The rise of generative AI has transformed how startups build, scale, and create—enabling everything from automated marketing copy to AI-generated art, music, and code. But now, the legal landscape is shifting. With lawsuits mounting against OpenAI, Meta, and other AI leaders—most notably by The New York Times, authors’ groups, and media outlets—the question of generative AI copyright is no longer theoretical. It’s a live legal issue that affects every tech startup using AI-generated content, whether directly through OpenAI’s API or indirectly via third-party tools. This blog explores what’s at stake in the ongoing litigation, how copyright law applies to generative AI, and what early-stage tech companies need to do now to protect their products, brands, and investors.
What Is Generative AI Copyright?
Generative AI copyright refers to the legal status and ownership of content produced by artificial intelligence—and whether the use of copyrighted materials to train AI systems is itself lawful.
There are two key questions in play:
- Is it legal to train AI models on copyrighted data scraped from the internet?
- Can AI-generated outputs infringe the copyrights of original creators, even if they’re not identical copies?
These questions are at the heart of ongoing lawsuits against companies like OpenAI and Meta, and the outcomes will shape regulatory frameworks, business models, and startup risk assessments for years to come.
Key Generative AI Copyright Lawsuits (As of 2025)
1. The New York Times v. OpenAI and Microsoft (Filed Dec 2023)
- Allegation: OpenAI and Microsoft used NYT content without permission to train GPT models.
- Claims: Copyright infringement, unfair competition, and damage to subscription and ad revenue models.
- Significance: First major lawsuit by a media outlet directly targeting training data practices.
2. Author Class Actions Against OpenAI
- Multiple authors, including Sarah Silverman and Paul Tremblay, allege that AI models were trained on copyrighted books without consent.
- Outcome pending, but courts are weighing whether this constitutes fair use or systematic copyright violation.
3. Getty Images v. Stability AI (Ongoing)
- Allegations: Stability AI used copyrighted images to train its visual generator without licensing.
- Implications for startups using AI to generate art, designs, and visual content.
Why Tech Startups Must Pay Attention to Generative AI Copyright
Most startups using AI tools don’t train their own models—they license them from platforms like OpenAI, Google, or Anthropic. But that doesn’t eliminate legal exposure.
Here’s why:
- Outputs can still infringe if the AI generates content that is substantially similar to copyrighted works.
- You may violate licensing terms by using outputs commercially without proper rights.
- Investors and acquirers are now asking about generative AI risks in due diligence.
- Clients (especially enterprise customers) may demand legal indemnity if you’re integrating AI into deliverables.
Tech Startups need to treat generative AI copyright issues with the same weight as data privacy or cybersecurity compliance.
Legal Risks for Startups Using Generative AI Copyright
Even if a technology startup doesn’t train its own model, it may be held responsible if it knowingly benefits from infringing practices—a concept known as vicarious liability or contributory infringement.
This is especially risky for startups that:
- Market themselves as “AI-powered”
- Sell outputs as original creative work
- Build commercial products using pre-trained models
AI may generate content that closely resembles an existing song, article, or image—sometimes unknowingly. If a startup publishes or commercializes that content, it could be liable under U.S. copyright law.
The legal standard is substantial similarity, not identical copying. Courts may consider whether the AI-generated content “borrows the expressive elements” of a protected work.
Startups using generative AI to provide services to others (e.g., marketing copy, code snippets, or design assets) may unknowingly breach warranties in client contracts, including:
- Ownership guarantees
- Non-infringement representations
- Indemnity obligations
Best Practices to Reduce Risk When Using Generative AI Copyright
Startups should take proactive steps to navigate the evolving legal landscape of education technology law and AI-generated content.
Ensure you understand whether your AI vendor (e.g., OpenAI, Google, Anthropic) provides:
- Output usage rights
- Commercial licenses
- Indemnity protections or disclaimers of liability
Most platforms do not guarantee non-infringement.
Use caution when using AI to generate:
- Logos, trademarks, or brand identifiers
- Long-form written content intended for publication
- Creative works that closely mimic human artists or writers
If you’re in a creative or publishing space, consider having a human in the loop to vet and edit outputs.
Transparency reduces risk. Consider adding contract language that:
- Discloses the use of generative AI
- Limits liability for unintended outputs
- Clarifies ownership and licensing rights
Before shipping a product or raising capital, engage legal counsel who is an expert on generative AI and copyright law, such as attorney David Nima Sharifi to:
- Evaluate copyright exposure
- Draft proper terms of service and disclaimers
- Review your IP assignments and indemnity clauses
Generative AI Copyright Attorney
The current wave of generative AI copyright lawsuits signals a new era in tech law. For startups, the key is not to fear the technology—but to build responsibly within the legal boundaries as they emerge.
Ignorance of copyright exposure won’t protect you, but proactive legal strategy will.
David Nima Sharifi, Esq., founder of L.A. Tech and Media Law Firm, advises tech startups on AI compliance, intellectual property strategy, and product launch risk mitigation. Recognized among the Top 30 New Media and E-Commerce attorneys by the Los Angeles Business Journal, David brings deep legal expertise to the fast-evolving world of AI, content, and technology law.
Schedule your confidential consultation now by visiting L.A. Tech and Media Law Firm or using our secure contact form.
