# Intellectual property Source: https://contracko.com/glossary/intellectual-property # Intellectual property Legally protected creations of the mind such as patents, trademarks, and copyright. ## Definition Intellectual property (IP) covers intangible creations protected by law, including copyright, patents, trademarks, designs, and trade secrets, giving the owner exclusive rights to use and exploit them. Contracts must state who owns IP created during the relationship and what rights, if any, are licensed or transferred. Without express terms, default ownership rules (for instance, that a contractor generally retains copyright unless assigned) can produce unexpected results. ## Example > A design agency's contract assigns all IP in deliverables to the client on full payment, while the agency keeps its pre-existing tools. ## Why this is a business risk IP ownership disputes are among the most damaging contract failures because the affected asset is often a core product or brand. Companies that do not obtain an express written IP assignment from contractors or employees risk discovering that a key piece of software, design, or content belongs to someone else. Similarly, granting an overly broad IP license can give a counterparty rights that far exceed what the deal intended. ## How to manage it - Include an express written assignment of all IP created under the contract: "agrees to assign" is not enough; use "hereby assigns". - Define pre-existing IP (background IP) and confirm that the contractor keeps it but grants a license to use it in the deliverables. - Tie the IP assignment to full payment: ownership transfers only when the client has paid, which incentivises timely payment. - Check that any third-party components (open source, stock images) used in the deliverables are licensed in a way compatible with how the client wants to use them. ### How Contracko helps Contracko extracts IP ownership and license provisions from contracts and flags assignments that are conditional (e.g. on payment) or that may leave gaps (e.g. contractor retains moral rights). The central repository makes it easy to see which agreements contain IP transfers so your legal team can audit coverage across the portfolio. ## Legal references - Auteurswet (Aw) Dutch Copyright Act Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer. ## Relevant for [Software & SaaS](https://contracko.com/industries/software-saas)[Music](https://contracko.com/industries/music-industry)[Film & TV](https://contracko.com/industries/film-tv)[Marketing & Creative Agencies](https://contracko.com/industries/agencies) ## Related clauses - [Intellectual Property Clause](https://contracko.com/clause-library/intellectual-property) - [License Grant Clause](https://contracko.com/clause-library/license-grant) - [Assignment Clause](https://contracko.com/clause-library/assignment) ## Related terms - [License](https://contracko.com/glossary/license) - [Assignment](https://contracko.com/glossary/assignment) - [Confidential information](https://contracko.com/glossary/confidential-information) - [Non-disclosure agreement (NDA)](https://contracko.com/glossary/nda) ### Never miss a contract deadline again - AI finds renewal and notice dates - Risks and obligations are surfaced automatically - Reminders help you act before dates slip Drop a contract to start PDF, DOCX, PNG, or JPG [Start 7-day trial](https://app.contracko.com/register?appLanguage=en&utm_source=glossary_sidebar&utm_medium=lead_magnet&utm_campaign=glossary_sidebar_contract_upload&content_slug=intellectual-property&content_title=Intellectual+property&cta_placement=glossary_sidebar_cta&source_tool=glossary_sidebar_intellectual-property) GDPR compliant. Encrypted. Never used for AI training. ## Frequently asked questions Common questions about this term. - **Q:** Who owns IP created by a contractor? **A:** By default in Dutch law the contractor often keeps copyright unless it is assigned in writing. Clients should require an express assignment of all deliverable IP. - **Q:** Can an employee's work-related IP belong to the employer? **A:** Under Dutch copyright law, if an employee creates a work in the performance of their duties, the employer is deemed the maker (article 7 Aw) and owns the copyright. For patents and software inventions the rules differ, so explicit employment contract clauses are important. - **Q:** What are "moral rights" and do they affect IP transfers? **A:** Moral rights (persoonlijkheidsrechten) protect the author's connection to their work, such as the right to be named and to object to distortion. Under Dutch law they cannot be fully transferred, only waived in certain respects, which can limit how a client uses transferred work. - **Q:** What is the difference between an IP assignment and an IP license? **A:** An assignment permanently transfers ownership; after assignment the original owner has no IP rights unless a license back is granted. A license is permission to use without transferring ownership, so the licensor retains the underlying right. - **Q:** Does open-source software in a product affect its IP ownership? **A:** Yes. Some open-source licenses (copyleft, e.g. GPL) require that derivative works also be open-sourced, which can prevent a client from owning the product as proprietary software. Checking open-source licence obligations before incorporating components is essential. ## See these terms in your own contracts Upload a contract and Contracko pulls out the key terms, dates and obligations, then reminds you before each one matters. 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