Introduction

Intellectual property (IP) can be the most valuable asset in a partnership—but only if ownership clauses in partnership agreements are clear from the start. Whether you’re co-developing a product, creating content together, or investing in a joint venture, unclear IP terms can lead to legal disputes, loss of control, or even investor hesitation.

In this guide, we’ll walk you through how to draft IP ownership clauses in partnership agreements, what language to include, and how to avoid the most common mistakes. If you’re a startup founder, consultant, or business owner collaborating with others, this guide is for you.

Table of Contents

Who This Is For / When to Use It

This article is designed for:

Founders entering a co-founder or equity partnership
Consultants or agencies building joint products with clients
Startups developing proprietary technology or tools
Business owners working with investors or licensees

If you’re preparing a partnership agreement where something valuable will be created—like software, designs, trademarks, or marketing content—you’ll benefit from strong ownership clauses in partnership agreements.

Step-by-Step: How to Draft IP Ownership Clauses in Partnership Agreements

Step 1: Define What IP Is Being Created

Why it matters: You can’t assign ownership of what you haven’t clearly defined.

What to include:

Specify the types of intellectual property: software code, designs, trade secrets, databases, trademarks, etc.
Use clear language like: “Intellectual Property includes, but is not limited to…”
State whether improvements, derivatives, or modifications are included.

Common mistake: Leaving definitions too vague—this opens the door to disputes over ownership clauses in partnership agreements.

Step 2: Determine Who Owns What (And When)

Why it matters: Ownership depends on context—who created it, when, and under what agreement.

Options to consider:

Joint Ownership: Both parties co-own IP developed together. Risky without clear use rights in the ownership clauses in partnership agreements.
Assigned Ownership: One party owns all IP and grants usage rights to the other.
Work-for-Hire: One party creates the IP, but the other is the legal owner from the start.

Pro tip: Clarify whether the ownership includes future updates or iterations of the original IP in the ownership clauses in partnership agreements.

Step 3: Specify Use Rights and Licensing Terms

Why it matters: Even if you don’t own the IP, you might need ongoing rights to use it.

What to clarify:

Can each party use the IP freely, or only for specific purposes?
Is the license exclusive or non-exclusive?
Are there any royalties or revenue-sharing obligations?

Example clause:
“Party B shall have a non-exclusive, royalty-free license to use the jointly developed software for internal business purposes only.”

Step 4: Address IP Created Before or After the Partnership

Why it matters: Existing IP and future IP can both cause confusion if not handled correctly.

What to do:

Background IP: Clearly identify any IP that existed before the partnership. Specify that it remains the property of its original owner.
Post-Termination IP: Who owns improvements made after the partnership ends?

Legal tip: Use an annex to list and describe background IP to avoid ambiguity later, including clear ownership clauses in partnership agreements.

Step 5: Include Confidentiality and Assignment Clauses

Why it matters: Ownership means nothing if sensitive IP is leaked or improperly transferred.

Essential inclusions:

A strong confidentiality clause protecting proprietary information.
An assignment clause stating that all IP developed during the partnership will be legally transferred to the agreed party.

Sample assignment clause:
“Each party agrees to assign and hereby assigns all rights, title, and interest in and to the Intellectual Property developed in the course of this Agreement, to the designated owner as defined herein.”

Step 6: Plan for Disputes and Enforcement

Why it matters: Even with a good clause, disputes can arise. Plan ahead.

What to include:

A dispute resolution clause (mediation, arbitration, or court jurisdiction)
A clause stating who can enforce IP rights and how infringement claims will be handled

Pro tip: If joint ownership is involved, specify how decisions will be made about enforcement or licensing to third parties in the ownership clauses in partnership agreements.

Case Example: Preventing a Co-Founder IP Dispute

A mid-stage SaaS startup approached us after an informal co-founder split. Both founders had contributed to early product development, but only one was listed as the IP owner in the initial registration. The other assumed joint ownership based on verbal agreements.

We helped the client draft a retroactive IP assignment clause, signed a mutual waiver of claims, and implemented clear ownership clauses in partnership agreements for their next venture. The revised contract prevented future disputes and reassured incoming investors.

Recap: IP Ownership Clause Checklist

Before finalizing your partnership agreement, check that your ownership clauses in partnership agreements:

Define all types of IP being created or shared
Clearly assign ownership or joint ownership
Include detailed licensing rights (who can use what, when, and how)
Distinguish between background, current, and future IP
Contain confidentiality and IP assignment clauses
Outline dispute resolution mechanisms
Are reviewed by a lawyer in your jurisdiction

Final Thoughts: Protect the Most Valuable Asset in the Room

When drafting partnership agreements, it’s easy to focus on equity and forget intellectual property. But in many cases, your IP is the real value driver—and the main reason investors, partners, or buyers will be interested.

A clear IP ownership clause doesn’t just reduce legal risk. It gives all parties peace of mind, clarity over their roles, and a stronger foundation to build and grow.

Want help reviewing your IP ownership clauses in partnership agreements or drafting a partnership agreement? Book a consultation or download our free IP Clause Checklist for Founders.