AI, Authorship, and Ownership: Copyright Law in the Age of Digital Creativity

Innovation today is not just about patents or technology. We’re talking about adaptation and creative outputs.

So, in this era of suspect and “fake news”  regarding videos, digital art, social media content, generative AI visuals, NFTs, who actually owns them?

To quote a more than infamous pre-digital influencer… “that is the question!”

Being in the intellectual property space, the law still is intact with fundamentals on copyright but like my colleagues, we have all seen how murky the lines around authorship have become, especially for creators working at the intersection of law and emerging platforms.

So, let’s unpack three critical areas of copyright law that today’s lawyers — and their clients — need to better appreciate and keep those grey cells active:

• What’s protected?
• Fair Use – where are we?
• How to approach rights ownership in our digital-first, algorithm-fueled environment?

Copyright Basics and Protection

The foundation of copyright: As seen on the copyright office website a copyright is a type of intellectual property that protects original works of authorship as soon as an author fixes the work in a tangible form of expression.  This could include literary works, music, visual art, choreography, software code, and motion pictures, among other categories, including also various employer data.

Fixation doesn’t require publication; the act of saving a digital file, printing a manuscript, or recording audio can also most of the time be generally sufficient.

Where practitioners often see issues is around what’s not protected. This could potentially include:

• Mere ideas
• Information that is in the public domain (the subject of another article all together)
• Tradenames, or slogans (likely the domain of trademark law)

But that said, businesses should have policies in place to ensure the protection of their content, nonetheless.

On January 25, 2025 the US Copyright Office released part 2 of its report on the legal and policy issues related to copyright and artificial intelligence. In this second part it addressed the copyrightability of outputs created using generative AI.

First no change to the laws… so far. The report found that the case has not been made for changes to existing law to provide additional protection for AI-generated outputs.

The Copyright Office also affirmed that existing principles of copyright law are flexible enough to apply to this new technology, as it has in the past. The report also noted that outputs of generative AI can be protected by copyright only where a human author has determined sufficient expressive elements.

The report notes that this can include situations where a human-authored work is perceptible in an AI output, or a human makes creative arrangements or modifications of the output, but not the mere provision of prompts.

In that regard, the Copyright Office corroborates that the use of AI to assist in the process of creation or the inclusion of AI-generated material in a larger human-generated work does not bar copyrightability.

Fair Use vs. Infringement: Distinguishing Use

Fair use remains high on the list of litigated and slippery areas of copyright law. While Section 107 of the Copyright Act outlines the doctrine’s four-factor balancing test, practitioners know that its application is fact-specific and often unpredictable – and may also be effected by the jurisdiction chosen for the suit.

The four factors that form the base analysis incorporate:

• Purpose and character of the use, including whether it is commercial or nonprofit and whether the use is transformative.
• Nature of the copyrighted work, where factual works generally allow more leeway than highly creative ones.
• Amount and substantiality of the portion used.
• Effect of the use on the potential market for or value of the original work.

Recent decisions, such as Andy Warhol Foundation v. Goldsmith, have clarified that “transformative” does not automatically mean fair use, especially when commercial substitution is at play. This nuance is critical for clients in media and content creation spaces who rely on third-party works for commentary, remixing, or aesthetic inspiration.

In that case, the Supreme Court ruled against the Andy Warhol Foundation, stating that Warhol’s use of Lynn Goldsmith’s photo wasn’t sufficiently transformative because it was licensed for the same purpose (magazine covers), affecting the original’s market. This emphasized:

• Commercial purpose matters
• Transformative use isn’t enough alone
• Market harm weighs heavily

Remember fair use is an affirmative defense. So, when in doubt sometimes a license may be an option to consider. And as the saying goes when it comes to the analysis, “it depends.”

Copyright in the Digital Age: Navigating What’s Out There

Today’s creative economy is decentralized, fast-moving, and digitally native. This presents unique copyright questions for both creators and attorneys:

Social Media:

There is a misguided belief that public posting grants others the right to reuse content. However, terms of service (ToS) often provide the platform — not the public — with a limited license. Reposting without attribution or altering copyrighted content can still constitute infringement. We have seen this in some high profile celebrity based cases.

Informal enforcement can dominate. While many memes or remixes may qualify as fair use (especially parody or commentary), platforms still remove content based on takedown notices, ironically making platform policy as important as legal doctrine.

NFTs and Tokenization:

NFTs… still a thing?

Regardless. minting an artwork as an NFT does not transfer the underlying copyright unless explicitly agreed upon in a license. Token holders typically acquire a limited license to display or resell the asset, not the right to commercialize, reproduce, or modify it.

Copyright is a dynamic framework that now intersects with algorithms, creators, platforms, and public perception.

Whether it’s negotiating rights for AI-generated content, clearing UGC for a brand partnership, or advising on NFT terms, counsel needs to also educate themselves on emerging tech.

So copyright law is still exciting — and where innovation meets protection.

Disclaimer: The information contained in this article is solely for informational purposes only and does not constitute legal advice or form an attorney-client relationship between you and Belous Law Corporation in any manner and is not an offer to represent any party. All content is provided as is and may not be disseminated without written permission. The content of this article may be considered Attorney Advertising, as legally applicable.