IP Assignment

IP assignment is the contractual transfer of intellectual property ownership from individuals (founders, employees, contractors) to the company. It is typically executed through Proprietary Information and Inventions Agreements (PIIAs) signed by employees and Confidential Information and Invention Assignment Agreements (CIIAAs) signed by contractors, ensuring that all IP created during employment or in connection with services belongs to the company rather than the individual creator. IP assignment is foundational for company ownership of its product, technology, and competitive advantages, and missing IP assignments are one of the most-common cap-table cleanup issues discovered during diligence. It is one of the most-important legal hygiene items at startups and one of the most-often-missed.

The core principle:

Default rule: IP created by individuals belongs to those individuals (in most jurisdictions).

Override needed: explicit contractual transfer required to make IP belong to the company.

For employees (in US): work-for-hire doctrine + IP assignment typically conveys IP to employer.

For contractors (in US): work-for-hire generally doesn't apply; explicit IP assignment required.

For founders: founders' pre-incorporation work needs to be assigned to the company at founding.

Where IP assignments live:

PIIA (Proprietary Information and Inventions Agreement):

• Signed by every employee at hiring.
• Covers IP created during employment.
• Also covers confidentiality and other restrictive covenants.

CIIAA (Confidential Information and Invention Assignment Agreement):

• Signed by contractors and consultants.
• Specifically assigns IP created during the services.
• Critical because work-for-hire often doesn't apply to contractors.

Founder IP Assignment:

• Signed by founders at company formation.
• Assigns all pre-incorporation work to the company.
• Often missed by founders who built MVP before formal incorporation.

Common IP assignment failures:

Missing founder IP assignment: founders' pre-incorporation work not legally owned by the company. Discovered during diligence; can disrupt fundraising.

Missing contractor IP assignment: contractor work not assigned. Disputes about ownership emerge.

Generic templates without proper execution: signed but not properly witnessed or executed.

Not collecting on departure: departing employee's IP creation up to last day should be confirmed assigned.

The diligence reality:

Investor diligence routinely checks: every employee has signed PIIA; every contractor has signed CIIAA; founders assigned pre-incorporation work.

Missing IP assignments are common cleanup items at Series A diligence and especially at M&A diligence.

Cleanup is possible but expensive: getting departed employees to sign retroactive assignments is hard.

Ryan's Take

IP assignment is one of those legal hygiene items that's cheap to do right and expensive to clean up. The discipline: every employee signs PIIA at hire (before starting work). Every contractor signs CIIAA before engagement begins. Founders sign IP assignment at formation covering pre-incorporation work. Use standard templates from corporate counsel; don't try to draft these yourself. The hour of process at hiring prevents weeks of diligence cleanup later.

What founders get wrong: Skipping IP assignment paperwork for early hires or contractors, then discovering missing assignments during fundraise diligence. The right discipline: every employee and contractor signs IP assignment before starting work; founders assign at formation.

Related: [Work for Hire] · [Non-Compete Agreement] · [Employment Agreement] · [NDA] · [Trade Secret]

FAQ

What is IP assignment? The contractual transfer of intellectual property ownership from individuals (founders, employees, contractors) to the company. Typically executed through Proprietary Information and Inventions Agreements (PIIAs) for employees and Confidential Information and Invention Assignment Agreements (CIIAAs) for contractors.

Why is IP assignment important? Because the default rule in most jurisdictions is that IP belongs to the individual creator unless explicitly transferred. Missing IP assignments mean the company doesn't legally own IP it depends on, which breaks fundraising diligence and creates major disputes later.

Who needs to sign IP assignments? Every employee (PIIA at hire), every contractor (CIIAA before engagement), and founders (at company formation, covering pre-incorporation work). All before work begins. Cleanup of missing assignments after the fact is difficult and expensive.