Intellectual Property Considerations

The development and use of AI systems can raise a host of intellectual property issues, including questions around protecting AI innovations, ownership of AI-generated IP, and potential infringement risks.

Protecting AI Innovations

There are several forms of IP protection potentially available for AI systems and related technologies:

• Patents: Certain AI innovations may be eligible for utility patent protection. The USPTO recognizes AI as a distinct category in its patent classification system and has examining units dedicated to AI applications. To be patentable, AI inventions must clear the subject matter eligibility hurdle under Section 101 of the Patent Act. Abstract ideas (like mathematical algorithms) are excluded from patent eligibility, so AI patent claims must be carefully drafted to emphasize technical improvements and practical applications. Disclosure requirements also pose challenges given the “black box” nature of many AI systems.

• Copyright: Copyright can protect the original expression in AI source code and some visual/audio elements of AI-generated output. However, copyright does not extend to the functionality of the code itself. Copyright infringement also requires actual copying, which may be difficult to prove. Fair use defenses may apply to certain AI uses of copyrighted training data.

• Trade Secrets: Trade secret law can provide strong protection for AI source code, algorithms, and training datasets, as long as the owner takes reasonable steps to maintain secrecy. Trade secrets are protected under federal and state law and can last indefinitely. However, independent discovery is a defense to misappropriation.

Ownership of AI-Generated IP

AI systems are increasingly capable of generating inventions, creative works, and other innovations that would be protectable by IP law if created by humans. This raises challenging questions around ownership of the resulting IP.

• AI-Generated Patents: Only individual human inventors can be named on a patent under current US law. The Federal Circuit and USPTO have confirmed that AI cannot be an inventor. Where AI contributes to an invention, there must be sufficient human inventive contribution to support a patent.

• AI-Generated Copyrights: Similarly, only human authors can secure copyright protection. Courts have held that non-human creators like animals cannot be copyright owners. In 2023, the Copyright Office issued guidance confirming that AI-generated material may be copyrightable only if it reflects sufficient human creative input or modification.

• Licensing Considerations: When licensing AI systems, it’s critical to clearly delineate ownership of any IP generated by the AI. The developer and the user may need to negotiate allocation of ownership and licensing rights.

AI and IP Infringement

The use of AI systems can also potentially give rise to IP infringement liability.

• Patent Infringement: Patent infringement involving AI may raise challenging divided infringement questions, where multiple parties (potentially including the AI system itself) are involved in practicing the patented invention. Companies using or developing AI should consider seeking freedom-to-operate opinions and including indemnification provisions in license agreements.

• Copyright Infringement: Training AI systems on copyrighted datasets could potentially infringe the reproduction or derivative works rights, although fair use arguments may apply. Several ongoing cases are testing these theories.