IP Assignment Agreements for Startups Explained

An IP assignment agreement is a signed contract that transfers ownership of intellectual property, such as code, inventions and designs, from a person to the company. Founders, employees and contractors usually sign one so the company, not the individual, owns what they create. Without it, ownership may stay with the person who made it.

Startup lifecycle A to Z · Letter A · Stage: Build

By the Revolutionary Startups editors · Reviewed 11 November 2026 · 9 min read · 1,965 words

What an IP assignment agreement is and why it matters

Intellectual property (IP) usually begins life owned by a person: the programmer who wrote the code, the designer who drew the logo, the engineer who came up with the invention. Paying someone, or working together on something, does not automatically move ownership to the company. An IP assignment agreement is the signed document that does.

It matters most at three moments: when the company is formed, when someone new starts contributing, and when you raise money or sell. Investors and acquirers commonly review IP ownership in due diligence, the check they run before putting money in. Missing assignments are among the problems found at that stage, and they are far easier to fix early. See protect IP before fundraising.

Names you will see

The documents go by several names, and the content overlaps:

IP assignment agreement or technology assignment agreement: a standalone transfer, often used for founders.
Invention assignment agreement: focused on inventions and patent rights, often for employees.
Confidential information and invention assignment agreement (CIIAA), also called a proprietary information and inventions agreement (PIIA): a common employee form that combines confidentiality duties with invention assignment.
Contractor or consulting agreement with IP clauses: the equivalent for non-employees.

Ask your attorney which form fits each person. The label matters less than the content.

Founder IP assignment

If you wrote code, built a prototype, designed a brand or developed an idea before the company was formed, you personally own it until you transfer it. Forming an LLC or corporation does not by itself move that ownership into the company. See LLC vs C-corp for startups for the formation decision.

How founder assignments usually work

At or shortly after formation, each founder signs an agreement assigning to the company the IP related to the business. Often this happens in exchange for founder stock, and the paperwork is commonly delivered alongside the stock purchase documents. The tax treatment of exchanging property for stock can be technical, so confirm with an accountant or attorney.

What a founder assignment typically covers

Code, designs, documents, domain names, data and prototypes related to the business.
Inventions and any patent rights, including pending applications.
Trademarks and the goodwill associated with them.
Any related rights to sue for past infringement, if relevant.

Prior inventions and carve-outs

The agreement normally lists any prior work the founder is deliberately keeping, often called prior inventions, and states what happens if the founder later uses it in the business. If a founder is still employed elsewhere or is a student, their employer's or school's policies may give that institution a claim to what they create. Check this before you incorporate, not after. See also startup equity split between co-founders, since IP contributions and equity are linked, and how to find a co-founder for early conversations.

Employee invention assignment agreements

Employee-created work is often owned by the employer as a "work made for hire" under copyright law, if made within the scope of employment. But patent rights work differently: an inventor generally owns the invention unless it has been assigned, even when an employee. And whether something was within the scope of a job can be disputed. For that reason, companies typically ask every employee to sign an invention assignment agreement, usually together with confidentiality terms, on or before the start date.

Common provisions

Present assignment language. Wording such as "hereby assigns" is generally treated as an immediate transfer of future inventions as they are created, while "agrees to assign" can be read as only a promise to transfer later. Your attorney will choose the right wording.
Scope. Inventions and works that relate to the company's business, or are made using company time, equipment or confidential information.
Disclosure. A duty to tell the company about inventions promptly.
Excluded prior inventions. A schedule of things the employee owns already.
Confidentiality. A duty not to disclose or misuse company confidential information, including during and after employment.
Further assurances. The employee agrees to sign any additional documents needed to perfect the company's rights, such as patent filings.
Required notices. For example, the federal whistleblower immunity notice for trade secret law, and any state-mandated notices.

State law limits

Several states, California among them, have statutes limiting how far an employer can claim ownership over inventions an employee develops on their own time without employer resources and unrelated to the business. A properly drafted agreement tracks those limits. Rules on non-compete clauses also vary by state, and a lawyer should advise on them separately. Use a form drafted or reviewed for the state where the employee works.

Contractor IP ownership: who owns code written by a freelancer?

This is the trap that catches the most founders. In US copyright law, a freelancer who writes code is generally the author and initial owner of the copyright, even if you paid for the work, unless a signed agreement says otherwise. You may have a right to use it, perhaps an implied license, but implied licenses can be limited in scope, may not be exclusive and may be uncertain.

Why "work made for hire" alone is not a reliable fix

The law allows a commissioned work by a non-employee to be a work made for hire only if it falls within specific listed categories and the parties sign a written agreement saying so. Whether a given software deliverable fits is often debatable. Many attorneys therefore recommend belt and suspenders: include work-made-for-hire wording where it might apply, and also an assignment of all rights that backs it up. A transfer of copyright ownership generally has to be in writing and signed by the person transferring.

What a contractor agreement should address

A clear statement that the company owns the deliverables, with a present assignment of copyrights, inventions and other rights.
What counts as a deliverable, including work in progress.
Pre-existing materials and tools the contractor brings. The company may need only a license to those, and the agreement should say so.
Open source and third-party code: the contractor must disclose and follow license terms.
Confidentiality duties.
Payment timing. Some agreements make the assignment effective on payment; others on creation. This is a negotiation point to discuss with counsel.
Whether the contractor may reuse general know-how on other projects.

Fixing a missing assignment later

If you already used a freelancer without a signed assignment, ask for one now. Reach out politely, offer a short agreement, and be prepared to pay something for it. This is easier before a dispute or a funding round. If the person cannot be found or refuses, talk to an attorney about options, which may include rewriting the code. For the copyright background, see copyright for software startups.

