HOW DO YOU WRITE AN INTELLECTUAL PROPERTY CLAUSE?

An intellectual property clause is a contract provision that defines who owns the IP (copyright, patents, trade marks, designs, trade secrets) created during a business relationship. It specifies ownership rights, assignment of IP, moral rights waivers, and obligations to assist with IP registration.

A basic IP statement example: ‘All intellectual property created by the Contractor in performing the Services shall be owned by the Client. The Contractor assigns all copyright, patent rights and other IP rights in the Deliverables to the Client.’ See the sample clauses above for more comprehensive examples.

Under section 35(6) of the Copyright Act 1968 (Cth), employers automatically own copyright in works created by employees in the course of their employment. However, this only covers work done as part of the employee’s duties, not side projects or work done outside normal responsibilities. A comprehensive IP clause should capture all IP created using company resources or time. 

By default, contractors own the intellectual property they create, even if you paid for the work. This was confirmed in Oceanroutes (Australia) Pty Ltd v M C Lamond [1984]. To obtain ownership, your contractor agreement must include an express IP assignment clause. Without one, you’re only getting a limited licence to use the work, not ownership.

Moral rights are personal rights held by creators under the Copyright Act: the right of attribution (to be credited as author), the right of integrity (to object to derogatory treatment), and the right against false attribution. Moral rights cannot be assigned, but the creator can give consent or a waiver. Include a moral rights consent clause if you need flexibility to modify, rebrand, or use the work without crediting the creator.

A service agreement IP clause should cover: (1) definition of intellectual property, (2) ownership of new IP created during the engagement, (3) treatment of pre-existing/background IP each party brings, (4) licences granted for background IP used in deliverables, (5) moral rights consent, (6) warranty that work is original, and (7) obligation to assist with registration or enforcement.

Generic templates can be a starting point, but should be customised for your specific situation. Australian IP law differs from US and UK law; clauses drafted for other jurisdictions may not be valid or effective in Australia. Have a lawyer review any IP clause before relying on it, especially for high-value projects.

Assignment transfers ownership you become the owner of the IP. A licence grants permission to use the IP while ownership remains with the creator. If you want full control (to sell, modify, sublicense, or sue for infringement), you need an assignment. If you only need to use the work for specific purposes, a licence may be sufficient.

Yes. Under section 196 of the Copyright Act 1968, an assignment of copyright must be in writing and signed by the assignor. Verbal agreements to assign IP are not enforceable. Always ensure your IP clause is in a written, signed contract.

Default rules apply: for employees, the employer owns work created in the course of employment; for contractors, the contractor owns the IP. Without a clause, disputes often arise about whether specific work was ‘in the course of employment’ or what rights the paying party actually has. Adding a clear IP clause avoids these expensive disputes.