This clause says that both you and the other party own any intellectual property (inventions, designs, software code, etc.) created during the contract. Neither party can use or sell the IP without the other's permission—even though you both own it. This matters because in most countries (including the US and UK), the creator automatically owns their work unless a contract says otherwise. Joint ownership creates practical problems: if you want to license your invention to a third party, you need the other owner's consent, and they could refuse or demand payment. This can paralyze your ability to commercialize what you've helped create.
Avoid joint ownership if possible—push for sole ownership by the party that will actually use or commercialize the IP. If joint ownership is unavoidable, negotiate a "buyout" clause that lets either party buy out the other's share at a set price, or a "non-blocking" clause that lets you license your share without permission. Get this in writing before signing. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause says that both you and the other party own any intellectual property (inventions, designs, software code, etc.) created during the contract.
Why should I care about this clause?
Neither party can use or sell the IP without the other's permission—even though you both own it.
What are my options?
This matters because in most countries (including the US and UK), the creator automatically owns their work unless a contract says otherwise.
How does this affect small businesses?
Joint ownership creates practical problems: if you want to license your invention to a third party, you need the other owner's consent, and they could refuse or demand payment.