Your marketing team produced a quarter’s worth of blog images in an afternoon. Your engineers shipped a feature with an AI coding assistant. Someone rewrote the landing page copy over lunch. Nobody stopped to ask whether you own any of it.

The bottom line: you probably own less than you think, and what you do own turns entirely on what a human actually contributed. That isn’t a close question anymore, with no split in the U.S. Circuit Courts and the Copyright Office’s own guidance pointing in the same direction. The Supreme Court declined to take it up on March 2, 2026.

What You Actually Own

U.S. copyright protects works of human authorship. Material an AI system generates, without meaningful human creative control over its expressive elements, isn’t protected by copyright at all. Not by you, not by the AI vendor, not by the model. It’s unowned from the moment it exists.

That doesn’t make AI output worthless, and it doesn’t stop you from using it commercially. It means the raw output carries no copyright you can enforce against a competitor who lifts it. Whatever protection you get attaches to the human contribution: the text a person wrote, the edits a person made, the creative selection and arrangement of AI-generated pieces into something larger.

Looking at Oklahoma law, for example, businesses have no separate state copyright protections. And regardless of which state your business operates in, Copyright is exclusively federal. 17 U.S.C. § 301 preempts state-law rights equivalent to it, though contract, trade secret, and right-of-publicity claims aren’t preempted and can still matter in an AI-content dispute.

Where the Copyright Office Has Drawn the Line

The Copyright Office’s refusal letters are more useful than the abstract rule, because they show you the line applied to real facts. Three are worth knowing.

Zarya of the Dawn. A graphic novel combining the author’s own written text with Midjourney-generated images. The Office split it. The author’s text, and her selection, coordination, and arrangement of the written and visual elements, were registered. The Midjourney-generated images were not, because they were “not the product of human authorship.” Prompts, the Office reasoned, work more like suggestions than orders, since you can’t predict what the system hands back.

Théâtre D’opéra Spatial. Jason Allen’s award-winning image, refused even though he’d run more than 600 prompts before settling on an output. The problem wasn’t that Allen didn’t work hard enough. It’s that Midjourney “does not interpret prompts as specific instructions to create a particular expressive result.”

SURYAST. The Copyright applicant fed his own photograph and Van Gogh’s The Starry Night into the AI image generator, then picked a number controlling how strongly thestyle transferred. Copyright refused by the Office. Even with a copyrightable input, the AI system decided where elements landed and what colors applied, and “selecting a single number for a style filter is the kind of de minimis authorship not protected by copyright.”

The registration guidance itself, published at 88 Fed. Reg. 16190, adds an obligation many people miss. If your work contains more than a de minimis amount of AI-generated material, you have to disclose it and describe what the human contributed. Already registered something without disclosing? File a supplementary registration and correct the record.

The Framework the Office Applies Now

In January 2025 the Office published Copyright and Artificial Intelligence, Part 2: Copyrightability. It’s the document your team should be working from, and here is what it says.

• Prompts alone aren’t enough. “Based on the functioning of current generally available technology, prompts do not alone provide sufficient control.” A longer, more elaborate prompt doesn’t change the analysis, which is worth passing along to anyone on your team convinced their prompt engineering amounts to authorship.
• Using AI as a tool costs you nothing. “The use of AI tools to assist rather than stand in for human creativity does not affect the availability of copyright protection for the output.” Removing an object from a photo, cleaning up audio: assistive, and fine.
• Your own expression survives. Feed your copyrightable work in, and whatever of your expression is still perceptible in the result is still yours.
• Creative selection, coordination, arrangement, and modification of AI material are protectable, as to what the human actually did.

The Office also declined to recommend new legislation, concluding that “the case has not been made for additional copyright or sui generis protection for AI-generated content.” I’d expect that to hold for a while as Congress has shown no indication of addressing the question, and the Office just spent two years explaining why nothing new is needed.

Testifying to the Senate Judiciary IP Subcommittee on May 12, 2026, Register of Copyrights Shira Perlmutter said the Office “has to date registered more than 7,000 claims that include AI-generated materials where those materials have been disclaimed.” Works built with AI get registered all the time. They get registered because the applicant disclosed the AI material and claimed only the human part.

The Courts Agree

Stephen Thaler applied to register an image naming his AI system as the author. The Office refused. On March 18, 2025, the D.C. Circuit affirmed: “As a matter of statutory law, the Copyright Act requires all work to be authored in the first instance by a human being.” Thaler v. Perlmutter, 130 F.4th 1039 (D.C. Cir. 2025). The reasoning is structural, not philosophical. The Act measures the copyright term by “the life of the author,” passes termination rights to a widow, widower, or surviving children, and requires transfers signed by the owner. None of that works if the author is a machine.

The line worth keeping is the court’s own caveat: “the human authorship requirement does not prohibit copyrighting work that was made by or with the assistance of artificial intelligence.” Using AI isn’t the disqualifier. Letting AI do the authoring is.

