You hired a developer, they built your app, you paid the invoice. So you own the code, right? Not necessarily — and that gap can surface at the worst possible moment.
Many founders assume that paying someone to create something means the company owns it. For independent contractors in particular, that assumption is often wrong. Without a written assignment, the creator may retain ownership of the work — even after you've paid in full. It's one of the most common and consequential gaps in a young company's legal foundation.
Why Paying Isn't the Same as Owning
The rules around who owns created work are not always intuitive. Employees acting within the scope of their job often create work the company owns by default — but contractors frequently do not, unless there's a written agreement assigning the intellectual property to the company. The fix is simple in principle: get the assignment in writing, signed, before or at the time the work is done.
Not sure who owns your product? An IP audit can find the gaps before they become a problem. We help businesses across Arizona, California, and Texas lock down ownership.
Book a Free Consultation →Where the Trap Springs
The gap usually stays invisible until a high-stakes moment forces everyone to prove ownership:
- Fundraising — investors' due diligence asks for clean IP assignment from everyone who built the product.
- Acquisition — a buyer won't pay for IP the company can't prove it owns.
- A dispute — a former contractor or founder claims ownership of a core feature.
In each case, a missing signature from years earlier can stall or sink the deal.
How to Close the Gap
- Have every founder, employee, and contractor sign an IP assignment agreement.
- Do it at the start of the relationship — not retroactively, when leverage has shifted.
- Make sure the assignment covers everything created for the company, including code, designs, and content.
- Pair assignments with confidentiality terms so the work and the know-how are both protected.
This connects closely to protecting your business idea and your broader intellectual property strategy. If your brand is part of the asset, our trademark practice handles that side.
Frequently Asked Questions
Not necessarily. Independent contractors often retain ownership of what they create unless there's a written agreement assigning the intellectual property to your company. Payment alone doesn't always transfer ownership.
Work created by employees within the scope of their job is often owned by the employer by default. Contractor work frequently is not — which is why written IP assignment agreements with contractors are so important.
Sometimes, but it's harder and the leverage has shifted — the creator may want something in return, or may be unreachable. It's far better to get assignments signed at the start of the relationship.