15 - Why Intellectual Property Is Missing from Most Service Business Contracts (and Why That’s Costing You Money)
If you run a service-based business, whether you’re a coach, consultant, podcaster, creative, or wellness founder, your most valuable assets probably aren’t physical.
They live in your ideas, content, systems, and brand.
Yet, when I review contracts for service-based businesses, intellectual property (IP) protection is one of the most common things I see missing, unclear, or left unprotected. Not because business owners are careless, but because most were never taught to look for it.
Since taking Property Law in my first year of law school, I’ve been fascinated by intellectual property (IP) and the idea that we can create “property” out of thin air, using our minds (and, sometimes, a few other helpful tools). The intellectual property legal frameworks we know today (trademark, copyright, patents),were developed centuries ago to support trade, innovation, and enterprise, allowing businesses to not only protect their ideas but also profit from them in meaningful, sustainable ways.
One of my core beliefs is that a little legal knowledge can go a long way in helping you protect and power your business, and this is especially true when it comes to IP. For service-based businesses in particular, identifying, protecting, claiming, and monetizing your intellectual property can have a significant impact on both your financial well-being and the long-term legacy you’re building.
The IP Gaps I See All the Time
In service businesses, IP issues rarely show up as dramatic disputes at first. They show up quietly, inside contracts that were meant to “just get things moving.”
Some of the most common issues I see include:
Contractor agreements with no IP assignment
Client contracts that unintentionally transfer ownership
Collaborations with no clarity on who can reuse what
Business owners assuming that paying for work means owning it
The result is a business that has created real value, but can’t confidently protect, reuse, license, or monetize it.
Why I’m Such a Strong Advocate for Identifying IP Early
You don’t need to be a large company to think about intellectual property. You just need to recognize that your ideas and systems are part of your business value.
When business owners take the time to identify their IP:
Contracts get clearer
Collaborations get safer
Scaling becomes possible
Monetization becomes intentional
IP isn’t about being overly cautious or “corporate.”It’s about control.
If you can’t clearly identify what your business owns, it becomes very difficult to grow beyond one-to-one services or build assets that outlive your direct involvement.
Contracts Are Where IP Problems Show Up First
For service-based businesses, contracts are usually the first, and most important, line of IP protection.
This includes:
Independent contractor agreements
Client service agreements
Collaboration or partnership agreements
A well-drafted contract should clearly:
Distinguish ownership from permission to use
Protect your pre-existing IP
Address who owns new IP created during the relationship
One of the most important concepts to understand is this:
Access does not equal ownership.
Clients usually receive a license to use your materials.
Contractors should clearly assign IP to your business.
If the contract doesn’t say that explicitly, ownership may default in ways you don’t expect.
IP Is Also How Businesses Make Money
IP isn’t just about avoiding problems, it’s also about unlocking revenue.
I recently saw a great example online: a puzzle maker who licenses artwork from an independent artist and pays $10,000 in royalties for the right to use that work.
No confusion.
No disputes.
Just clear ownership, clear permission, and fair compensation.
That’s what intentional IP strategy looks like.
When IP isn’t clear, businesses miss out on licensing opportunities, partnerships, and scalable revenue, or end up renegotiating under pressure after money is already on the table.
A Quick Note on IP and AI Tools
Many service business owners are using AI tools like ChatGPT, and that’s not a bad thing.
The key thing to know is that works generated entirely by AI may not be protectable under copyright law, because copyright generally requires human authorship.
This is a fast-evolving area, and I’ll be hosting a dedicated workshop on IP and AI in the near future. Stay tuned!
Ready to Get Clear on Your IP?
If this post made you realize that your contracts might not fully reflect what you’ve built, that’s exactly why I created The IP Audit: Protecting and Monetizing Your Ideas.
In the workshop replay, I share insights on:
How to identify the IP you already have
Where IP most commonly goes missing in contracts
How to begin claiming and safeguarding your ideas, content, and systems
How protected IP supports monetization and growth
This is practical, founder-focused guidance.
Check out The IP Audit Workshop Replay and to learn how to turn the IP you’ve already built into protected business assets. Or grab my Workshop Pass to get access year-round to The IP Audit and more workshops with legal insights.
About the Author:
Mari Gutierrez is the founder of Encino Law, where she supports women and small business owners through thoughtful contract drafting and ongoing legal counsel. She believes the best legal work empowers business owners to make smart decisions with confidence, knowing they have trusted counsel in their corner as they grow and evolve.
