What Is IP Assignment Agreement?

In the US, copyright and inventions default to the creator (the individual who made them), not the employer or company, unless there is a written agreement to the contrary. This means that without an IP assignment agreement, a founder who built code before formally incorporating, a contractor who developed software, or an employee whose employment agreement didn't include an IP assignment clause may retain ownership of IP the company believes it owns. Proper IP assignment requires a written agreement, signed by the creator, explicitly transferring ownership to the company. IP due diligence in fundraising or M&A transactions specifically looks for IP assignment gaps — which can be deal-killers or require costly cleanup.

One of the most common issues found in startup legal due diligence is incomplete IP assignment — a co-founder who left before signing an agreement, a contractor who wrote critical code without a proper contract, or an employee whose offer letter didn't include an assignment clause. Fixing IP ownership gaps is possible but expensive and complicated. Getting it right at the start, with a startup attorney's guidance, takes one hour and costs far less than fixing it later.