The statutory default - and the false assumption
Under section 11(1) of the CDPA 1988, the author is the first owner of copyright. The employer exception in section 11(2) applies only to works made by an employee in the course of employment - so a commissioner does not automatically own copyright in works created by an independent contractor. The pervasive assumption that paying for work means owning its IP is simply wrong.
Territoriality matters here too: this CDPA default applies where UK copyright is the relevant right. In cross-border deals, each country sets its own initial-ownership rule - the US work made for hire doctrine can vest copyright in the commissioning party but only on strict conditions rarely met for software contractors, while most civil-law systems follow the author-first principle. Do not assume any jurisdiction's default favours the commissioner.
Design rights: the IP Act 2014 alignment
English law once created a trap for the unwary: commissioners automatically owned design rights but not copyright. The Intellectual Property Act 2014 removed the asymmetry. Since 1 October 2014, the default owner of UK unregistered design right (section 215 CDPA) and of registered designs (Registered Designs Act 1949) is the designer, not the commissioner, unless the designer is an employee.
So the law is now uniform - and uniformly dangerous for clients. Whether the deliverable is code (copyright), a user interface (design right), or a database, the default is that the independent contractor owns it. Without an express written assignment, the client pays for development but receives only an implied licence - one that may be revocable, non-exclusive, and insufficient for an exit or IPO.
Employee inventions: the statutory override
Employee inventions work differently from copyright. Under section 39(1) of the Patents Act 1977, an employee's invention belongs to the employer only if it was made in the course of the employee's normal (or specifically assigned) duties where an invention might reasonably be expected to result, or where the employee had a special obligation to further the employer's interests. And section 42 makes any contract term that diminishes an employee's statutory rights in inventions unenforceable - unlike copyright, an employer cannot simply contract for ownership of all employee inventions.
This mandatory character applies directly to UK patents, but many jurisdictions have analogous (often stricter) employee-invention statutes, so an English governing-law clause will not override local mandatory rules. On the boundary of employment, Penhallurick v MD5 Ltd [2021] EWCA Civ 1770 held that software a former officer developed largely at home, in his own time, was still made in the course of employment once it had become his central task - and that a bonus agreement, even without express assignment words, can assign existing and future copyright if its substance shows that intention.
Joint ownership is commercially toxic
Joint IP ownership sounds fair and works badly under English law. For copyright, joint owners cannot grant a licence without the consent of all co-owners. For patents, under section 36 of the Patents Act 1977 each co-owner may work the patent themselves but cannot license, assign, or mortgage their share without all co-owners' consent (Hughes v Paxman [2006] EWCA Civ 818), and - unlike US law - there is no duty to account between co-owners for profits from independent exploitation.
The practical results are licensing deadlock, devaluation through competitive self-exploitation, enforcement paralysis, and deterrence of investors and acquirers. Prefer sole ownership with a cross-licence; if joint ownership is commercially unavoidable, add a management protocol covering decision-making, licensing thresholds, enforcement, and exit.
The fix: an express assignment
Across all of these, the cure is the same: an express written assignment of foreground IP, drafted with present-assignment language (see the assignment guide). Do not rely on the implied licence the law will otherwise give the client - it is usually narrower than the client needs and may be revocable.
In review, find the assignment clause first. If it is missing, or merely an agreement to assign in future, or silent on future and non-UK rights, the client may have paid for work it does not own. That gap is the single most common, and most expensive, IP drafting failure.
Use at the desk
Practical checklist
- Do not assume paying for work means owning it - the contractor owns it absent an assignment (s.11 CDPA).
- Remember the designer owns commissioned design rights since the IP Act 2014 (s.215 CDPA; Registered Designs Act 1949).
- For employee inventions, apply the Patents Act 1977 s.39 test - and remember s.42 makes it mandatory.
- Check 'course of employment' carefully for employee-created works (Penhallurick v MD5 [2021] EWCA Civ 1770).
- Avoid joint ownership - it causes deadlock (copyright; patents s.36, Hughes v Paxman [2006] EWCA Civ 818). Prefer sole ownership plus cross-licence.
- Secure foreground IP with an express written assignment, not an implied licence.
This guide is informational only and is not legal advice. It does not replace advice from licensed counsel on the facts of a specific transaction.
Product demo
Use the guide for context. Use Veqtor for the Word documents.
Watch Claude compare negotiation drafts and create a separate Word document with proposed tracked changes.
See Veqtor work with Word redlines