AI and Copyright Law: Who Owns AI-Generated Content?

AI and Copyright: What Creatives and Businesses Need to KnowArtificial intelligence tools are now part of everyday creative work. Designers use them for mockups, copywriters for drafts, and marketers for campaigns. The law has not kept pace. The key question is: if AI makes the work, who owns it? And if someone feeds your original work into an LLM who owns that output? Counsel Club’s Content Creator and Master Services Agreement templates already include AI protections to help creators ensure that their IP is protected.

The Current Rule

U.S. copyright law protects works created by humans. Purely AI generated outputs, with no meaningful human input, cannot be copyrighted. Courts and the Copyright Office have confirmed this, most recently in the 2025 case Thaler v. Perlmutter.

Where Human Authorship Matters

If you contribute creatively—by editing, arranging, or combining AI material—those human contributions may be protected. In the case of the graphic novel Zarya of the Dawn, the text and story arrangement were copyrightable, but the Midjourney images were not. The Copyright Office explained that the Midjourney images were produced by an algorithm responding to text prompts, with no predictable or controlled human authorship. Because the outputs were generated autonomously by the system, the images lacked the “original human expression” required for copyright protection.

The Risk for Businesses

he real risk with AI generated content is uncertainty over ownership. If your work relies heavily on AI, it may be unclear who, if anyone, holds the rights. That creates challenges when clients expect exclusive use of a deliverable or when you want to license content confidently. There is also a second layer of risk: if your images or work product are used as training material for large language models, others may generate outputs that incorporate elements of your work without attribution. In that world, your creative contributions could be replicated and redistributed with little legal protection, leaving your brand exposed.

International Differences

Not all countries follow the U.S. rule. The United Kingdom and Ireland recognize some computer generated works. China has granted protection in certain AI cases. Businesses working across borders should not assume a single approach which adds further complexity to the landscape.

Practical Steps

Contracts are the most reliable way to allocate rights and manage expectations until the law changes more broadly. Spell out how AI can be used, clarify who owns the final work, and address exclusivity directly. Include forward looking language to cover changes in the law and consider adding the Counsel Club prohibition from clients feeding your work into LLMs without your consent.

Final Word

AI has expanded the creative toolkit but has not rewritten copyright law. Businesses and creators should use strong agreements to keep rights clear. All Counsel Club agreements for creative entrepreneurs and service providers include AI specific language. Explore our contract templates here to protect your rights today and prepare for tomorrow.