Who Owns Code Generated by AI Coding Assistants?
AI coding assistants like GitHub Copilot, Amazon CodeWhisperer, and other tools are transforming software development by generating code suggestions, completing functions, and even writing entire modules. However, these tools create complex intellectual property questions about who owns AI-generated code, whether generated code infringes existing copyrights, how licensing applies to AI suggestions, and what representations companies can make about code ownership.
For software companies using AI coding tools or developing AI-assisted programming products, understanding ownership, licensing, and infringement risks is essential for managing IP rights, satisfying customer requirements, and avoiding liability.
Copyright in AI-Generated Code
Human Authorship Requirement
U.S. copyright law requires human authorship. The Copyright Office has clarified that works created entirely by AI without human creative input are not copyrightable. However, works with sufficient human authorship incorporating AI assistance may be copyrightable.
For AI-generated code, key questions include how much human contribution is required, whether prompt engineering constitutes sufficient authorship, and how to assess creativity in code generation.
Work-Made-For-Hire for Employed Developers
Code created by employees within employment scope is typically work-made-for-hire owned by employers. This applies regardless of whether developers use AI tools.
Employer ownership depends on employment relationships and scope, not the tools used.
Contractor and Freelancer Issues
Code created by contractors isn’t automatically work-made-for-hire unless agreements explicitly assign rights. If contractors use AI tools, ownership becomes more complex.
Ensure contractor agreements address AI tool usage and assign all rights in deliverables including AI-generated portions.
GitHub Copilot and Similar Tools
How Copilot Works
GitHub Copilot, powered by OpenAI Codex, was trained on billions of lines of public code from GitHub repositories. It suggests code completions based on context, comments, and function names.
Training on public code raises questions about whether suggestions reproduce training data and what rights users have to suggestions.
GitHub Copilot Terms of Service
GitHub’s terms specify that users own code they write with Copilot assistance, subject to third-party rights. GitHub disclaims ownership but notes suggestions may be similar to training data.
Users are responsible for ensuring code doesn’t infringe third-party rights.
Copilot Copyright Litigation
Class action litigation has challenged Copilot’s training on public repositories and generation of suggestions potentially reproducing licensed code. Courts are addressing whether training constitutes copyright infringement and whether generated code infringes copyrights in training data.
Outcomes will significantly impact AI code generation tools.
Infringement Risks from AI Code Suggestions
When Suggestions May Infringe
AI-generated code could infringe if it reproduces substantial portions of copyrighted code from training data, replicates distinctive code structures or algorithms, or generates code identical to GPL or other copyleft licensed code.
The risk increases when suggestions closely match existing implementations.
Detecting Problematic Suggestions
Implement processes to identify potentially infringing suggestions including code review focusing on AI-generated sections, automated scanning for similarity to known codebases, and license compliance checks for open source matches.
Mitigating Infringement Risk
Reduce risks through configuring AI tools to filter suggestions based on licenses, reviewing and modifying AI suggestions rather than accepting verbatim, maintaining records of code sources and modifications, and implementing clean room procedures for critical components.
Licensing Implications
Open Source in Training Data
AI models trained on open source code may generate suggestions derived from GPL, AGPL, or other copyleft licenses. If suggestions constitute derivative works, using them could trigger copyleft obligations.
The legal status of such suggestions remains uncertain.
Customer License Representations
Software companies licensing products to customers typically represent ownership of code and non-infringement. AI-generated code complicates these representations when suggestions may reproduce training data or companies cannot verify suggestion origins.
Consider qualifying representations for AI-generated portions or conducting enhanced diligence.
Open Sourcing AI-Generated Code
Companies open sourcing code should disclose if significant portions are AI-generated, verify AI tool terms permit open sourcing, and choose licenses appropriate for potentially AI-derived works.
Enterprise Policy Considerations
AI Coding Tool Policies
Establish internal policies governing which AI coding tools are approved for use, requirements for review and modification of suggestions, documentation of AI-generated code, and prohibited uses (e.g., critical security components).
Training and Awareness
Train developers on IP implications of AI code generation, license compliance for suggestions, and review requirements for AI-generated code.
Code Review Practices
Implement code review processes specifically addressing AI-generated code including verification that suggestions are understood and appropriate, license compatibility checks, and avoidance of verbatim AI output without review.
Vendor and Customer Contracting
Disclosing AI Usage
Decide whether to disclose AI tool usage to customers. Some enterprise customers prohibit AI-generated code in deliverables while others accept it with appropriate safeguards.
Transparency builds trust but may create restrictions.
Contractual Provisions
Address AI-generated code in contracts through express permissions or prohibitions on AI tools, enhanced IP warranties for AI-generated portions, indemnification for AI-related infringement, and audit rights to verify compliance.
Licensing AI Code Generation Products
Companies offering AI coding products should clarify in licenses who owns generated code, what rights users have to suggestions, disclaimers regarding third-party rights, and limitations of liability for infringement.
Regulatory Developments
Copyright Office Guidance
The Copyright Office is developing guidance on AI-generated works and authorship requirements. Evolving positions will affect ownership and registrability of AI-generated code.
Proposed Legislation
Congressional proposals address AI training on copyrighted works and rights in AI outputs. Legislation could clarify ownership and fair use questions.
Best Practices for Using AI Coding Tools
Review and Modify Suggestions
Never accept AI suggestions blindly. Review for correctness, security, and appropriateness. Modify suggestions to add human creativity and judgment.
Substantial human modification strengthens copyright claims.
Document Code Provenance
Maintain records of what code is AI-generated versus human-written, which AI tools were used, and how suggestions were modified or customized.
Conduct License Audits
Regularly audit codebases for open source or proprietary code that may have entered through AI suggestions. Use scanning tools to detect matches.
Insurance Considerations
Review whether IP insurance covers infringement claims arising from AI code generation. Consider additional coverage if needed.
Alternative Approaches
Limiting AI Tool Use
Some companies restrict AI coding tools to non-critical components, use tools trained only on permissively licensed code, or prohibit AI tools entirely for certain projects.
Developing Internal AI Tools
Larger companies may develop proprietary AI coding assistants trained exclusively on internal code, avoiding third-party training data concerns.
Conclusion: Navigating Uncertain Legal Landscape
AI code generation tools offer productivity benefits but create unresolved IP questions. Companies should understand ownership uncertainties and infringement risks, implement policies and review processes, qualify contractual representations appropriately, and monitor legal developments.
As law evolves, proactive risk management positions companies to leverage AI coding tools responsibly while protecting IP interests.
Contact Rock LAW PLLC for AI Code Licensing Counsel
At Rock LAW PLLC, we help software companies navigate IP issues with AI-generated code.
We assist with:
- AI coding tool policy development
- Software licensing agreement drafting
- Code ownership analysis
- Open source compliance for AI-generated code
- Customer contract negotiation
- Infringement risk assessment
Contact us for guidance on managing IP rights in AI-assisted software development.
Related Articles:
- Who Owns AI-Generated Content?
- Open Source License Compliance
- Employment Agreements for AI Companies
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