Protecting Your IP When Working with Independent ContractorsOctober 22, 2026

OVERVIEW

Intellectual property (“IP”) can have high value to individuals and businesses.  IP ownership is usually clear and automatic if an individual or business owner is the only person to conceive and reduce to practice a patentable idea, brand name or logo, or copyrightable work.  The default is that a single individual inventor or author, as the sole “creator” of the IP, owns the IP.  IP ownership is also fairly clear and automatic if a full-time employee creates IP in the scope of the employee’s work for the employer.  The law tends to automatically vest title in the employer, or in the alternative, the employer can utilize employee handbooks or agreements to ensure ownership with the employer.

However, if an individual or business involves non-employees or other businesses in a project, IP ownership can be less clear; sometimes the law sides with those other persons having at least joint ownership, and sometimes full ownership, of IP they create.  Examples include when an individual collaborates with friends, or a company hires an independent contractor.  Without complete ownership, you not only may not be able to control the IP (e.g., sue others for copying it, sell it, license it), you may not even have the right to use it yourself!  Thus, the risks can be high.

The contentious litigation between a famous New Orleans bakery and the graphic design services company it hired to refresh the restaurant’s branding and website illustrates these risks.  It also provides lessons in how to avoid such conflicts.  A clear written agreement establishing IP ownership made with the services company before it began any work for the restaurant could have done so.

THE CASE OF DONG PHUONG RESTAURANT & BAKERY

Background.  Dong Phuong Restaurant & Bakery (“Dong Phuong”), a James Beard Award winner, opened in New Orleans in 1988.  Dong Phuong developed a very distinctive branding of its business, as well as the boxes, menus, marketing items, and packaging of its products, including graphical renderings of New Orleans’ historical iron work architecture and a distinctive Vietnamese calligraphic font style. 

Over time, it became famous, including for what is called a “king cake”; a soft, brioche-style dough usually decorated with icing or colored sugar in the Mardi Gras purple, green, and gold colors, and often oval or circular in shape symbolizing a crown.  Boxed king cakes were delivered not only all over New Orleans, but shipped throughout the country, especially as gifts during holidays.

In 2017, Dong Phuong hired a local graphic design and website developer service, Gemini Society, LLC, (“Gemini”), to both update the restaurant’s marketing and branding, as well as to operate and maintain its website.  This included a new king cake box design.  Between 2017 and 2021, Dong Phuong paid Gemini around $300,000 for those services.

The dispute.  In mid-2017, Dong Phuong decided to go a different direction from Gemini, and sent a notice of termination of their services.  Gemini’s response, entitled “Notice to Discontinue Use of IP”, shocked Dong Phuong. 

Gemini’s notice claimed (i) it owned “Brand Logomarks & Logoscripts, Brand & Product Naming, Packaging & Brand Colors, Brand Copy & Positioning, Brand Artwork & Characters” it had created; (ii) Dong Phuong’s use was only with permission of Gemini; (iii) termination of Gemini’s services terminated Dong Phuong’s permission to use that IP; and (iv) Dong Phuong must stop using it.  It got worse.  Gemini disabled Dong Phuong’s website, which immediately stopped Dong Phuong’s valuable and substantial on-line sales.

Dong Phuong’s position was that hiring and paying hundreds of thousands of dollars to a for-hire service like Gemini’s automatically vested IP ownership in Dong Phuong.  As such, Dong Phuong argued it could continue to use everything Gemini had created, even if the website operation and maintenance services were terminated.

Neither party would back down.  Thus, the dispute ended up in litigation in Dong Phuong Bakery, Inc. v. Gemini Society, LLC, No. 2:21‑cv‑01109 (E.D. La. 2021).  Dong Phuong was so outraged that it filed the relatively rare “declaratory judgment” type of action in Federal Court in New Orleans, asking the court to enter an order declaring Dong Phuong was the owner of the contested IP and had the right to use it. 

The Result.  The parties litigated their dispute for almost two years.  They reached a settlement in 2023.  Gemini conceded that Dong Phuong owned and could continue to use its original trademarks.  Dong Phuong conceded Gemini owned and could control who can use copyrights in the new artwork and packaging designs Gemini created.

