What is the difference between 'Work Made for Hire' and 'Background IP'?

Work Made for Hire refers to new content created specifically for the client during the contract term. Background IP refers to pre-existing assets, tools, or methodologies you owned before the contract began.

How can I protect my pre-existing work in a contract?

You must include a 'Background IP' or 'Pre-existing Materials' clause that explicitly excludes your prior work from the assignment of rights. Ensure you clearly define or list these materials in an exhibit or schedule.

A TermScore is an AI-generated risk rating from 0 to 100 that evaluates the fairness and risk level of any legal document. A score of 86-100 means the contract is highly favorable, while 0-30 indicates dangerous terms you should walk away from.

What types of documents can TermScore analyze?

TermScore analyzes any legal document including freelance contracts, employment agreements, residential leases, NDAs, brand sponsorship deals, SaaS vendor agreements, and rental applications. Upload PDFs, Word documents, or images.

How much does TermScore cost?

TermScore offers a free plan with 3 scores per month. The Team plan is $15/month for 30 scores, and the Professional plan is $50/month for 500 scores with team collaboration features.

Is my document data secure?

Yes. Documents are processed in memory and analysis results are stored encrypted. TermScore never shares your document data with third parties and you can delete your data at any time from your dashboard.

Can an agency legally demand ownership of work created before the contract started

Can an agency legally demand ownership of work created before the contract started?

No. An agency cannot legally claim ownership of your pre-existing intellectual property unless you explicitly assign those rights in a signed agreement. Pre-existing work is legally distinct from 'work made for hire' and remains your property unless you voluntarily transfer it. Any attempt to claim ownership of your prior work without a specific, bargained-for transfer is unenforceable and legally invalid.

The Legal Distinction: Background IP vs. Work Made for Hire

Understanding the difference between these two concepts is the primary defense against IP theft. Courts generally interpret contracts based on the 'four corners' of the document. If a contract is poorly drafted, it may inadvertently sweep your entire portfolio into the client's ownership.

Work Made for Hire (WMFH)

Under the U.S. Copyright Act, WMFH applies only to works created during the term of employment or under a specific written agreement for commissioned work. It does not retroactively apply to assets created before the effective date of the contract.

Background Intellectual Property (BIP)

BIP includes your proprietary code libraries, design templates, methodologies, and creative assets developed prior to the engagement. You retain full ownership of these unless you sign a document that explicitly assigns them to the agency.

Key takeaway: Always maintain a dated, digital inventory of your pre-existing assets. If a dispute arises, this serves as your primary evidence of prior ownership.

Red Flags in Agency Contracts

Agencies often use broad, boilerplate language to secure maximum IP rights. Watch for these specific phrases that signal an attempt to seize your pre-existing work:

'All work product created by Contractor, whether before or after the Effective Date...': This is a massive red flag that attempts to capture your past work.
'All materials provided to the Agency shall be deemed Work Made for Hire.': This ignores the distinction between new work and existing assets.
'Contractor hereby assigns all right, title, and interest in any and all intellectual property.': This is overly broad and lacks the necessary carve-outs for your background IP.

Clause Type	Risk Level	Legal Implication
Standard WMFH	Low	Only applies to new work created for the client.
Broad Assignment	High	May include all past work provided to the client.
Exclusive Ownership	Critical	Prevents you from using your own tools for other clients.

Action Item: If you see these clauses, strike them out immediately and replace them with a clause that explicitly excludes 'Background IP' from the assignment.

How to Protect Your Pre-existing Work

To ensure your assets remain yours, follow this step-by-step process during contract negotiations:

Define Background IP: Include a specific section in the contract titled 'Background Intellectual Property' that lists your pre-existing tools, code, or designs.
Grant a License, Not Ownership: Instead of assigning ownership of your pre-existing work, grant the agency a 'non-exclusive, perpetual, royalty-free license' to use the work solely for the purpose of the project.
Carve-out Clause: Insert a sentence stating: 'Notwithstanding anything to the contrary, Contractor retains all right, title, and interest in and to any intellectual property created prior to the Effective Date.'

Jurisdictional Nuances

While the U.S. Copyright Act provides a strong framework, local laws can vary. In some jurisdictions, 'moral rights' (the right to be credited for your work) cannot be waived. Always ensure your contract specifies the governing law, as this dictates how courts interpret ambiguous IP clauses. If you are working internationally, be aware that some civil law jurisdictions have stricter protections for creators that cannot be signed away in a standard contract.

Key takeaway: Never sign a contract that lacks a 'Background IP' carve-out. If the agency refuses to include one, they are likely attempting to acquire your proprietary assets for free.

The Role of Automated Analysis

Contract language is often intentionally dense to hide overreaching IP claims. TermScore can automatically analyze your contracts to identify these dangerous clauses, flagging 'Work Made for Hire' language that exceeds the scope of your engagement and suggesting specific, protective language to ensure your pre-existing work remains yours.