or PAN for any legal filing.
- Notes on what software, hardware, or accounts the company gave you, if anything.
What Evidence Is Required?
- Primary evidence of authorship: source code files with creation and modification timestamps.
- Communication records: WhatsApp texts, emails, and call logs with the founder.
- Bank statements proving stipend payments and their later reduction.
- Registration details of the company to establish its incorporation date.
- Secondary evidence, such as screenshots or printouts, only if the original device or file is no longer accessible.
- Witness accounts from anyone who saw you build the software independently.
How Courts Typically Approach Such Cases
Indian courts look first at the written relationship between the parties. Where there is no contract, they ask whether the work was created in the course of employment and whether the creator used the employer's resources. Internships are treated differently from regular employment when there is no appointment letter, salary, or PF contribution. Courts also look at the practical reality: who controlled the work, who paid for it, and what the parties understood at the time. Here, a court would likely weigh the missing contract and the post-dated company registration heavily in the intern's favour. But each case turns on small facts, which is why early legal review helps.
Timeline of Legal Process
If the matter went to court as a civil copyright dispute, the stages would be:
- Legal notice from one side, replied to by the other, usually within two to four weeks.
- Plaint filed, followed by summons to the defendant, around six to eight weeks.
- Written statement filed by the defendant within thirty days, extendable by the court.
- Interim injunction arguments under Order 39 CPC, often heard within a few months.
- Framing of issues, then evidence and cross-examination over several hearings.
- Final arguments, judgment, and a possible appeal. A contested copyright suit can take two to five years in practice.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
Yes, and in most intern-versus-founder disputes, settlement is often faster and cheaper than litigation. Mediation or conciliation can resolve the fear that the code will be sold without compensation. If a suit is already pending, the court can refer the matter to mediation under Section 89 of the Code of Civil Procedure, 1908. A compromise deed that confirms ownership, payment, or a licensing arrangement can be recorded before the court. For a student, a negotiated exit is frequently the sanest outcome. But settlement should never begin from a position of fear. Knowing you legally own the software changes the conversation completely.
Common Mistakes People Make
- Handing over the code quickly to avoid "legal trouble," without understanding their rights.
- Replying to threats in anger, which can create admissions against interest.
- Deleting messages or files, destroying the very evidence that proves authorship.
- Signing a backdated contract or NDA under pressure after the software is finished.
- Engaging an advocate who does not regularly handle software or intellectual property matters. Procedural and evidentiary strategy here turns on the Copyright Act, not just general contract law.
- Going to social media with the dispute, which can invite a defamation countersuit and weaken leverage.
FAQs People Normally Have
Does an intern have the same rights as an employee?
Not automatically. An intern without a contract and without regular salary is harder to classify as an employee under Section 17 of the Copyright Act.
Can a founder claim the software simply because the idea came from their company?
No. Copyright protects expression, not ideas. The founder would need to show the code was written as part of your assigned internship work.
Is a verbal agreement enough for the company to claim ownership?
It is possible in theory, but hard to prove. Courts give less weight to vague verbal claims when there is no written assignment.
Should I register the copyright before selling the software?
Registration under the Copyright Act is not mandatory to own copyright, but it is useful evidence in any dispute.
What should I send to an advocate for a first consultation?
Send a two-line note about the timeline, copies of any emails or threats, and the code repository summary.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India