As a result, Dong Phuong owned, controlled, and continued to use its original brand names, but agreed to discontinue use of any of the Gemini work.  The parties likely spent tens of thousands, if not six-figures, in this fight.  And the disruption to both businesses was substantial.

LESSON #1: IP OWNERSHIP IS NOT AUTOMATIC WHEN HIRING INDEPENDENT CONTRACTORS

It is not unreasonable to assume that a business that hires an independent contractor to provide services, and pays for those services, should own the IP that emerges.  Like Dong Phuong, the argument is that you should own what you pay for.  However, as summarized below, that is not necessarily the case; different forms of IP have different rules.

Trademarks

Many times, individuals or businesses (as with Dong Phuong) hire independent contractors (like Gemini) to assist in updating historical branding or developing new marketing and operational branding related to products, services, or websites.  Such hired work can involve trademark rights.  For example, highly artistic product packaging can involve trademark IP called “trade dress”.  And there can be an overlap of both trademark and copyright protections.

As a general rule, IP ownership of trademark rights vests in the entity that actual uses the trademark(s) on products or services in the public marketplace.  Thus, the original underlying trademarks developed solely by Dong Phuong would be owned by Dong Phuong.  However, Dong Phuong’s ownership of trade dress rights solely created by Gemini is less certain when refreshed branding involves highly distinctive elements such as artwork, logos, or designs, as occurred in the Dong Phuong case. 

Thus, even a paid, hired contractor can argue ownership of trademark rights for works they create for the party that engages them.  The risk to the hiring party is the risk Dong Phuong faced.  If a dispute arises, the hired party could take away permission of the hiring party to use the work(s) the hiring party paid for. 

Copyrights

There is even more uncertainty with copyrights.  To the surprise of many, if copyrightable content is created solely by a hired independent contractor (or its employees), absent a written agreement to the contrary, the default under the law is that the independent contractor owns the copyrights.  Ownership vests in the creator, the “author”; not the hiring party, the funder, or the institution.

The risk, again, is the risk Dong Phuong faced.  If a dispute arises, the hired party could take away permission of the hiring party to use the copyrighted content, even though the hiring party paid for its development.

There are public policy reasons for this rule.  One is based in the U.S. Constitution.  Article I, Section 8, Clause 8 grants Congress the power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”  This was a specific recognition that the individuals that created the innovations should be the original owners, not the government and not a company that hires them.  Also, when writing the most recent version of the Copyright Statute, Congress noted that authors are frequently in a weak bargaining position with those that hire them.  For example, large publishing houses, music producers, or movie studios can have substantial leverage regarding the terms favorable to them, particularly relative to struggling authors, musicians, or actors.  The default put into the Copyright Statute was ownership vested in the creator absent a written agreementto the contrary before work on the copyrightable book, song, or movie started.

The Copyright Statute did include an important exception to the default rule on ownership of copyrights that favors businesses.  If the creators are full-time employees (e.g., gets a W-2 form), the law automatically vests copyright ownership in the employer.  For example, if Dong Phuong had used in-house full-time employees to create its new artwork, Dong Phuong would have automatically owned copyrights in it.  This is one branch of the “work for hire” doctrine under copyright law.  The second branch of “work for hire” can result in a hiring party owning copyrights created by an independent contractor it hires.  But it has two substantial limitations.  First, it can only be invoked if a “work for hire” written agreement is signed with the contractor before any work is started by the contractor.  Second, it only works if the type of copyrighted work falls into one of nine specific categories (e.g., contribution to a collective work, audiovisual work, translation, supplementary work, compilation, instructional text, test, test answers, or atlas).  The Gemini artwork (pure graphic designs) likely would not qualify.

Patents

Although patentable inventions (e.g., novel functions of machines, products, chemicals, and processes) was not a part of the Dong Phuong/Gemini dispute, similar to copyrights, patent law defaults to IP ownership going to the creator (the “inventor”) of patentable ideas.  Thus, to the surprise of many, if patentable inventions are created solely by the hired independent contractor (or its employees), absent a written agreement to the contrary, the independent contractor may own the IP. 

