Written by Keegan Caldwell, PhD

Artificial intelligence is fundamentally challenging centuries of intellectual property law precedent. As AI systems increasingly generate original content, conceptualize new products, and develop branding elements, they’re testing the boundaries of legal frameworks designed exclusively for human creators. This technological shift creates unprecedented questions: Can an AI system be considered an inventor? Should AI-generated works receive copyright protection? How do we prevent the misuse of intellectual property in AI training data?

These questions are already affecting legal decisions and business strategies across industries. As courts grapple with AI-related IP disputes and regulatory bodies refine their approaches, we must navigate complex distinctions between human and machine contributions while ensuring robust protection for legitimate innovation. The stakes are particularly high for businesses investing in AI development, as current legal frameworks may leave their AI-generated assets vulnerable to exploitation.

Copyright Issues

Copyright law has historically required a human author to obtain legal protection. However, with finely tuned prompt engineering, AI systems are now capable of generating music, artwork, literature, and even full-length films—challenging the long-standing legal definitions of creativity and originality. The U.S. Copyright Office and courts have consistently ruled that AI-generated works, without significant human involvement, do not qualify for copyright protection. This reinforces the legal principle that human creativity remains a prerequisite for ownership.

For businesses relying on AI-generated content, this presents a significant challenge. Companies must carefully document all human contributions in AI-assisted projects to be able to secure copyright claims. This includes defining the extent of human input, such as curating datasets, refining AI-generated drafts, or making creative decisions based on AI outputs. Without clear documentation, businesses risk losing exclusive rights to their content, allowing competitors to freely use or modify AI-generated works.

Beyond ownership, AI-generated content raises complex issues around licensing, derivative works, and liability. If an AI model is trained on copyrighted materials without permission, its outputs may inadvertently infringe on existing rights. Courts and policymakers are now debating how to address instances like this, including whether AI-generated works should be subject to fair use principles or require licensing agreements with copyright holders. It’s crucial that companies monitor how their intellectual property is used or repurposed by AI systems.

Patent Law

AI is increasingly involved in scientific discoveries and product innovation. However, U.S. patent law requires a human inventor to be named on a patent application, which means purely AI-generated inventions are not eligible for patent protection. 

For businesses leveraging AI in research and development, this limitation creates both legal and strategic challenges. To secure patent rights, human researchers must be actively involved in the inventive process and demonstrating meaningful contributions. This includes documenting how AI-assisted insights were interpreted, modified, or combined with human expertise to arrive at a patentable innovation.

Another issue is whether AI-assisted inventions meet the legal standards of novelty and non-obviousness. Traditional patent law requires that an invention be sufficiently distinct from existing knowledge and not an obvious improvement. However, AI’s ability to analyze vast datasets and generate optimized solutions may blur these distinctions. If AI can systematically identify the most efficient designs, materials, or formulations, it raises questions about whether its outputs should be considered obvious improvements rather than true innovations. Policymakers and courts are now exploring how to redefine these benchmarks in light of AI’s capabilities.

Trademarks and Branding

Trademarks play an important role in distinguishing brands and building consumer trust. But the rise of AI-generated branding elements, including logos, slogans, and product names, is complicating things. Since trademark protection depends on distinctiveness and consumer association with a brand, the question arises: Can businesses claim exclusive rights over AI-created trademarks if they lack direct human authorship?

Shaping the Future in Tech Hubs

California is a major center for technology and innovation, and the state is actively shaping legal discussions on AI and IP protection. San Francisco alone saw a 48% increase in patents per capita from 2012 to 2022. It’s no secret that California remains a leader in technological innovation, and legal and policy decisions made in the state often influence national and global regulations. 

Lawmakers in California are actively pushing for greater transparency in AI development, recognizing the need to balance innovation with intellectual property protections. For instance, AB-2013 requires AI developers to disclose high-level summaries of the datasets used to train their models by January 1, 2026. This includes identifying data sources, ownership details, and whether the datasets contain copyrighted, trademarked, or patented material. These disclosure rules are meant to hold AI developers accountable and help copyright owners understand if and how their work was used to train AI models.

SB-942, which targets large-scale AI developers boasing over one million monthly users, is another recently introduced bill. This bill mandates that these aforementioned “Covered Providers” offer free transparency tools that enable consumers to detect whether content was created or altered by AI. It also requires AI-generated content to include both visible and hidden markers, ensuring clear identification of AI-generated material. 

Planning Ahead

For companies that want to protect their intellectual property, the time to act is now. The intersection of AI and IP law is not a theoretical challenge—it’s an immediate business imperative. Here are critical actions to consider:

• Implement Robust Documentation Protocols: Move beyond basic record-keeping to establish comprehensive documentation systems that capture the full scope of human contributions in AI-assisted projects. This includes tackling creative decisions, dataset curation choices, and substantial modifications to AI outputs.
• Modernize Your Company’s IP Protection Strategies: Review and update IP portfolios with AI-specific considerations. This includes developing clear policies for AI training data usage, establishing guidelines for AI-assisted innovations, and creating protocols for identifying potentially patentable AI-enhanced inventions. Consider implementing technological solutions to track and verify human contributions to AI-assisted work.
• Monitor Legislative Developments: With states like California leading the way in AI regulation, staying current requires developing a systematic approach to tracking and analyzing new legislation, court decisions, and regulatory guidance.

Though the future of IP protection in the age of AI remains in flux, one thing is clear: organizations that adapt their IP strategies now will be better equipped to maintain their competitive advantages tomorrow. And, as ongoing discussions and legal developments in California continue to shape the future of AI-related IP rights, businesses and creators must remain proactive to ensure they are prepared.

This publication is distributed with the understanding that the author, publisher, and distributor of this publication and/or any linked publication are not rendering legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, assume no liability whatsoever in connection with its use. Pursuant to applicable rules of professional conduct, portions of this publication may constitute Attorney Advertising.

Read the article on Law.com.