Founders often mistakenly assume that they will own the IP as long as they pay a consulting company for its work. However, while payment is generally enough to

Founders often mistakenly assume that they will own the IP as long as they pay a consulting company for its work. However, while payment is generally enough to secure IP rights from employees, more is needed when dealing with contractors. When it comes to rights in copyrighted work product, a consultant will own the IP unless a contract explicitly treats it as a work for hire or unless the rights are expressly assigned by the contract. As appears from this piece, these rules are so fundamental that even a startup that pays a large amount of money can still be found not to own the IP resulting from that development work. Even with the litigation, the only relief obtained by the company was a right to modify the work licensed to it, not owned by it. A disastrous outcome by any measure. For a general discussion and some illustrations of how these rules work, see my write-up at http://grellas.com/faq_business_startup_015a.html http://grellas.com/faq_business_startup_015a.html.