Who owns the intellectual property in works that a freelancer creates?
The short answer is that, unless the contract says otherwise, the freelancer will usually own the intellectual property in works that they create. If intellectual property (IP) is important to you as a client, you need to know what to look out for when assessing your relationship with the freelancer.
Get the contract right
A freelancer will, as a starting point, own any IP they create. This is the case even where you specifically pay a freelancer to create something for you.
Crucially, it is possible to contract out of this. If the freelancer’s consultancy agreement clearly states that ownership of IP in work created by them will be owned by the client, this will be tough to argue against.
You should therefore make sure that the freelancer’s consultancy agreement contains appropriate provisions about transferring IP ownership rights to you.
Nonetheless, it is worth remembering that IP rights may also be important to the freelancer, and they may wish to negotiate the extent to which they hand over ownership. This is not unusual and is down to individual discretion.
What to do if the contract is unclear about who owns intellectual property
If the contract doesn’t mention or is unclear as to who owns IP, the freelancer is in a strong position. If you use someone else’s IP without permission they could sue you, or force you to stop using it.
Where you cannot produce an agreement expressly stating you own the IP, you might consider whether the freelancer is actually better categorised as an employee. Employers will, by default, own work they have instructed an employee to create. Bear in mind however, that if your freelancer is found to be your employee, there will be other consequences. For example, you will have more obligations towards them as their employer (as opposed to their client), there will be tax consequences, and they will have additional employment rights.
However, even if you are not the owner of the IP that has been created, all is not lost. You can still seek to licence or buy IP rights from the freelancer.
Licensing and purchasing
An owner of IP rights generally has the ability to monetise the work and protect it from misuse by others. They may choose to licence it to someone else to use, or even permanently sell their ownership.
To licence IP, you will typically enter into negotiations about usage rights and duration. The terms of the agreement should be recorded in writing for peace of mind, although it is not strictly necessary do so.
To purchase IP you will also typically enter into negotiations, which will be concluded by signing a contract of sale and, depending on the IP in question, filing additional forms to change ownership, such as Patent Form 21.
So, there we go. If you’re dealing with a freelancer you should ensure that their contract terms contain the desired clauses on IP ownership that fit your requirements. You should be prepared to negotiate these terms with the freelancer and, as a last resort, can always seek to licence or purchase the IP at a later date.
For example clauses you can include in the consultancy agreement see Individual consultancy agreement (pro client) if the freelancer is working in their personal capacity and Company consultancy agreement (pro client) if they are operating through a limited company.
Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.