Artificial Intelligence (AI) has quickly transformed from a specialized technology to a common tool that entrepreneurs employ to gain a competitive edge, grow more effectively, and develop more quickly. AI is transforming how entrepreneurs work, from writing code and producing marketing materials to refining product designs and evaluating data, but it’s also posing difficult legal issues.
As a startup lawyer, we often hear questions like:
“Can we patent something our AI helped create?”
“Who owns the code generated by our AI tools?”
“Is AI output protected under copyright?”
Here’s what every founder should know, straight from the desk of a startup lawyer at Strategy Law.
1. AI Can’t Be Your Co-Inventor (Yet)
Currently, the law does not recognize AI as an inventor or creator, regardless of how intelligent or useful your AI system is. This implies that people have to be identified as creators on copyright filings and inventors on patent applications.
It’s crucial to track and record human interaction even if your AI creates written content, strategy recommendations, or product designs. Your intellectual property rights might not be enforceable elsewhere.
2. Document Human Contributions
Keep thorough records of who controlled the AI, modified its output, or supplied the inputs that influenced the finished product if you’re utilizing AI tools to create code, design products, or write marketing copy.
If you ever find yourself in a legal battle over ownership or originality, a startup lawyer can assist you in creating an internal documentation procedure that records this information.
3. Understand the Licensing Terms of AI Tools
A number of startups use third-party AI solutions like Jasper, GitHub Copilot, ChatGPT, and Midjourney. But watch out: some programs claim partial ownership of your product, and not all tools permit unlimited commercial use.
Have a startup lawyer look over the terms of service of the tools you’re employing before incorporating AI-generated content into a website, investor report, pitch deck, or product. By taking this prompt action, you may avoid subsequent, expensive infringement lawsuits.
4. Consider IP Protection for the AI Itself
Your startup may be protected by patent or trade secret legislation if it is developing a private AI model or algorithm. A startup attorney can assist you:
- Decide whether to patent the system or keep it confidential
- Draft NDAs and employment agreements to protect sensitive data
- Implement internal controls to guard your model weights and training data
Even if you can’t protect the output of your AI, you can often protect the system behind it.
5. Assign IP Clearly—Especially in Teams
Founders frequently work with agencies, freelancers, contractors, and even AI consultants. Ensure that all intellectual property rights, particularly those involving AI support, are assigned to your startup by contracts you have in place.
We recommend adding a clause like this to your contracts:
“All AI-assisted content and inventions created under this agreement shall be the sole property of [Startup Name].”
A startup lawyer can ensure your agreements leave no ambiguity about ownership.
6. Know Your Risks—and Mitigate Them
AI-generated content may be partial, incorrect or legally dangerous, or it may mimic already-published copyrighted content. In the end, what the startup releases onto the market is its responsibility.
Work with legal counsel to:
- Review AI-generated content before publishing
- Run IP clearance checks
- Conduct risk audits if you’re in regulated industries like healthcare, finance, or education
Final Thoughts
While AI presents entrepreneurs with great opportunities, it also introduces new levels of complexity in terms of legal compliance and intellectual property.
Working with an experienced startup lawyer can help you protect your intellectual property, control your risks, and provide a solid legal basis for expansion, regardless of whether you’re developing an AI-powered product or leveraging AI to boost your business.
At Strategy Law, LLP, we help startups protect what they create, no matter how smart the tools behind it are.
Schedule a consultation today to learn how we can help your AI-powered business thrive.
Visit us at www.strategylaw.com or call (408) 478-4100
This blog is written as of August 2025. Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites.
All blogs on this site are for educational purposes only, do not constitute legal advice or opinion, and should not be applied to your situation, or any specific situation, without consultation with counsel. Strategy Law, LLP does not provide any legal advice concerning any matter discussed in a blog except upon formal engagement including, without limitation, execution of Strategy Law, LLP’s formal legal services agreement, and with respect to specific factual situations. No blog constitutes a guaranty, warranty, or prediction regarding the result of any legal matter discussed in the blog or any representation