Before you hire your first employee. Before you bring on a contractor. Before your co-founder writes a single line of code.
You need one document in place: an Intellectual Property (IP) Assignment Agreement.
This isn't optional. This isn't "we'll handle it later." This is the foundation of whether your company actually owns what you think it owns.
Let me show you why, through the questions that determine what needs to be in your agreement.
Question 1: Who Has Already Created Something for Your Company?
Write down every person who has:
Written code
Designed your product
Created your logo or brand materials
Built prototypes
Drafted marketing copy
Developed your pitch deck
Created any content for the business
Now ask: Did they sign an IP assignment agreement BEFORE they created it?
If the answer is no, your company might not own what they created.
Why this matters:
Under U.S. copyright law, the person who creates something owns it by default - unless there's a written agreement transferring ownership, or they're an employee creating it within the scope of employment (the "work for hire" doctrine).
The nightmare scenario I see constantly:
Founder hires a contractor to build MVP. Contractor builds it. No IP agreement. Founder and contractor have falling out. Contractor says "actually, I own the code I wrote. Pay me $50k or I'm not transferring it."
Your company is now held hostage by someone who owns your core product.
Question 2: Do You Have Co-Founders?
If yes: Did you all sign IP assignment agreements before you started building?
The co-founder trap:
You and your co-founder incorporate the company, then start building together. You assume everything you both create belongs to the company.
Wrong.
Without an IP assignment agreement, each co-founder owns what they individually created. The company might own nothing.
What this breaks:
Investor due diligence (they'll require clean IP ownership)
Your ability to sell the company
Your co-founder's ability to leave without taking "their" IP with them
The fix:
Every co-founder signs an IP assignment agreement assigning all past, present, and future IP created for the company to the company.
Do this before you write another line of code.
Question 3: Did Anyone Work on This Before the Company Was Incorporated?
The pre-incorporation problem:
You built a prototype before incorporating. Or your co-founder wrote the initial code as a side project. Or you designed the product concept while still at your day job.
Critical question: Who owned that work?
If you created it as an individual, you own it personally. When you incorporate, the IP doesn't automatically transfer to the company.
What you need:
An IP assignment agreement that specifically covers:
All work created before incorporation
Assignment of that pre-existing IP to the company
Representations that you had the right to assign it (you didn't create it using your previous employer's resources)
Investor red flag:
If you can't prove the company owns its foundational IP, investment deals fall apart. Term sheets get pulled over this.
Question 4: Has Anyone Created Anything While Still Employed Elsewhere?
The moonlighting trap:
You're working full-time at BigTech Co. You start building your startup idea nights and weekends. You're careful not to use company equipment or time.
Plot twist: Your BigTech Co employment agreement probably says they own anything you create related to their business, or created using their resources, or sometimes even anything you create period.
What you need to know:
Review your employment agreement (and every co-founder's and early contributor's)
Look for IP assignment clauses - many say "anything related to the company's current or future business"
Look for non-compete and invention assignment provisions
Determine if your startup conflicts
What your IP assignment should include:
A representation that the person signing:
Has the right to assign the IP
Hasn't used another employer's resources, information, or time
Isn't violating any agreement with a former or current employer
Isn't assigning anything owned by someone else
This protects your company if it turns out they were wrong.
Question 5: What Exactly Are You Building?
Your IP assignment needs to cover everything your company might create:
Code and software:
Source code
Object code
Algorithms
APIs
Databases
Software architecture
Creative works:
Designs (UI/UX, product, graphic)
Marketing materials
Website content
Documentation
Videos, images, audio
Inventions and innovations:
Patents and patent applications
Trade secrets
Processes
Methods
Technical innovations
Brand and identity:
Trademarks
Logos
Brand names
Slogans
Trade dress
Data and information:
Customer data
Business processes
Proprietary information
Know-how
Your IP assignment agreement should cover ALL categories relevant to your business.
Don't just say "code." Be comprehensive.
Question 6: Will People Create IP Outside of "Work Hours"?
The weekend project problem:
Your employee has a great idea for a new feature. They build it over the weekend at home. Do you own it?
Depends on your IP assignment agreement.
