Who owns an idea? In employment and commercial contracts, the answer is rarely intuitive. Employees who do not read their IP clauses may find that side projects they considered personal belong to their employer. Businesses that fail to secure proper IP assignment from contractors may find they do not own the product they paid to have built.
Paste any UK contract clause and get a structured risk report — plain English, red flags, enforceability insight, and a suggested counter-proposal.
The default position in UK law
For employees, the Patents Act 1977 and the Copyright, Designs and Patents Act 1988 establish that intellectual property created in the course of employment belongs to the employer — even without a contractual assignment clause. For contractors and freelancers, the position is reversed. Absent a contractual assignment, the contractor retains ownership of the intellectual property they create, even if the client commissioned and paid for it. This surprises many clients — and many contractors who do not realise the leverage it gives them.
Pre-existing intellectual property
A well-drafted IP assignment clause should carve out pre-existing intellectual property. If you bring tools, frameworks, code libraries, or design templates to an engagement that you created before it began, those should remain yours. The assignment should cover what you create for this client, not what you already owned before you arrived. If your contract lacks this carve-out, document what you are bringing before you start and share that list with the client — it creates a contemporaneous record that matters in a dispute.
What employment IP clauses typically cover
Employment contracts usually assign IP more broadly than the statutory default — capturing work created outside working hours or using personal equipment, where it relates to the employer's business. Courts will generally not enforce a clause that captures intellectual property genuinely unconnected with employment, but the burden of proving that rests with the employee.
What contractors should negotiate
Where possible, consider whether a full IP assignment is appropriate. A licence — granting the client the right to use the intellectual property for specific purposes — may serve their needs without stripping you of ownership entirely. At minimum, insist on a pre-existing IP carve-out, ensure the assignment is conditional on payment in full, and retain the right to use the work in your portfolio with the client's consent.