Does my contractor own the rights to the work product?

Probably, unless you have a correctly drafted agreement that, amongst other things, classifies the project as “work-for-hire” and where the contractor is assigning all rights to you, or your company.

Without such an agreement, you may not own the work your contractor was hired to do. This can turn into a mess if, for example, the work you’ve hired your contractor to create is being done for your client. In such a case you may not be providing your client with full (if any) ownership to the work. In fact, the ownership will probably rest with the contractor who, at best, is providing an implied license to you and the client to use the work product. Another scenario where this can be a problem is if your contractor was writing code and you’re undergoing the draining process of investor due diligence. Well, this could be trouble with the contractor owning a key piece of code that your company is relying on. Knowing you’re about to raise that juicy 7-figure round can bring out the worst in people and they may ask for more than you originally bargained for.

All of this can be avoided if there is an agreement from day one. The key clauses to pay attention to in such an agreement include:

  1. Assignment of all intellectual property rights that the contractor is creating;
  2. Assignment of all intellectual property rights that the contractor’s sub-contractor is creating (often they hire additional help on projects and you want to be sure that all rights are assigned to you);
  3. Classification of the work product as work-for-hire
  4. Clearly defined scope of services
  5. Confidentiality clauses

Drop us a line if you have any questions about getting such an agreement in place.

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