University of Cambridge policy is effectively that undergraduate students own the IP rights to their work. Technically the University owns IP in collaborative work, but this is only so that the University can intervene if the students cannot agree what should be done; if the students agree then the University does not assert ownership. Project groups may choose to release the results of their work under an open source license, or even form a company to commercialise the design. They are free to do so. If their design relies on patented algorithms, or source code in which others hold copyright, clients might wish to warn them of this. It would be unwise to divulge commercial secrets to the project group.
If a client believes that the software created by the group could be of value to their company, they are free to discuss fair terms on which it might be licensed. However, students carry out this exercise for course credit, not as a commercial arrangement. More appropriate ways to carry forward results from a project include offering summer employment to one or more members of the team, or proposing a related research exercise that might be the topic of a final year undergraduate project for one of the team, or even a PhD topic. If software written by the rest of the team is required in these circumstances, it should be licensed on fair terms.
Please note that any follow up (other than to make arrangements) with students should be carried out after exams in early June. The students are under considerable pressure at this time of year.
In rare cases, it may be necessary for students to receive sensitive information, for which there is a need for a confidentiality agreement. Where necessary, this can be discussed with the group project organisers.