When you ‘re a freelancer, content creator, or small business owner, you’re often working with independent contractors: whether that’s a designer creating your logo, a developer building your website, or a writer producing content for your brand. But when they create something for you, do you actually own it? The answer isn’t as straightforward as you might think.
Let’s break down what intellectual property (IP) is, why it matters, and how to make sure your contracts are airtight.
What Is Intellectual Property (IP)?
Intellectual property refers to creations of the mind that are legally protected. But here’s the catch: you don’t get IP rights just by having an idea. You have to take that idea and turn it into a tangible creation. That means:
- A logo, website, or marketing materials = IP
- A business idea you’re brainstorming with a friend = not IP
- A book or blog post you wrote = IP
- A vague concept for a novel = not IP
There are three primary types of IP protection:
1. Copyright
Protects original works of authorship, including writing, photography, video, music, and software. If someone writes an article for you, they own the copyright unless you have a contract that says otherwise.
2. Trademarks
Protects brand identifiers, like your business name, logo, or slogan. Even if you pay a designer to create your logo, they still technically own the design unless your contract transfers the rights to you.
3. Patents
Protect inventions, typically in technology, engineering or other inventions.
Who Owns the IP When You Hire a Contractor?
Under default copyright law, without other contractual provisions in place, the person who creates the work owns it: even if you paid for it. That means if you hire a freelancer to design your website, they legally own the design, and you’re simply using it unless you have an agreement that says otherwise.
Ownership vs. Licensing: What’s the Difference?
Ownership: You own the work outright and can do whatever you want with it: modify it, sell it, adapt it. This is what most businesses prefer when hiring contractors.
License: The creator still owns the work, but they grant you the right to use it under certain conditions (e.g., only for social media, only for a set period).
For example:
- If you hire a writer for a blog post, they might give you a license to publish it, but they still own the content and could repurpose it elsewhere.
- If you hire a branding agency, they might give you full ownership of the final logo design, but not the 20 logo concepts they created along the way.
How to Make Sure You Own the Work You Pay For
1. Get It in Writing
Your contract should explicitly state who owns the IP. Ideally, it should include:
- A work-for-hire clause stating that all IP rights transfer to you upon creation.
- A full assignment of rights, ensuring you own everything outright.
- No hidden license restrictions that limit how you can use the work.
2. Watch Out for Payment-Dependent Transfers
Some contracts state that you don’t own the work until final payment is made. If you’re hiring a contractor, you might want to remove this to avoid disputes. If you’re the contractor, keeping this clause protects you in case a client doesn’t pay.
3. Understand Licensing Terms
If full ownership isn’t an option, make sure the license gives you the rights you need. Check for:
- Term limits (e.g., you can only use it for one year)
- Usage restrictions (e.g., only for social media, not for print)
- Geographic limits (e.g., only in the U.S.)
What Happens If You Don’t Have the Right Agreement?
If you use a contractor’s work without proper ownership or licensing, you could face legal consequences: even if you paid for it. A photographer could demand payment if you use their image outside the agreed scope. A designer could send a cease and desist letter if you modify their work without permission. A consultant could sue for damages if you profit from their work without proper rights.
IP disputes are one of the most common legal issues small businesses face. The best way to protect yourself? Make sure your contracts are airtight from the start.
Need a Solid Contract? Counsel Club Has You Covered.
At Counsel Club, we provide contract templates designed specifically for freelancers, agencies, and small businesses. Whether you’re hiring a consultant or protecting your own creative work, we’ve got the legal language you need to stay covered.
Looking for an MSA (Master Services Agreement) that protects your business?
Sign up to get access to customizable contract templates built for creatives and entrepreneurs.
Own your work. Protect your business. Join Counsel Club.
