Copyright Law: What’s Actually Protected — and Where Clients Get Burned

Attribution is not a license.

“Found online” is not a defense.

And “we only used it internally”  likely won’t shield you from exposure.

Copyright is arguably the most underappreciated IP right among corporate teams — despite the fact that it underpins nearly everything modern enterprises create, share, and monetize.

From a legal perspective, the rules are clear. But the real-world applications? That’s where things get messy.

Copyright Protects Expression — Not Ideas

Under 17 U.S.C. § 102, copyright protects original works of authorship that are fixed in a tangible medium. That could mean software code, whitepapers, training modules, podcasts, internal videos, or the layout of a custom dashboard. The bar for originality is low, but the implications are high.

Once fixed, protection is automatic. But enforcement rights — including the ability to recover statutory damages and attorney’s fees — require formal registration with the Copyright Office.

Where companies slip is in assuming that everything they touch is protected. Or that their use of third-party content is somehow exempt. It’s not. Copyright doesn’t cover ideas, processes, or names. It doesn’t protect what’s already public domain. It does, however, kick in fast when an unauthorized use involves expressive content — and enforcement is often unforgiving.

Payment Doesn’t Equal Ownership

One of the most common missteps we see? Clients assume that paying for something — a logo, a website, a software module — automatically means they own the copyright. But ownership flows from authorship or a written assignment, not a purchase order. Even if you also pay a third party rights to use what they claim is theirs.

If the creator is a full-time employee acting within the scope of their job, the work likely qualifies as “made for hire.” But if the work was created by an independent contractor, the rules shift dramatically. Only nine narrow categories of commissioned works qualify for work-for-hire treatment under § 101 — and even then, only if there’s a written agreement saying so.

And now we have generative AI complicating the landscape further. As clarified in the 2025 Copyright Office report, outputs from AI systems are not copyrightable unless a human exercises sufficient creative control. Prompting alone doesn’t count.  But… stay tuned there.

Copyright Liability Hides in Plain Sight

The modern enterprise is awash in copyright triggers.

Your marketing team uses licensed images but forgets to renew usage rights. Your developers borrow “harmless” code snippets from GitHub with restrictive licenses. Your training department reuses third-party video content in your LMS without verifying usage terms. Your social media manager reposts a meme assuming it’s “public domain” because it’s viral.

These scenarios are routine — and increasingly risky. Fair use under Section 107 might apply in edge cases, but it’s a highly fact-specific affirmative defense, not a free pass. And post-Warhol v. Goldsmith, courts have made clear that even transformative use doesn’t protect you if it undercuts the original’s commercial market.

That nuance matters in corporate settings where most uses are, by nature, commercial.

“Fair Use” is a defense as well not a right.

Counsel’s Role: Prevent the Lawsuit, Protect the Value

Copyright issues often surface during diligence — whether in an M&A transaction, a fundraising round, or an enterprise deal with IP-heavy deliverables. If you don’t have clean rights to what you’ve built, the deal can stall. Or disappear.

Legal teams should be embedding copyright strategy into the creative process:

• Reviewing agreements for clear IP ownership and transfer language
• Training internal teams on licensing and fair use boundaries
• Vetting AI-assisted content workflows for authorship clarity
• Registering core content proactively to support enforcement
• Reviewing content across territories
• Establishing takedown protocols and content usage policies across departments

Note also that there are two parallel storylines now dominating: Tech platforms keep winning headline cases that in part that bless (at least for now) training on massive troves of copyrighted works, while creators and rightsholders push fresh suits and legislation to claw back leverage.

Some recent cases:

• Meta & Anthropic victories (June 2025). Federal judges in California and New York said their ingestion of millions of books was “transformative” enough to qualify as fair use, although the rulings leave the door open if rightsholders can show market harm and also have several caveats.
• Kadrey v. Meta (25 Jun 2025). Same court, related logic: Authors lost on fair-use grounds, but the judge signaled unease with unchecked scraping.
• Getty Images v. Stability AI (UK). Getty reently withdrew its core infringement claim, narrowing the high-profile London fight to residual issues such as trademark dilution.

If you haven’t audited your copyright assets and exposures lately? Start now.

Because in a digital-first, brand-centric economy, the value of your company increasingly lives in your creative IP. And copyright — properly understood and managed — is one of your strongest shields.