Intellectual Property Clause template clause

    Updated: 23 March 2026

    Please note: these example clauses are intended as a starting point, not as legal advice. Always adapt the text to your specific situation and have important contracts reviewed by a legal professional.

    Clause text

    Article [X] - Intellectual Property

    1. All Intellectual Property Rights in materials created by [Supplier] specifically for [Buyer] under this Agreement ("New IP") shall, upon full payment of the agreed fees, be assigned to [Buyer], which assignment [Buyer] hereby accepts in advance. To the extent that an additional deed or instrument is required to effect such assignment, this Agreement shall serve as such. [Supplier] shall execute all further documents and do all things reasonably necessary to give effect to such assignment.

    2. Intellectual Property Rights that existed before the commencement of this Agreement or that [Supplier] develops independently of this Agreement ("Pre-Existing IP") shall remain the property of [Supplier]. To the extent that Pre-Existing IP is incorporated in or necessary for the use of the deliverables, [Supplier] grants [Buyer] a non-exclusive, perpetual, worldwide, royalty-free licence to use such Pre-Existing IP for the purpose for which it was delivered.

    3. [Supplier] warrants that the deliverables do not infringe any Intellectual Property Rights of any third party and shall indemnify [Buyer] against all claims, damages, costs, and expenses arising from any alleged infringement, provided that [Buyer]:
    (a) notifies [Supplier] promptly in writing of any such claim;
    (b) grants [Supplier] sole conduct of the defence and any settlement negotiations;
    (c) provides [Supplier] with all reasonable assistance.

    4. The indemnity in paragraph 3 shall not apply to the extent that the alleged infringement arises from:
    (a) modifications made by [Buyer] without [Supplier's] approval;
    (b) the combination of the deliverables with third-party products or services not approved in writing;
    (c) specifications mandated by [Buyer].

    5. [Supplier] shall deliver all source files, documentation, and technical specifications relating to the New IP upon completion, to enable [Buyer] to maintain and further develop the deliverables independently.

    What does this clause mean?

    An intellectual property clause determines who owns the work that a supplier creates for you. The distinction between New IP (created specifically for you) and Pre-Existing IP (what the supplier already had) is important: it is not reasonable to claim ownership of libraries, frameworks, or tools that the supplier also uses for other clients.

    The indemnity in paragraph 3 protects you if the deliverables turn out to infringe a third party's rights. The supplier takes on the defence and any costs. Paragraph 4 sets reasonable limits: if you modify the deliverables yourself and that creates the infringement, the responsibility shifts to you.

    According to Weshare (2025), 95% of organisations lack full visibility into their contractual obligations. In practice, this means IP arrangements are often forgotten after signing. When a supplier leaves, the buyer may discover that source files are missing or that the licence for Pre-Existing IP was never properly documented. Paragraph 5 addresses this directly.

    When should you use this clause?

    An IP clause belongs in any contract where a supplier delivers creative, technical, or knowledge-based outputs. This includes software development, graphic design, copywriting, marketing campaigns, product design, and consulting reports.

    The choice between full assignment and a licence depends on your needs. For bespoke software that forms the core of your business operations, full assignment of New IP is standard. For off-the-shelf components or SaaS solutions, a usage licence is usually sufficient. Negotiate this upfront, because renegotiating IP rights after delivery is considerably more expensive.

    Ironclad (2025) reports that 92% of contract management errors are human errors. An ambiguous IP clause increases the risk that parties only discover who holds which rights when a dispute arises.

    Customize these elements

    • 1For pure bespoke commissions, use full assignment (paragraph 1). For projects with reusable components, limit assignment to the bespoke work and grant a licence for the rest
    • 2Specify whether the Pre-Existing IP licence is sub-licensable if you plan to have third parties further develop the deliverables
    • 3Add a source code escrow arrangement if the supplier manages the Pre-Existing IP and business continuity is critical
    • 4Confirm that assignment takes effect only upon full payment, as this protects the supplier against payment default
    • 5Bear in mind that moral rights (such as the right to attribution and the right to object to derogatory treatment) remain with the creator under Dutch copyright law (Art. 25 Auteurswet) and cannot be fully transferred. Agree whether attribution is required and whether the buyer may modify the work.

    Sources

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