Intellectual Property Clauses: Who Owns What You Create

What Is an Intellectual Property Clause?

An intellectual property (IP) clause defines who owns the creative work, inventions, software, designs, or other intellectual property created during a contractual relationship. These clauses are critical in employment agreements, consulting contracts, and partnership agreements.

Key Concepts

• Work for hire: Under U.S. copyright law, work created by an employee within the scope of employment automatically belongs to the employer. For independent contractors, work-for-hire applies only to specific categories defined by statute.
• IP assignment: A transfer of ownership from the creator to the other party. This goes beyond work-for-hire and can cover inventions, patents, and trade secrets.
• IP license: Instead of transferring ownership, the creator grants the other party permission to use the IP under specific terms. The creator retains ownership.

What to Review

• Scope of assignment: Does the clause cover only work created for the specific engagement, or does it sweep in all work created during the contract period — including personal projects?
• Pre-existing IP: Is your existing intellectual property carved out? If you bring tools, code, or methodologies to the engagement, the contract should explicitly exclude these.
• Moral rights: In some jurisdictions, creators have moral rights (like attribution) that survive an assignment. Check whether you are waiving these.
• Invention assignment: Employment agreements sometimes require you to assign inventions even if created on your own time. Several states, including California, Delaware, Illinois, and Washington, limit these provisions.

Red Flags

• Blanket assignment of all IP created during the contract period, regardless of relevance to the work
• No carve-out for pre-existing IP or personal projects
• The clause extends to work created after the contract ends
• No license-back provision (if you assign IP, you may want a license to use it in your portfolio or future work)
• Work-for-hire language in a contractor agreement for work categories not eligible under copyright law

When to Consult a Lawyer

Consider consulting an IP attorney before signing any agreement with broad IP assignment provisions, especially if you are an independent contractor, bring pre-existing work to the engagement, or create inventions outside your employment duties.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.