The Default Rule: Creators Own Their Work
Under copyright law in the United States, the person who creates something owns it — unless they've contractually assigned those rights to someone else, or unless it qualifies as "work for hire."
This means: if you hire a freelancer to build your website or write your marketing copy and your contract doesn't address IP, the freelancer may own the copyright to work you paid for.
Work for Hire
"Work for hire" is a specific legal doctrine that transfers copyright from the creator to the hiring party. Under US copyright law, a work is work for hire when:
1. It's created by an employee within the scope of their employment (the employer owns it automatically), OR 2. It's created by an independent contractor if: (a) it falls into one of nine specific categories, AND (b) the parties sign a written agreement designating it as work for hire
The nine categories where contractors can create work for hire: collective works, parts of a movie or audiovisual work, translations, supplementary works, compilations, instructional texts, tests, answer materials for tests, and atlases. Note: custom software and websites are NOT on this list.
Why Software and Creative Work Need Explicit Assignment
Because custom software, websites, graphic design, and most creative work don't qualify for contractor work for hire, you need an explicit IP assignment clause in your freelance contract.
A standard IP assignment clause states:
"Upon receipt of full payment, Contractor assigns all right, title, and interest, including copyright, in and to the Work Product to Client."
What Freelancers Should Retain
Freelancers should negotiate to retain:
- **Portfolio rights**: The right to display the work in their portfolio and marketing materials
- **Prior work**: Any pre-existing tools, frameworks, or components they bring to the project (background IP)
- **Residual knowledge**: The right to use their general skills and knowledge gained on the project in future work
License vs. Assignment
An assignment permanently transfers ownership. A license allows use without transferring ownership. For most client projects, clients want assignment. But for some cases — stock assets, reusable templates, platform features — a license may be appropriate and easier to negotiate.
Protecting Pre-Existing IP
If you're a contractor who uses proprietary tools, libraries, or code in client projects, your contract should explicitly exclude pre-existing IP from the assignment and grant only a license for its use in the delivered work.
Generate a Contract With Clear IP Terms
TermsDock's Freelance Contract Generator includes standard IP assignment language that transfers ownership to the client upon full payment, along with provisions for portfolio rights and pre-existing IP.