When engaging outside vendors or contractors, is a simple invoice or work order enough to protect your business? If that vendor is creating or even just “touching” your company’s intellectual property (IP), the answer is a definitive NO.
In this essential video, Phil Crowley, founder of Crowley Law LLC and an experienced corporate lawyer, explains a crucial legal default: in the absence of a specific written agreement stating otherwise, any intellectual property created by an outside vendor (who is not an employee) legally belongs to that vendor. Your company, even though it paid for the work, typically only receives a license to use the IP, not outright ownership.
Why is this a problem? Relying solely on invoices or work orders can lead to:
Confusion over IP Ownership: Uncertainty about who truly owns the valuable work product.
Unexpected Costs: You might face additional charges or difficulties if you need to amend, update, or broadly use the material later, as you don’t own the underlying IP.
Loss of Valuable Company Assets: The core intellectual property developed for your business might not actually be yours to control, leverage, or sell.
Phil Crowley strongly advises businesses to move beyond informal arrangements. He recommends:
Discuss this critical issue with your legal counsel.
Developing and routinely using a standard vendor agreement. This agreement should clearly stipulate that any and all work product and intellectual property created by the vendor for your company is owned by your company.
Ensuring you have proper written agreements with outside vendors is paramount to safeguarding your company’s intellectual property and avoiding costly complications down the line.
If your business engages freelancers, consultants, or any external service providers who contribute to your IP, this video is a must-watch.
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