Who owns commissioned work? IP clauses for freelancers and agencies

Who owns commissioned work in the UK? For copyright, the starting point is often the creator — not the client who paid for the work — unless an employment relationship or written agreement changes the result. A broad intellectual-property clause can therefore decide whether a freelancer or agency keeps reusable tools, transfers the bespoke deliverable, or gives the client a licence to use it.

This article is general information, not legal advice. “Intellectual property” includes different rights with different ownership rules; this article focuses mainly on UK copyright and contract drafting.

The UK copyright starting point

The UK Intellectual Property Office explains that the author or creator is usually the first owner of copyright. Work made by an employee in the course of employment is generally owned first by the employer, subject to any agreement to the contrary. A freelancer or independent contractor will usually retain copyright unless the contract changes that position.

For commissioned copyright work, paying the invoice does not by itself transfer ownership. The parties may have an express licence, and in some cases a limited licence may be implied from the circumstances, but an implied right to use the deliverable is not the same as owning the copyright.

A copyright assignment must be in writing and signed by or on behalf of the person transferring the right. Moral rights are separate from copyright: they cannot simply be assigned with the economic rights, although the creator may waive them in a signed written instrument.

Official guidance: Ownership of copyright works and licensing or transferring copyright.

Copyright is not the whole IP picture

A clause referring to “all Intellectual Property Rights” may cover more than copyright, including:

patents and rights in inventions;
registered and unregistered design rights;
database rights;
trade marks, names, and logos;
confidential information and trade secrets;
domain names; and
rights to apply for or register protection.

Ideas, methods, skills, and know-how are not all owned or transferred in the same way as copyright. However, a contract can still restrict their disclosure or reuse through confidentiality, exclusivity, non-use, or assignment wording. The definitions section matters.

Background IP and project IP

A useful contract distinguishes between:

Background IP: material, tools, code, templates, processes, libraries, designs, know-how, and other rights created or acquired outside the project; and
Project IP or foreground IP: rights created specifically in performing the contracted work.

Without that distinction, wording such as “all materials created in connection with the services” may capture more than the final deliverable. It could reach generic components, improvements to existing tools, unused concepts, working files, or material developed for several clients.

The labels alone do not solve the problem. The contract should say what falls into each category, who owns it, and what licence the other party receives.

Assignment and licence are different

An assignment transfers ownership. A licence leaves ownership with the rights holder but permits specified use.

A licence can be:

exclusive, sole, or non-exclusive;
worldwide or territory-limited;
perpetual or time-limited;
transferable or non-transferable;
royalty-free or paid; and
limited by purpose, product, customer, or field of use.

A client may not need ownership of every component to obtain the commercial result it needs. A sufficiently broad licence to embedded background IP can allow the client to use, maintain, modify, and distribute the deliverable while the supplier keeps its reusable platform or tools.

Conversely, a narrow licence may leave the client dependent on the supplier for routine use, future development, or transfer to a replacement provider.

Problematic IP-clause patterns

Look closely for:

A blanket assignment. “All IP arising in connection with the agreement” may extend beyond defined deliverables.
No background-IP exclusion. Pre-existing or independently developed tools may be swept into the transfer.
No embedded-IP licence. The client owns the output but lacks clear rights to use supplier materials inside it.
A present assignment of future rights. The clause may transfer rights automatically as they are created, rather than after payment or acceptance.
US “work made for hire” wording. This is a US copyright concept, not a reliable substitute for a properly drafted UK assignment. UK-facing wording often includes a separate assignment for that reason.
Overbroad moral-rights waivers. These may affect attribution, objections to derogatory treatment, and portfolio use.
Third-party components ignored. Stock assets, fonts, open-source software, subcontractor work, and licensed data may not be capable of being assigned on the promised terms.
No chain of title. An agency may promise ownership without obtaining suitable rights from employees, freelancers, or subcontractors who contributed.
Portfolio and publicity restrictions. Confidentiality or publicity clauses may prevent even non-confidential use in case studies.

A practical IP-clause checklist

Before signing, ask:

What are the deliverables? Tie ownership or licence rights to a defined output and scope of work.
What do you already own? Identify background IP specifically or by a workable category.
What is being assigned? Check the rights, territory, duration, and whether future rights are included.
When does ownership transfer? On creation, delivery, acceptance, or full payment?
What licence covers embedded background IP? Make sure it permits the client’s intended operation, maintenance, modification, and distribution.
Can generic material be reused? Protect non-confidential templates, know-how, methods, and components where appropriate.
Are third-party materials permitted? Allocate responsibility for approvals, licence compliance, and associated costs.
Is the chain of title complete? Confirm that contributors have granted the rights the contracting party promises.
What happens to moral rights and portfolio use? Deal with attribution, waivers, confidentiality, and publicity expressly.
Does the price match the rights? A full buyout may justify different pricing from a limited-purpose licence.

A common commercial structure

For many service engagements, a workable structure is:

the client owns the clearly defined bespoke deliverables or receives a licence broad enough for its needs;
the supplier keeps its background IP, general know-how, and reusable tools;
the client receives a continuing licence to any supplier background IP embedded in the deliverables;
third-party materials remain subject to their own licences; and
ownership transfer, if any, occurs only once the agreed fees are paid.

That structure is not suitable for every project. A brand identity, commissioned software platform, research output, invention, or regulated deliverable may require a different allocation. The important point is to describe the intended result precisely rather than rely on “all IP” boilerplate.