Contract Glossary
Intellectual Property (IP)
Definition
Intellectual property is the stuff you create with your brain that the law protects, inventions (patents), brand names (trademarks), creative works (copyright), and business secrets (trade secrets). In contracts, IP clauses determine who owns the work product.
In Practice
You pay a freelance developer $30,000 to build your mobile app. Without an IP assignment clause in the contract, the developer might own the code, even though you paid for it. Under U.S. copyright law, the creator owns the work unless it's a 'work for hire' (limited to specific categories) or there's a written IP assignment. You'd be paying $30,000 for a license to use your own app, not ownership of it.
Example Clause
All Intellectual Property created, developed, or conceived by the Service Provider in the course of performing Services under this Agreement shall be the sole and exclusive property of the Client. The Service Provider hereby assigns to the Client all right, title, and interest in and to such Intellectual Property, including all patents, copyrights, trademarks, and trade secrets.
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