Intellectual Property Clauses in Contracts: Who Owns What?
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Intellectual property clauses are among the most consequential terms in any contract. They determine who owns the work created during the engagement.
Work Made for Hire vs. Assignment
Under US copyright law, a "work made for hire" is automatically owned by the hiring party. However, this doctrine is narrow. For independent contractors, the contractor owns the copyright by default. To transfer ownership, the contract must include an explicit IP assignment clause.
Pre-Existing IP
Ensure the contract carves out your pre-existing intellectual property — tools, frameworks, code libraries you developed before the contract. Without this, a broad IP assignment could transfer your pre-existing work. List pre-existing IP in an exhibit.
License-Back Provisions
If assigning IP to a client, negotiate a license-back allowing you to reuse generic components in future projects. Without this, you may not be able to use your own techniques and patterns.
Invention Assignment
Employment contracts often require assigning all inventions made during employment. Many states limit these clauses to inventions related to the employer's business. Know your state's protections.