AI and Copyright: Guidance for Employee-Owned Businesses and Nonprofits

The development of modern AI systems has raised many questions about copyright law, particularly regarding the massive datasets used to train these models. Most contemporary AI systems, including popular tools like ChatGPT, Claude, and Gemini, were trained on enormous collections of text, images, and other creative works scraped from the internet—much of it protected by copyright. AI firms have defended this practice as “fair use,” which is a legal doctrine that allows limited use of copyrighted material without permission for certain “transformative” uses. 

While precedents like the Google Books case, where Google scanned millions of books without permission from copyright owners, were validated by the court as fair use, the AI firms’ approach has sparked intense debate. Many authors, artists, journalists, and publishers argue that their work was used without permission or compensation to build commercial AI systems that now compete with human creators. 

OpenAI CEO Sam Altman recently gave a TED interview to TED founder Chris Anderson about AI, and in the first five minutes the two discussed the complexities of copyright and AI. The copyright controversy has led to numerous high-profile lawsuits, including cases brought by major news organizations, book publishers, and individual creators against AI companies, alleging wholesale copyright infringement in the training process.

Recently, the U.S. Copyright Office released an important report on Copyright and Artificial Intelligence in three parts (the third part is still a preliminary draft, just released in May 2025). The report sets out to clarify how copyright law applies to AI. 

For employee-owned businesses and nonprofits using or considering generative AI, it helps to answer two critical questions that could impact your organization's legal and creative strategies. (Note: we aren't lawyers, so this isn't legal advice, but we hope to provide context on these important issues.)

The Two Key Copyright Questions

Question 1: Can we own copyright in content we create using AI tools? The answer depends on how much human creativity is involved. The Copyright Office maintains that human authorship is essential for copyright protection. When AI assists human creativity (like advanced editing tools or accessibility features), your copyright protection remains intact. However, content generated purely by AI with minimal human direction cannot be copyrighted. Simply typing prompts into an AI system, even detailed ones, doesn't provide enough creative control to establish copyright ownership, according to the Copyright Office's Part 2 on Copyrightability. The key is maintaining meaningful human involvement in the creative process—from conception through execution.

Question 2: Are we at risk of copyright infringement when using AI systems trained on copyrighted works? Again, the answer depends. Using AI for internal research and analysis carries relatively low risk, while using AI to generate content that competes with original, copyrighted works raises significant concerns. In its preliminary Part 3 report on Generative AI training, the Copyright Office notes that fair use determinations will be made case-by-case, but organizations face potential liability when AI outputs reproduce substantial portions of copyrighted materials. An example of that would be using a generative AI tool like ChatGPT to reproduce and sell content like articles, books, or images that were copyrighted and not licensed by ChatGPT's owner, OpenAI. (The main models typically have some guardrails in place to prevent certain requests that could lead to infringement.)

A series of lawsuits are currently pending that will help clarify the boundaries of copyright as it relates to AI training practices. For businesses and nonprofits, this uncertainty means that while the legal risks of using AI tools may be relatively low, the broader industry is still working through fundamental questions about how copyright law applies to AI. Organizations should stay informed about ongoing legal developments and consider their own risk tolerance when implementing AI tools, particularly for content creation and publication.

What you control, of course, is how you use these tools. If you use them in common ways that don't use or mimic someone else's copyrighted material, then you would likely not be at risk.

Common Questions Answered

Q: Do our AI prompts have copyright protection? A: Possibly, if they're sufficiently creative, but prompts alone don't give you copyright ownership in the AI's output. The Copyright Office was clear that current technology doesn't allow prompts to adequately control the expressive elements that emerge from AI systems.

Q: Should we avoid AI tools due to legal uncertainty? A: No. The Copyright Office concluded that existing copyright law adequately addresses AI-related questions without requiring new legislation. Organizations can confidently use AI tools by maintaining meaningful human creative involvement and selecting appropriate models for their use cases.

Q: What if we use AI for accessibility purposes? A: Using AI as an assistive tool for people with disabilities doesn't undermine copyright protection. The Copyright Office specifically affirmed this, citing examples like AI-assisted vocal technology that helps creators with speech limitations express their artistic vision.

Key Takeaways

The Copyright Office's guidance provides a clear path forward: use AI as a tool to enhance human creativity, not replace it. Employee-owned businesses and nonprofits can incorporate AI into their workflows while protecting their intellectual property by ensuring meaningful human creative involvement throughout the process. They can also avoid copyright infringement claims by not using the tool to reproduce or otherwise infringe on existing copyrighted materials.

Understanding these principles can help your organization harness AI's potential while respecting both your own intellectual property interests and the rights of other creators. With proper guidelines and an understanding of the legal framework, you can leverage AI's capabilities while maintaining both copyright protection and legal compliance. However, staying informed about the ongoing fair use debate and emerging legal precedents will be crucial as the law continues to evolve in this rapidly changing field.