AI Copyright Protection: What Tech Startups Must Know

This blog explores the current state of AI copyright protection, how the U.S. Copyright Office and federal courts are responding, and what every AI startup should be doing now to ensure their innovation is protected and compliant.

Why Copyright Law Matters to AI Startups

Copyright law is the backbone of intellectual property protection for creative works—everything from source code and datasets to documentation and software interfaces. For AI startups, especially those building or deploying generative AI tools, copyright is a critical tool in asserting ownership over proprietary content and defending against infringement claims.

The challenge? Copyright law was built to protect human-created expression. AI-generated content raises fundamental questions:

• Can a machine be an “author”?
• Who owns the output of a generative model?
• Are training datasets infringing?

The answers are evolving, but U.S. courts and the Copyright Office have already begun shaping the terrain.

What Can Be Protected: Copyright and AI Inputs

For most AI startups, the core asset is the trained model, along with the source code and training data. Here’s how AI copyright protection applies:

• Source Code: Fully protected under existing copyright law, as it is a literary work authored by a human.
• Training Data: If compiled or created in-house, it may qualify for copyright as a compilation. If scraped from third-party sources, copyright infringement risks must be assessed.
• Model Architecture: Functional elements of models (e.g., neural net layers or training techniques) may be more suited for patent protection than copyright.
• Documentation/UI/UX: Visual elements and documentation are copyrightable if sufficiently original.

AI startups should work with experienced AI copyright attorneys to audit their IP portfolio and identify copyright-eligible assets.

What Cannot Be Protected: AI-Generated Content

In Thaler v. Perlmutter, 2023, the U.S. District Court upheld the U.S. Copyright Office’s denial of copyright registration for an image created by an AI system called “Creativity Machine.” The court agreed that copyright law requires human authorship.

This means that outputs generated autonomously by AI models cannot be registered or enforced under U.S. copyright law—at least for now.

However, when AI is used as a tool in a human-directed creative process, the human contributions may be copyrightable. This is a gray area, and the Copyright Office has issued guidance suggesting that works with minimal human intervention do not qualify.

Takeaway for AI startups: Train your teams to document human involvement and creativity when using generative AI tools—particularly in content-heavy industries like marketing, design, and software generation.

Copyright Infringement and AI Training Data

Another legal frontier involves how AI models are trained. Most generative AI tools use massive corpora of text, images, and video scraped from the internet. This has led to class action lawsuits, such as:

• Andersen v. Stability AI, Midjourney, and DeviantArt (N.D. Cal. 2023) – Artists allege that their copyrighted works were used without permission to train text-to-image generators.
• Getty Images v. Stability AI (U.K. 2023) – Getty claims its watermarked stock images were ingested into AI models unlawfully.

Startups that rely on open web scraping must evaluate whether fair use applies. Courts weigh several factors:

1. Purpose and character of the use – Is the use transformative or commercial?
2. Nature of the copyrighted work – Factual works may receive less protection.
3. Amount used – Were full works or snippets ingested?
4. Market impact – Does the AI tool substitute or harm the market for the original?

These cases are ongoing, but the early signal is clear: courts are skeptical of indiscriminate scraping.

Best Practices for AI Copyright Protection

If you’re building or scaling an AI startup, here are five best practices to protect your copyright interests and mitigate infringement risks:

1. Register Your Copyrights
   Always register source code, UI, branding elements, and documentation with the U.S. Copyright Office. Registration is required before filing a lawsuit and establishes a public record of ownership.
2. Vet and Document Your Training Data
   Use data with clear provenance. Consider licensing datasets or creating your own. Maintain records of where and how data was sourced.
3. Limit Output Claims
   Be cautious when claiming ownership over AI-generated outputs. If human contribution is significant, document it to support future copyright claims.
4. Use Copyright Notices Strategically
   While not legally required, adding copyright notices on UIs, code, and documentation reinforces ownership and may deter copying.
5. Work with a Copyright Lawyer
   Copyright in the AI era is complex. Partner with a law firm experienced in both technology and IP to avoid landmines.

Copyright vs. Other IP Protections for AI

While AI copyright protection is critical, startups should also consider:

• Patents: For novel processes or system architectures.
• Trade Secrets: For training data, algorithms, and model weights.
• Trademarks: For brand protection of product names and UIs.

An integrated IP strategy is essential. Copyright is powerful, but not sufficient on its own.

The International Landscape of AI Copyright Protection

U.S. law is just one piece of the puzzle. The EU, U.K., China, and Japan are also developing standards for AI-generated works and training data legality.

For instance, Japan recently announced that AI training on copyrighted data is permitted for non-commercial use under its copyright regime, while the EU AI Act adds transparency requirements for copyrighted content used in training.

If your AI startup is global, you need to consider international copyright issues in product development and expansion strategies.

Protecting AI Innovations

AI copyright protection remains a moving target. As courts weigh new questions of authorship, fair use, and liability, AI startups must take proactive steps to protect their assets and ensure legal compliance.

Copyright may not yet fully accommodate AI-generated content, but it still plays a central role in protecting code, data, interfaces, and branding.

Tech entrepreneurs navigating the future of artificial intelligence need more than great models—they need robust legal infrastructure. Principal Attorney David Nima Sharifi, Esq. has been consulting tech startups on the legal and business affairs of innovation since 2007. From AI copyright protection to training data vetting and IP registration, our firm understands the high-stakes decisions founders must make. Schedule your confidential consultation now by visiting L.A. Tech and Media Law Firm or using our secure contact form.