IP Assignment and Background Asset Carveouts in an Independent Contractor Agreement: A Guide for a Graphic Designer

Introduction

As a graphic designer working as an independent contractor, understanding intellectual property (IP) ownership and background asset carveouts in your agreements is vital. These elements play a significant role in defining who owns the work you create and what tools and methods you use in your design process. Failing to clarify these aspects can lead to misunderstandings and disputes with clients, which can impact your career and cash flow. Think of this guide as your friendly roadmap to navigating these potentially tricky waters. If you want to ensure you’re protected while satisfying your clients, read on and take steps to incorporate these clauses into your contracts.

What Is IP Assignment?

IP assignment is a term that refers to the process of transferring ownership rights of intellectual property from one party to another. In most creative fields, once a client pays for your design work, they generally expect to own the resulting creations. This shift in ownership is what IP assignment clarifies. For you, as a designer, having clear terms in your agreement means you understand exactly what rights you are giving to your clients after they make a payment. Lack of clarity can lead to confusion and disputes about who can use or modify your work in the future.

What Are Background Assets?

Background assets refer to the proprietary materials, tools, methodologies, and procedures you use in your work that were developed independent of the specific project for your client. This can include templates, software, design frameworks, and creative strategies that are integral to your process but are not exclusive to the project at hand. Carving out these assets in your contract protects your foundational work and ensures that even when your designs are handed over, you retain ownership of the tools that allow you to create them. This balance is essential; it allows you to maintain your creative independence while meeting client requirements.

Work Product. Upon full payment of the Fees provided in the SOW, Consultant agrees that the deliverables, work product, content and other materials created, developed or conceived by Consultant for Client for purposes of this Agreement as provided in the SOW (the “Work Product”) shall be the sole and exclusive property of the Client. Consultant hereby irrevocably assigns to Client all right, title and interest worldwide in and to the Work Product, including all copyrights, patents, trademarks, trade secrets, and other intellectual property rights therein. Consultant acknowledges that to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 or any similar or analogous law or statute of any other jurisdiction and such copyrights are therefore owned by Client. To the extent that the Work Product and/or the results and proceeds of the Services may ever be determined under the laws of any country not to be a “work made for hire,” Consultant hereby confirms that effective on the date of creation of the Work Product, it assigns (or has assigned) to Client all right, title and interest thereto (including all copyright and associated rights, extensions and renewals, and all causes of action appurtenant thereto) throughout the world. If Consultant has any rights in any jurisdiction, including without limitation “artist’s rights” or “moral rights,” in the Work Product that cannot be assigned, Consultant hereby unconditionally and irrevocably waives the enforcement of such rights, and all claims and causes of action of any kind against Client or Client’s customers.

Background Assets. “Background Assets” are the materials, tools, utilities, techniques, technical frameworks, data models, object models, methodologies, know-how and information (both in object code and source code) made available to Client by Consultant under this Agreement that are proprietary to Consultant. This Agreement grants Client a non-exclusive limited right to use the Background Assets and does not constitute a sale or convey title or ownership of the Background Assets or any intellectual property rights therein to Client. Consultant is and shall remain the sole and exclusive owner of all right, title and interest in and to the Background Assets, including all improvements or modifications made thereto, and all intellectual property rights embodied in or related to the Background Assets.

This balance between IP assignment and background asset carveouts is beneficial for both you and your client. Your client receives the full rights to the work you create, which is often essential for their business needs, while you maintain ownership of the tools that help you deliver that work.

Example Scenario

Imagine you are a graphic designer working with a tech startup. You use a particular design software and a set of unique templates you've developed over time. If your agreement does not specify that these tools are your background assets, your client might assume they have full ownership when they pay for the final designs. This misunderstanding could prevent you from using your own templates in future projects or lead to complications if your client tries to modify them without your consent. By carving out these background assets, you ensure that you can continue to use your proprietary designs while also meeting your client's expectations.

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FAQs

What is the difference between work product and background assets?

Work product refers to the actual designs or outputs created for a client, while background assets are the tools and methodologies you use to create that work. You transfer ownership of the work product to the client but retain rights to the background assets.

Do I grant a license to the background assets?

Typically, a limited non-exclusive license is granted to the client for the use of background assets within the scope of the project. This means they can use your tools for the project but do not own them.

Are source files included in the final product I deliver?

It depends on your agreement. Often, clients expect finished files, but the rights to source files can be negotiated. Make sure to clarify what files will be provided and under what terms.

How do I handle third-party or open-source components in my designs?

Be sure to disclose any third-party components you use and clarify their ownership. Ensure these components are licensed correctly, and determine if they can be included in the final product.

How can I document the split between work product and background assets in the SOW?

Make it clear in your Statement of Work (SOW) that the work product is owned by the client, while you retain ownership of the background assets. Use specific clauses to outline this division clearly.

Final Thoughts

As a graphic designer, addressing IP assignment and background asset carveouts in your agreements now can save you headaches later. By ensuring that both you and your clients have a clear understanding of rights and ownership, you set up a healthy working relationship. Don't wait to incorporate these crucial clauses into your agreements—you are worth the protection they provide. If you need help, feel free to reach out and get the guidance you need.