AI Created It—But Do You Own It? IP Issues Explained

As artificial intelligence (AI) technologies increasingly generate content, designs, code, inventions, and even music, businesses face a pressing legal question: who owns the output when a machine creates it?

The legal landscape governing AI-generated intellectual property (IP) is still evolving—and while AI offers enormous efficiencies, it also presents novel risks for companies that fail to secure ownership rights, manage licensing, or anticipate infringement exposure.

The Legal Gray Zone: AI and Copyright Law

Under current U.S. law, the Copyright Office has made its position clear: works created without human authorship are not copyrightable. In 2022, the Office rejected an attempt to register art created by the AI system “Creativity Machine” (Zarya of the Dawn) as a copyrightable work. Even though the AI was prompted by a human, the Office found that the human’s role did not rise to the level of creative authorship required under the Copyright Act.

“The nexus between the human mind and creative expression” remains essential for copyright protection. — U.S. Copyright Office, February 2022 Policy Statement

This means that AI-generated text, images, or music might not be protected under copyright unless there is sufficient human contribution. For businesses relying on generative AI tools—like ChatGPT, Midjourney, or other platforms—this can pose significant IP risks.

Patents: Can AI Be an Inventor?

The U.S. Patent and Trademark Office (USPTO) and courts have also weighed in. In Thaler v. Vidal (2022), the Federal Circuit ruled that only natural persons—not AI systems—can be listed as inventors on patent applications.

Other jurisdictions have taken similar stances. The European Patent Office and the United Kingdom’s Intellectual Property Office (UKIPO) have rejected AI-inventorship claims as well.

For businesses using AI to develop new inventions, this raises two key issues:

• Can the invention be patented at all if a human inventor can’t be clearly identified?
• Who owns improvements or ideas generated using AI tools?

The key takeaway—human involvement in the inventive process remains crucial, and businesses must carefully document the human contribution when developing patentable innovations with AI.

Ownership & Licensing of AI Outputs

Another emerging area of risk involves ownership rights to outputs generated using third-party AI tools. Many AI platforms include broad license terms in their Terms of Service. For example, they may include commercial terms granting users rights to use outputs, but with disclaimers on originality or IP protection or may retain rights or impose restrictions depending on the tier of usage (free vs. paid).

Thus, if your business builds a marketing campaign, logo, or software product using AI tools, you may not own it—or worse, others could use the same outputs.

To mitigate risk:

• Review and understand the license agreements of any AI tool you use.
• Develop internal policies requiring disclosure of AI use in content or product creation.
• When in doubt, layer human creativity and editing on top of AI outputs to improve copyright eligibility.

Practical Steps for Businesses

To future-proof your IP in the age of AI, companies should consider:

IP audits: Identify where AI is used in your product development or creative workflows.

Policy updates: Implement internal policies around the use of generative AI, especially for marketing, software, and R&D teams.

Contract clauses: Include representations and warranties in agreements to confirm human authorship and original work.

Patent documentation: Keep detailed records of human involvement in any AI-assisted inventive processes.

Looking Ahead

Laws will continue to evolve. In 2024, Congress held hearings on AI and IP law, and new legislation or USPTO guidance may be on the horizon. Until then, proactive legal strategies are essential.

Don’t assume AI-created content is automatically protected—or that you own it. Take steps now to assess your risks and strengthen your position. If you need to review your company’s AI content policies or IP ownership strategy, consult legal counsel to navigate these evolving issues and ensure your business is protected.

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