Here is a question every founder, agency owner and creative director should be able to answer:
Who owns the work after the contractor has been paid?
Many businesses assume the answer is obvious. They paid for the website, the software, the photography, the illustrations or the copy, so surely they own it.
Copyright law does not work that simply.
The U.S. Copyright Office explains that simply hiring an artist, paying a fee or providing instructions does not by itself make a commissioned work a “work made for hire.”
For an independent contractor, a commissioned work qualifies as a work made for hire only if the statutory requirements are met—including a signed written agreement expressly treating it as a work made for hire and the work fitting one of the limited statutory categories.
That last part is easy to miss.
Many commissioned works created by freelancers—particularly ordinary software code, branding assets and many standalone visual works—may not fall within the statutory categories for specially commissioned works made for hire.
That does not mean a business cannot obtain ownership.
It means the agreement may need to use a different mechanism, such as a properly drafted copyright assignment.
A contract can transfer ownership by assignment, but the wording matters. Businesses should not assume that a sentence saying “all work belongs to the client” has the same legal effect as a carefully drafted present assignment of copyright rights.
The agreement should also address pre-existing materials, third-party assets, licences, revisions and other intellectual-property issues that can become important later.
Imagine a startup is raising a seed round. During due diligence, an investor asks for proof that the company owns the code, brand assets and other core intellectual property.
The founder discovers that three freelancers created important assets but never signed agreements that clearly transferred the relevant rights.
The problem did not begin during the investment process. It began years earlier when everyone assumed, “Of course we own it—we paid for it.”
That is why IP ownership should be sorted out when the work is commissioned, not when the company is preparing for acquisition, funding or litigation.
Before hiring a contractor, ask:
Those are not always the same thing.
And that distinction becomes even more important when the asset is central to the value of the company.
If you have ever hired a designer, developer or photographer, do you know whether your contract actually transferred the rights you thought you were buying?
The important question is not simply whether you paid someone to create the work. It is whether your agreement clearly establishes what rights were created, who owns them and what happens to those rights when the relationship ends. For valuable software, branding, content and creative assets, that distinction can affect the entire value of a business.
Book an IP consultation with Lum Law Group if your company relies on freelancers, developers, designers, photographers or other creators. We can review your contracts and IP ownership structure before a dispute or investor diligence process exposes a gap.
A. Justin Lum has been practicing law since 1993, with more than 30 years of experience serving clients across a wide range of legal matters. A graduate of the University of California, Berkeley and UC Davis School of Law, he is also a past President of the Southern California Chinese Lawyers Association, continuing a proud family legacy of leadership in the legal profession.
At Lum Law Group, we frequently speak with individuals and business owners who have already invested significant time and resources into their goals—whether launching a new brand or navigating a complex immigration journey—before discovering unforeseen legal hurdles. Addressing these matters early in your planning process provides much greater flexibility. It empowers you to make informed decisions before committing substantial financial resources or risking unnecessary delays. Because every legal situation is unique, developing the right strategy requires a careful review of your specific circumstances, business objectives, or immigration history. Whether you need general counsel to protect your growing enterprise or strategic guidance to secure your family’s future in the United States, proactive legal planning is always your strongest asset.
How many founders do you think could confidently explain who owns the code, design files and creative work they have already paid for?