Thus, even a paid, hired contractor has a claim of ownership of patent rights for innovations they invent for the party that engages them.  The public policy reasons, as with copyrights, is founded in the U.S. Constitution.

One important exception relates to IP ownership of patentable inventions by full-time employees that favors businesses.  Like copyright law, most patent law holds that the employer automatically owns any full-time employee patentable ideas that emerge from either (a) an employee hired to invent for the company or (b) specifically assigned to the project that produces IP.

The first lesson of the Dong Phuong case is that just because you pay for services from an independent contractor, IP ownership of what they create for you is not automatically yours.

LESSON #2: A CLEAR WRITTEN AGREEMENT BEFORE ANY WORK BY THE INDEPENDENT CONTRACTOR STARTS CAN ELIMINATE IP OWNERSHIP DISPUTES

IP ownership issues can be avoided with a written agreement made before an independent contractor commences work for a client. Such an agreement would supersede the uncertainty and varying default rules under the law by contractual agreement between the parties.

Dong Phuong Bakery and Gemini Society did have a services agreement before Gemini began its work for Dong Phuong.  We were not able to find the specific agreement, but the Court handling the litigation indicated it had language not only supporting Gemini’s claim of ownership of the artwork it created, but also that Dong Phuong could only use it only under permission (“license”) of Gemini.  The Court indicated the services agreement also had specific clauses that Gemini could demand Dong Phuong stop use of the artwork and return or destroy any artwork on hand if Gemini retracted the license. The services agreement also likely had detailed business terms not involving IP. Examples likely were tasks, pricing, and obligations of Gemini regarding operating and maintaining the Dong Phuong website.  This may have been the vast majority of language in that services agreement.  The IP terms may have been but a few sentences or paragraphs.

Thus, the second lesson from the Dong Phuong case is a clear written agreement covering IP ownership is preferrable to try to avoid disputes later.  But this begs the question.  Such parties can have clearly differing interests or goals regarding IP ownership.  And the parties must come to a “meeting of the minds” as to who is to own what.  This can present significant challenges in negotiating such an agreement.

For example, Gemini may not have agreed to work for Dong Phuong if Dong Phuong had demanded complete IP ownership of everything Gemini would create for Dong Phuong.  And Dong Phuong likely would not have engaged Gemini if it had fully understood Gemini’s position on IP ownership based on the agreement the parties did make.

Thus, this lesson includes the reality that dealing with IP ownership prior to engagement of an independent contractor may involve substantial negotiation.  However, it is usually best to resolve such issues prior to engagement than risk disputes later.  The Dong Phuong case illustrates the risk of not only spending time and resources on litigating the dispute, but the risk of ultimately not being able to use IP you thought you had purchased. 

This highlights the importance of making sure agreements with others have IP terms that meet your goals before signing.  Do not assume an agreement does or is fair to your interests.   Business terms may dominate, but overlooking or assuming IP terms are favorable can lead to the surprises and results of the type Dong Phuong faced.  

BEST PRACTICES OF IP OWNERSHIP IN AGREEMENTS

Whether you are an individual or company engaging an independent contractor, or the reverse, below are some best practices suggestions for IP agreements involving a hiring party and an independent contractor party:

• Obtain clear written agreement with the other party with language on IP ownership that meets your goals.
• Have the agreement signed before any work is done.
• Cover all forms of IP with language appropriate for each type of IP involved.
• Consider including clauses that:
  • Establish a valid contract under the appropriate state law where the contract is formed (offer, consideration, acceptance).
  • The other party will not file for any IP protection on any IP you own.
  • The other party will not contest your ownership or validity of any IP that your own.
  • The other party will sign further written documents if requested by you to perfect your IP ownership.
  • The other party will cooperate with evidence or testimony if requested by you to help shore up your IP ownership.
• Keep copies of the signed agreements in a safe and secure place.  Originals are best in court. 

Mark D. Hansing is an attorney at McKee, Voorhees & Sease. For additional information, please visit www.ipmvs.com or contact Mark directly via email at mark.hansing@ipmvs.com.