What to include:
Clear language that IP created for the company belongs to the company, regardless of when or where it was created.
Standard language: "Any work product, invention, or intellectual property created for the benefit of the Company, whether during business hours or not, whether on Company premises or not, belongs to the Company."
Question 7: What About Ideas That Haven't Been Built Yet?
The idea ownership question:
Someone proposes a feature. You don't build it yet. Six months later, they leave and build it at their new company. Do you have any claim?
What your agreement should cover:
Inventions (things conceived but not yet built)
Ideas and concepts disclosed to or created for the company
Future improvements to existing IP
The agreement should cover not just what's been created, but what's been conceived or disclosed.
Question 8: What If Someone Leaves the Company?
The departure scenario:
Employee leaves. They worked on your core product. Can they:
Use what they learned to build a competitor?
Take the code they wrote?
Claim ownership of features they designed?
What your IP assignment should include:
Assignment survives termination - they can't reclaim IP after leaving
Return of materials - all code, documents, files must be returned
Continuing obligations - confidentiality and IP assignment continue after departure
No retained rights - they keep no copies, no rights to use
Question 9: What About Open Source and Third-Party Code?
The contamination risk:
Developer uses an open-source library with a GPL license. Suddenly your entire codebase might need to be open-sourced due to GPL's "viral" nature.
What your IP assignment should include:
Representations that the person:
Will disclose all third-party code used
Won't incorporate code that conflicts with company's IP rights
Will follow company guidelines on open source usage
Hasn't copied code from previous employers
Question 10: Are You Working With Contractors or Agencies?
Work-for-hire pitfalls:
You hire a design agency to create your website. You pay them. You assume you own it.
Not necessarily.
Without a written agreement, the agency might own the copyright and you only have a license to use it.
What you need:
Clear "work for hire" language in your contract:
"All work product created shall be considered a 'work made for hire' under U.S. copyright law."
If it doesn't qualify as work for hire, explicit assignment of all rights
Assignment of moral rights (where applicable)
No retained rights for the contractor
Question 11: What's Your Backup Plan If Someone Won't Sign?
The refusal scenario:
You ask everyone to sign IP assignments. Someone refuses or claims they should get extra compensation.
What you need to decide:
Is this person essential enough to negotiate?
What's your walkaway point?
What leverage do you have?
For contractors: Don't let them start work without a signed agreement. No exceptions.
For employees: Make IP assignment part of the offer. No signature, no job.
For co-founders: This is harder. But if they won't sign, you have a much bigger problem about trust and alignment.
Question 12: Have You Actually Documented What Currently Exists?
Your IP assignment should reference an exhibit or schedule listing:
Existing IP being assigned (if any)
Previous inventions the person wants to exclude
Any limitations or carve-outs
This creates a clear record of what was assigned when.
The Bottom Line: What Your IP Assignment Agreement Must Include
Based on your answers above, your agreement needs:
1. Broad Coverage:
All categories of IP (code, designs, inventions, ideas, etc.)
Past, present, and future work
Work created anytime, anywhere
2. Clear Assignment:
Automatic assignment upon creation
No retained rights
Assignment survives termination
3. Key Representations:
Person has right to assign
No conflicts with other obligations
No third-party IP included without disclosure
4. Practical Terms:
Return of materials upon departure
Cooperation with patent filings
Moral rights waived (where applicable)
5. Special Provisions Based on Your Situation:
Pre-incorporation IP assignment
Work-for-hire language for contractors
Open source compliance
Exclusions for prior inventions (if negotiated)
When You Need This Document
Before:
First contractor starts work
First employee starts work
Co-founders write any code
Anyone creates anything for the company
Not after. Before.
The Conversation That Tells You Everything
If you're reading this thinking "oh shit, we don't have this" - you're not alone. Most founders don't realize this matters until investor due diligence.
But here's the question that should ask:
"Can you prove your company owns its core product?"
If you can't immediately produce signed IP assignment agreements from everyone who built it, the answer is no.
And that's a problem you need to fix today.
Not next week. Not after your next hire. Today.
Because without clean IP ownership, you don't have a company. You have a really expensive shared project that nobody fully owns.