What to include and how it differs by person

Person	Typical document	Key points
Founder	IP assignment, often with stock purchase	Pre-formation work, prior inventions, outside employer or school claims
Employee	Confidential information and invention assignment agreement	Present assignment, scope, state limits, notices, signed before work starts
Contractor or freelancer	Services agreement with IP and confidentiality clauses	Written assignment, pre-existing tools, open source disclosure
Advisor	Advisor agreement with IP and confidentiality terms	Whether advice or contributions could create IP, and who owns it
Agency or outsourced team	Master services agreement	Assignment from the firm, and confirmation that its own staff assigned to the firm

Notice the last row. If you hire an agency, the firm's employees assign to the firm, and the firm must assign to you. Make sure the chain is complete.

Recording and keeping the paperwork

An agreement you cannot find is not much use in diligence. Keep signed copies in one organized place, along with a simple list showing each person, their role, start and end dates, and which agreement they signed.

For patents, an assignment can be recorded with the USPTO's assignment records, which creates a public record of the transfer. Recording is generally recommended as a way to protect against later conflicting transfers, but check current USPTO guidance or ask your practitioner. For copyrights, the Copyright Office also has a recordation system for transfers. Neither step replaces a valid signed assignment.

Common mistakes

Assuming incorporating the company automatically gave it the founders' prior work.
Letting a contractor start before a signed agreement exists.
Using "agrees to assign" language where an immediate assignment was needed.
Copying a form from a different state or business without checking the state employee-invention limits.
Skipping advisors, interns and part-time helpers who contributed.
Ignoring a founder's current employer or university.
Failing to collect signatures from people who have already left.
Treating the paperwork as a one-time task rather than part of onboarding every new person.

A practical checklist

List everyone who has ever contributed code, design, writing or technical ideas, including early helpers and former team members.
Record whether each has signed an assignment and where the copy is stored.
Get founder IP assignments signed and tied to the company's formation and stock issuance.
Put an invention assignment agreement in every employee onboarding package.
Use a services agreement with IP assignment for every contractor, before work begins.
Chase down signatures for past contributors now.
Review your open source usage.
Have an attorney review your templates for your state, then reuse them.

Pair this with the startup legal checklist. This article is general education about US practice and not legal advice. An attorney should draft or review these agreements, since wording and state law matter, and the right approach depends on your facts.

Frequently asked questions

What is an IP assignment agreement?

It is a signed contract transferring ownership of intellectual property, such as code, inventions, designs and related rights, from a person to the company. Startups use them with founders, employees and contractors so the company clearly owns what the business depends on.

Who owns code written by a freelancer?

Generally the freelancer owns the copyright unless a signed written agreement transfers it. Paying for the work typically gives you at most a license, which may be limited. To own the code, use a written contractor agreement that assigns all rights to the company, reviewed by an attorney.

Do founders need to sign an IP assignment?

Usually yes. A founder who created code or inventions before forming the company personally owns them until they are transferred. A written founder IP assignment, often delivered with the stock purchase, moves ownership to the company. Investors commonly look for it in diligence.

What is a confidential information and invention assignment agreement?

It is a common employee agreement combining two things: a promise to keep company information confidential and an assignment to the company of inventions and work created for the business. It may also be called a PIIA. Terms and legal limits vary by state, so have it reviewed.

Is a work made for hire clause enough for contractors?

Often not for software. A commissioned work by a non-employee qualifies only if it falls within specific statutory categories and the parties sign a written agreement. Many attorneys also include a backup assignment of all rights. Ask a lawyer how to structure it for your project.

Can I fix a missing IP assignment after the fact?

Often yes. You can ask the person to sign an assignment now, effective as of their contribution, and you may need to offer something in return. It is much easier before a dispute or a funding round. If someone refuses or cannot be found, speak to an attorney.

Key terms on this page

Copyright for Software Startups: What It Covers IP guideCopyright for software explained for founders: what source code protection covers, when to register, work made for hire, and open source basics.
IP Due Diligence for Startups Before Fundraising IP guideIP due diligence for startups: what investors ask about IP, a practical checklist, and why founder IP assignment should come before funding.
Trade Secrets for Startups: NDAs and Secrecy Steps IP guideTrade secrets for startups: what qualifies, what reasonable secrecy measures look like, when to use an NDA, and whether investors will sign one.
How to Split Equity Between Co-Founders (and Vesting) GuideHow to split equity between co-founders: factors to weigh, equal vs unequal splits, 4-year vesting with a 1-year cliff, and a worked example with round numbers.
Startup Legal Checklist: What to Handle Early GuideStartup legal checklist for first-time founders: entity, founder agreements, IP, EIN, licenses, contracts and privacy. A starting point for an attorney talk.

Learn more from Wysebridge

Wysebridge owns, operates and sponsors Revolutionary Startups, so these are links to its own free resources and directories. Read the disclosure.

Wysebridge U.S. IP law courseA 20-chapter self-study course on U.S. patent, trademark, copyright and trade secret law; module 1 is free.
Wysebridge copyright law guideFree guide to what copyright protects, registration, fair use, work made for hire and the DMCA.
Find a USPTO-registered patent attorney or agentProfiles of USPTO-registered patent attorneys and agents, built from the public USPTO roster. Covers patent practitioners, not trademark-only lawyers.

Part of IP for founders · All guides · Glossary

Sources

General information, not legal, tax or financial advice. Reviewed 11 November 2026.