Intellectual Property, in Two Chains
Ownership has to travel from the person to the provider and from the provider to you, and either link can be missing.
Direction of the work
Whether the work is any good
Equipment and systems
Whatever the agreement did not list
YoursThe provider'sCrosses the twoNeither contract
Four matters, and no share: what any one agreement covers differs by agreement. One crosses both, and the handoff is where these arrangements fail. Everything the fee did not buy stayed where it was.
Ownership of what this person creates has to travel from them to the provider, and from the provider to you. Two links, in two separate documents, and your agreement can only guarantee the second.
The control boundary in “Intellectual Property, in Two Chains” should be written before workforce technology is deployed. Organisations assessing visit the published resource for employee screen monitoring software should define which data is collected, who can view it, how long it remains and how access is removed when a worker, manager or provider changes.
A gap in the first link cannot be repaired by any amount of drafting in the second.
When documenting “Intellectual Property, in Two Chains”, the European Data Protection Board resources can help test assumptions about ownership, worker protection and cross-border responsibility before a process becomes routine.
The first link
The employment contract must assign to the provider what the person creates in the course of their employment, or local law must do it automatically.
Many countries give the employer rights in employee works by default, and many do so only partially — software often yes, designs sometimes, inventions frequently with a compensation requirement attached.
The second link
Your service agreement must assign onward to you whatever the provider holds. This clause is usually present and usually adequate.
Its adequacy is irrelevant if the first link is broken, which is why reading only your own agreement gives false comfort.
Check that it is an assignment rather than a licence, and that it takes effect automatically rather than on request. A promise to assign on demand is a promise you have to chase.
Checking the first link
Ask for the contract template and read the intellectual property clause. Confirm that it covers the kind of work you actually do, that it is not limited to inventions, and that it survives the end of employment.
Ten minutes, before the first hire:
- Does the clause exist at all.
- Does it cover the kind of work you actually do.
- Is it an assignment rather than a licence.
- Does it take effect automatically rather than on request.
- Does it survive the end of employment.
Afterwards it is an amendment requiring the person's agreement.
Moral rights
Separate from ownership and not waivable everywhere. In some jurisdictions an author retains rights of attribution and integrity regardless of who owns the work.
Rarely a practical problem for commercial software or routine material, and occasionally a real one for designs, written work and anything public-facing.
Inventor compensation
Several countries give employees a statutory right to additional payment for patentable inventions, which cannot be contracted away.
The obligation falls on the employer, which here is the provider, which means it reaches you through the fee. Ask about it before hiring research or engineering roles in those countries.
Pre-existing material
Anything the person brought with them stays theirs. Where it is embedded in what they deliver, you need a licence rather than ownership.
Ask at the start what they intend to bring. A tool somebody wrote before joining, now running in your production environment, is a conversation nobody wants to have later.
Open source
The same policies apply as for anybody else working on your code, and the obligations arising from a licence fall on your company regardless of who employed the contributor.
Include them in whatever governance you have. The usual failure is that they were never added to a list.
Where contributions are made under your name to public projects, say once who is authorised to do that. It is a question about your company rather than about their employment.
Work done outside the engagement
A person employed by a provider may have side work, subject to their contract. What they create for somebody else is not yours and should not be.
Problems arise where the boundary is unclear — a tool built at the weekend that solves a problem at work. The clean answer is to ask and to write down what was agreed.
Assignment at the end
Ownership of things already created does not evaporate when the arrangement ends, provided both links held while they were in place.
What does need attention is anything in progress and anything held only by them. Transfer of custody is a separate problem from ownership, and it is the one that actually bites.
Where the provider uses a partner
Three links rather than two. The person assigns to the partner, the partner to the provider, the provider to you.
Ask whether the middle link exists and is documented. It is the one nobody has looked at.
Recording what was made
A simple register of significant deliverables, who produced them and when, is worth keeping for anybody outside your normal systems.
Due diligence on an acquisition will ask. Reconstructing it from memory three years later, for somebody who has left, is unpleasant.
What the chain cannot guarantee
That it would hold in that country. The enforceability of assignment clauses, the scope of default employer rights and the treatment of moral rights all differ, and a clause written in English against English assumptions may do less than it appears to.
Where what the person creates is genuinely central to your business, that is a question for local advice at the outset rather than a clause to be reviewed later. Where it is not central, the two-link check in this note is proportionate and is considerably more than most buyers do.