If you're a developer, designer, writer, or any kind of creator, the intellectual property clause in your contract decides who owns what you build. Get it wrong and your client can legally claim ownership of your reusable code library, your custom Figma components, even your years-old portfolio templates.
The Three Most Common IP Structures
- Work-for-hire / full assignment. The client owns everything you create under the contract, the moment you create it. Standard for big agencies and enterprise clients.
- License on payment. You own the work; they get a license to use it once they pay. Friendly for freelancers and recommended for smaller projects.
- Hybrid: Client owns the final deliverables; you keep ownership of pre-existing tools and general components.
The hybrid model is almost always the right answer — but you have to ask for it.
The "Pre-Existing IP" Land Mine
If the contract assigns "all materials used in connection with the project" to the client, your internal libraries, design system, and reusable scripts technically become theirs the moment you use them. Always carve out pre-existing IP.
Red Flags in IP Clauses
What a Fair IP Clause Looks Like
- Assignment only of the final deliverables, not every file you touched.
- Assignment triggers on full payment. Until then, the client has at most a temporary license to review.
- Pre-existing IP carve-out for anything you brought to the project (libraries, frameworks, design systems, templates).
- License-back so you can reuse generic components, techniques, and a portfolio version of the work.
- Scope limited to copyright unless the project specifically involves patentable inventions.
- Right to display the project in your portfolio and case studies.
Language to Paste Into Your Next Contract
Suggested carve-out for pre-existing IP (always have a lawyer review for your jurisdiction):
"Contractor retains all right, title, and interest in any pre-existing materials, tools, libraries, frameworks, or templates used in the performance of the Services. Contractor grants Client a non-exclusive, perpetual, royalty-free license to use such pre-existing materials solely as incorporated into the Deliverables. Assignment of the Deliverables occurs upon full payment of all undisputed invoices."
How Contract Review Reviews IP Clauses
Contract Review flags broad "all materials" assignments, pre-payment transfers, and missing carve-outs — then drafts replacement language you can paste back to your client.