You paid for it. But do you legally own it?

Not automatically. Under U.S. copyright law, an independent contractor owns the copyright in the work they create unless a written agreement explicitly assigns those rights to you or qualifies the work as made for hire. Simply paying for the work does not transfer ownership. If the contractor signed no IP assignment agreement, the copyright in the code may still belong to them. This is one of the most common IP gaps discovered during startup due diligence. The situation can often be remediated by obtaining a retroactive assignment from the contractor, but that requires the contractor's cooperation and is not always guaranteed.

Currently no. Custom independent contractor and work for hire agreement drafting is available only to clients based in Minnesota because contract drafting is governed by state-specific contract and labor laws, and Armani is licensed to practice law in Minnesota. The Audit and Advisory service remains available to clients nationwide because the analysis is based on federal copyright law, which applies the same way in every state. If you are outside Minnesota and need a custom agreement drafted, Armani can refer you to local counsel in your jurisdiction.

A work made for hire is a legal classification that makes the hiring party the legal author of the work from the moment of creation, as if they had created it themselves. It applies automatically to work created by full-time employees within the scope of their employment. For independent contractors, work for hire only applies if the work falls into one of nine specific statutory categories and there is a written agreement signed before the work is created designating it as a work for hire. An IP assignment is a contractual transfer of copyright from the creator to the business. It works regardless of whether the work qualifies as made for hire, which is why well-drafted contractor agreements include both a work for hire designation and an IP assignment clause as a belt-and-suspenders approach.

Under the Copyright Act, work created by an independent contractor can only qualify as a work made for hire if it falls into one of these nine categories and is covered by a written agreement: a contribution to a collective work, part of a motion picture or audiovisual work, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, or an atlas. Software, standalone graphic design, and most content created by contractors for businesses does not fall neatly into these categories. This is why IP assignment clauses matter so much in contractor agreements, because work for hire status alone often does not apply even when both parties intend it to.

Often yes, but it requires the contractor's cooperation. A retroactive IP assignment is a written agreement signed after the work was completed in which the contractor transfers the copyright to your company. Most contractors will sign one, particularly if the relationship was positive and the original expectation was that you would own the work. Some may ask for additional compensation. A few may refuse or be unreachable, which creates a more difficult situation. The sooner you identify and address ownership gaps, the more options you have. A gap discovered before a funding round is closed is far easier to fix than one discovered mid-diligence with a closing date approaching.

Work created by a full-time employee within the scope of their employment is automatically owned by the employer as a work made for hire, without any written agreement required. The challenge is determining what falls within the scope of employment. Work created by an employee on their personal time, on personal equipment, and unrelated to their job duties may not be owned by the employer even if the employee created it during the employment period. If there is any ambiguity about whether certain work was created within or outside the scope of employment, an employment agreement with a clear IP assignment clause is the cleanest way to resolve it prospectively.

Before the work starts. A work for hire designation must be agreed to in writing before creation, not after, in order to be legally effective for independent contractors. An IP assignment can be done after the fact, but it is always cleaner to have it in place before the engagement begins. Any time you engage a contractor to create something, whether code, design, content, photography, or any other original work, a written agreement with an IP assignment clause should be signed before work begins. It is a small investment that eliminates a potentially very large problem down the road.