AI and IP: What Corporate Leaders Need to Know

By Jason Mudd and Cory Fisher

Artificial intelligence is no longer a futuristic concept—it is a present-day business tool transforming industries. From drafting marketing content to accelerating research and development, AI is reshaping the way companies operate and innovate. However, adoption of AI also raises critical questions about intellectual property rights. Business leaders must understand the legal implications surrounding patents, copyrights, and the need for internal AI corporate policies to safeguard proprietary assets and mitigate legal risks. 

Patent Implications: Who Can Innovate and Who Owns the Innovation? Patents protect innovations and grant inventors exclusive rights to their inventions. But when AI contributes to an invention—whether by generating novel ideas or optimizing human-conceived designs—it raises important questions about what qualifies for a patent and who qualifies as the inventor. Under current U.S. law, only humans can be recognized as inventors. Thus, patent protection cannot be obtained for inventions that are wholly developed by AI. Moreover, if AI plays a key role in the invention process, a human must make a “significant contribution” to be named as the inventor and for the invention to qualify for patent protection.

These legal constraints carry strategic implications for businesses:

  • Human Oversight is Essential: Employees using AI in R&D must remain actively involved and understand that passive reliance on AI could jeopardize patent eligibility.
  • Invention Disclosure Protocols Must Evolve: Internal forms and review processes should be updated to capture any role of AI in the inventive process and demonstrate sufficient human contribution.
  • Global Considerations: Patent eligibility involving AI varies internationally and continues to evolve. Multinational companies need to tailor patent strategies to reflect these differences.

Finally, companies that develop improvements in the functioning of AI systems themselves should also remember that they can seek patent protection, provided those inventions go beyond simply replicating human tasks using AI.

Copyright Challenges: Authorship in the Age of AI. Copyright law is facing similar dilemmas in the new AI age. AI-generated content, such as text, images, music, and source code, is now widespread. However, as with patents, current U.S. law extends copyright protection only to works created by human authors. The U.S. Copyright Office reaffirmed in 2023 that purely AI-generated works are not eligible for copyright protection. Content generated by AI tools like ChatGPT or other generative AI platforms may fall into the public domain unless meaningful human authorship is involved. In addition, generative AI tools, at times, may be trained on copyrighted materials, which can create potential infringement risks if the outputs closely resemble protected works. 

Key copyright takeaways for business leaders include:

  • Human Involvement Adds Protection: Teams using AI should revise, curate, or integrate AI outputs into broader human-created works to create human authorship eligible for copyright protection.
  • Avoid Assumptions of Ownership: Just because your company uses AI to create content does not mean you own it or that it’s protected.
  • Third-Party AI Tools Come With License Risks: Using generative AI platforms often involves accepting terms of service that may limit your rights or expose you to liability, particularly if the AI was trained on copyrighted materials.

Leaders must approach AI-generated content with caution, ensuring both legal compliance and content integrity.

  • The Case for a Corporate AI Policy. Given the complex and evolving legal and technological landscape, having a robust corporate AI policy is no longer merely advisable—it is essential. A corporate AI policy should address at least the following:
  • Usage Guidelines: Define approved uses of AI across departments, including use of generative AI in content creation, software development, marketing, and data analytics.
  • IP Ownership Protocols: Clarify ownership of AI-assisted outputs and establish documentation practices for human contributions.
  • Risk Management: Identify and mitigate legal risks, such as copyright infringement or inadvertent disclosure of confidential information via public AI models.
  • Vendor and Tool Vetting: Require legal and technical compliance review before onboarding new AI tools or platforms.
  • Training and Oversight: Educate staff on the legal implications of AI use and establish supervisory protocols to ensure responsible and compliant use.
  • Final Thoughts

AI presents incredible opportunities but also substantial IP risks and challenges. As corporate leaders deploy AI, they must safeguard proprietary innovations and content, and ensure they are not inadvertently forfeiting rights to their IP. Maintaining a competitive edge means more than just using the latest tools; it means understanding the legal frameworks that govern them. By proactively addressing patent and copyright issues and implementing thoughtful internal policies, businesses can harness the power of AI without compromising their most valuable assets.