Answer: the contractor.
Let me say that again:- "THE CONTRACTOR!"
Lots of businesses will appoint contractors for the provision of software development, website design, copy writing or other artistic output but this issue also needs to be considered for interim business managers who may be creating say, a business network for the company or developing know-how for the business or doing complex research.
There are nuances and subtleties but the essential point is, even though you paid for the contractor to do the work, on your time and using your resources, based on your ideas; by default, the contractor owns the intellectual property. This comes as a real shock to most business owners and managers. It is easily addressed in a written contract by some simple clauses that transfer (lawyers say "assign") the intellectual property and/or agree detailed ways that the IP can be used now and in the future.
To put this in context, let me give you a couple of real world examples.
We were asked to advise a start-up tech organisation who had commissioned a basic technical prototype from an IT contractor was trying to finalise an offer for funding. With no written IP transfer agreement in place, the IT contractor was able to hold the fund raise hostage. The funders demanded the start-up own the prototype before releasing the funds, but the start-up only had the implied licence and had to pay further sums to the IT contractor in order to secure full ownership.
To show this even more how much this may seem inequitable, but is practically, applied, we also were engaged to advise a bar owner who had appointed a mural artist to paint a beautiful mural in the bar. The mural became synonymous with the bar and the bar owner wanted to reproduce the mural on menus and promotional materials but was upset when the artist asked for more money for this extended use. There was no written contract in place (beyond an invoice) so I had to advise that the artist was able to refuse permission to the wider use of the mural painting without an additional payment because the implied licence would be limited to the "use" of the art on the wall and no more.
The contractor pitfall
Lots of businesses will appoint contractors for the provision of software development, website design, copy writing or other artistic output but this issue also needs to be considered for interim business managers who may be creating say, a business network for the company or developing know-how for the business or doing complex research. Sometimes, the IP-creating activities won't be a core activity for the business so an outside contractor is appointed for a short project and other times, a contractor is filling a short term skills gap or offering a valuable service that isn't available in-house. In all these scenarios, it is important to ensure that there is a written agreement in place that properly transfers ownership of IP to the appointing company. Otherwise a licence will be implied into the agreement in order to make the agreement function, but the licence will only be as wide as necessary to enable the agreement. A licence is not the same as ownership and may be limited to a narrow use and not necessarily allow sub-licencing to customers or other third parties. This causes inflexibility and can be highly damaging for creative, technology and engineering companies.
As shown above, another potential problem arises if the owners of the business wish to sell or raise finance. The new owner or funder will value the business less if the IP ownership is not clear-cut or subject to ongoing fees to third parties.
To be clear: a verbal agreement is insufficient. An assignment of IP must be in writing.
And bringing things right up to date, please see my colleague Raoul's article on the issues of IP ownership when AI is involved.
We can help with preparing standard clauses and documents for appointing contractors that will deal with transfer and/or other rights in IP.