Contractor IP Assignment: Why You Need One

You pay a freelancer to build your website, write code or design your logo. Does your company own what they create?

Not automatically. For copyright work, the creator is usually the first owner. Paying the invoice doesn’t transfer those rights to your business. A contractor IP assignment puts the ownership arrangement in writing.

What is an IP assignment?

An assignment transfers intellectual property rights from their owner to another person or business.

It can sit within your contractor agreement or be a separate document. It should identify the work, the rights being transferred and when the transfer takes effect.

A licence is different: it gives permission to use rights that someone else continues to own. A licence may be sufficient for some work, but it needs to allow everything your business intends to do.

Why does it matter?

Without clear terms, you may have permission to use commissioned work for its original purpose without owning it outright. That can create problems when you want to adapt the work, license it, transfer it to a client or sell the business.

For example, a freelance developer builds your product. You receive the source files, but the agreement says nothing about copyright ownership. Having the files doesn’t itself mean your company owns the rights.

Investors and buyers may ask for evidence that the company owns, or has adequate rights to use, its core assets.

What work should you consider?

Common examples include:

• Software, source code and integrations.

• Logos and brand artwork.

• Website copy, photography and video.

• Product designs and technical documentation.

• Inventions and database rights, where applicable.

Different rights have different rules. A clause dealing only with copyright may not cover everything the contractor creates.

What should the agreement cover?

Focus on:

• Deliverables and ownership: what transfers to your company, including relevant future work, and whether transfer depends on payment.

• Existing materials: identify the contractor’s tools, templates or code that remain theirs, with a licence broad enough for your intended use.

• Third-party content: disclose stock assets, open-source software and other licensed materials, including restrictions.

• Other contributors: ensure the contractor obtains the necessary rights from anyone helping them.

• Moral rights: consider an appropriate signed waiver. These personal rights cannot be assigned like copyright.

• Handover: specify source files, documentation, access credentials and any further paperwork needed.

For copyright, an assignment must be in writing and signed by or on behalf of the rights owner. Don’t rely on an invoice or informal assurance.

If you contract with a freelancer’s limited company, check that company has secured the rights it promises to transfer.

What about AI-assisted work?

Agree whether contractors can use AI tools and what they must disclose.

Ask about tool terms, confidential information and third-party materials. An assignment can only transfer rights that exist and that the contractor owns; it doesn’t guarantee every AI-generated output is protected or free from infringement claims.

Already commissioned work without an assignment?

Review the original contract first. It may already contain suitable terms.

If it doesn’t, a solicitor can help arrange an assignment covering completed work. Use the actual signing date and identify the work clearly.

Agree ownership before the next project starts, then keep signed agreements and handover records together in your FOUNDRS Documents area.

For shared ownership of the business itself, our shareholders’ agreement guide covers decisions and founder departures. Contractor IP ownership needs its own appropriate terms.