The Supreme Court denied certiorari on March 2, 2026. Thaler v. Perlmutter, No. 25-449. The same answer had already landed on the patent side, where the Federal Circuit held that an inventor has to be a natural person. Thaler v. Vidal, 43 F.4th 1207 (Fed. Cir. 2022).

The Part Nobody Has Answered

Pure AI output isn’t protected. Substantial human authorship is. Where the line falls between those two is still anyone’s guess, and no court has ruled on it.

Allen v. Perlmutter, No. 1:24-cv-02665 (D. Colo.), is the case to watch. Cross-motions for summary judgment were fully briefed in January 2026 and it’s still pending. It’s the first real chance for a federal court to say how much iterative prompting, curation, and editing adds up to authorship. My guess is the court affirms the Office and says very little about the middle, which would leave everyone roughly where they are now. Worth watching regardless.

The evidentiary standard is undeveloped too, so nobody knows what proof of human creative contribution a court will want to see. And here’s the one that catches people, a work that isn’t copyrightable can still infringe somebody else’s copyright. Having no protection in your output says nothing about your exposure.

What a Registrable AI-Assisted Work Looks Like

Put the negative rules together and a usable path falls out. Nothing about AI in your workflow blocks registration. What blocks it is a deliverable where you can’t point to what the human did.

The safest version looks like this. A person writes, drafts, photographs, or designs something copyrightable. AI assists somewhere in the process, or generates components. A person then selects among outputs, arranges them, and edits them in ways that add original expression. On the application you claim the human contribution, describe it, and disclaim the AI-generated material. What you get is a registration covering the human layer, which is narrower than a registration covering everything, and considerably better than nothing.

Zarya of the Dawn is the model here, not the cautionary tale it usually gets cited as. The author walked away with a registration covering her text and her arrangement. She lost the images. That’s the trade, and for most business content it’s a perfectly acceptable one.

What to Do About It

Read your AI vendor’s output clause for what it actually says. OpenAI’s consumer Terms of Use, under the Content section, assign you “all our right, title, and interest, if any, in and to Output.” Those two words, “if any,” are doing real work. If the output isn’t copyrightable, the assignment conveys nothing, because there’s nothing to convey. It’s a promise not to claim the material against you, not a warranty that you own it.

Let me point you to another example in the OpenAI consumer Terms of Use. Look under the Content section at the paragraph titled, “Ownership of content.” It reads, “Due to the nature of our Services and artificial intelligence generally, output may not be unique and other users may receive similar output from our Services. Our assignment above does not extend to other users’ output….” That provision certainly supports another perspective on why you must be vigilant when incorporating AI-generated content into your company’s “hopefully” proprietary assets.

Assume a competitor can lawfully copy anything you generated purely with AI, or received the same or similar output from their AI tool. That should change what you build with AI and what you don’t. A logo, a mascot, a signature illustration style, anything whose value depends on nobody else being able to use it, needs real human authorship in it, and you need to be able to prove it. Keep the drafts, the prompt histories, the redlines, the version history. Reconstructing that record two years into a dispute is expensive and unconvincing.

Disclose AI material on registration applications, and do it accurately. A knowing misstatement of material fact can put the registration itself at risk, and the registration is the asset you need in order to sue. Candor costs almost nothing; claim the human contribution, disclaim the rest.

Fix your IP assignment language. This is the one that occurs most often in SaaS and professional services agreements, and it’s the easiest to miss, because the clause looks fine until you read it against this rule. Most assignment clauses transfer works of authorship the person creates. If your contractor hands you AI output with thin human involvement, there may be no work of authorship to assign, and you’ve paid for a deliverable nobody owns. Address AI-assisted deliverables expressly, add a disclosure obligation, and get a warranty about the human contribution.

Know whether you’re dealing with an employee or a contractor. Everything above assumes a contractor, because that’s where the assignment clause trap lives. A different rule applies to your own people.

If your employee creates the work within the scope of employment, and there’s enough human authorship to support a copyright, you own it automatically as a work made for hire under 17 U.S.C. § 201(b). No assignment needed, no signature required. But work made for hire only decides who owns a copyright that already exists. It doesn’t create one. An employee’s purely AI-generated output is exactly as unowned as a contractor’s, work made for hire or not. The question isn’t whose payroll the creator is on. It’s whether a human did enough for there to be a copyright to own.

One Question to Put to Your Team This Week

Pick the ten most commercially valuable pieces of content your company produced this year and ask two things about each: did AI make it, and can you prove what the human did? Where the answer runs yes and no, that asset isn’t protected, and any decision you’ve made assuming otherwise needs revisiting.

The law here is more settled than the headlines suggest. What isn’t settled is the middle, and a ruling out of Colorado could move it one direction or the other before the year is out.

This post is provided for general informational purposes only and does not constitute legal advice. Reading this post does not create an attorney-client relationship. Contact Ken McConkey to discuss your company’s specific circumstances.