Copyright 101
Copyright is a legal protection automatically granted to the original creators of software code, giving them exclusive rights to use, modify, distribute, and license their work. For developers and companies, owning the copyright ensures control over how the software is used and monetized. It helps prevent unauthorized copying or stealing of the codebase, making it a critical asset for building valuable, defensible products and attracting investors. Without proper copyright ownership, your business could face legal risks or lose its competitive edge.
Source Code as a Literary Work
Under copyright law, source code is treated as a literary work – just like a novel or screenplay – because it’s a written expression of ideas in a specific, fixed form. This classification means that the structure, organization, and actual lines of code are protected from unauthorized copying. Recognizing source code as a literary work reinforces its value as intellectual property and strengthens legal claims in the event of infringement.
Ownership of Copyright
By default, the person who writes the code owns the copyright. For W2 employees, the employer usually owns the code under “work made for hire.” In contract work, ownership depends on the agreement. Unless it clearly assigns rights, the developer may keep them. Clear contracts are key to avoiding confusion.
Open Source != “No Copyright”
Open source software is still protected by copyright. The difference is that the author grants permission to use, modify, and share it under specific license terms. Copyright ownership remains with the creator or project maintainers. Using open source doesn’t mean the code is free of legal restrictions, it just comes with a different set of rights and obligations.
The Copyright Office Report
The U.S. Copyright Office’s 2023 report on AI and copyright reaffirmed that copyright protection requires human authorship. It clarified that while AI-assisted works may qualify, only the portions with meaningful human creative input are eligible. The report serves as guidance for creators and companies navigating copyright in the era of generative AI, especially in fields like software development, where human-AI collaboration is increasingly common.
It’s All Speculation Until Courts or Congress Act
Despite reports, opinions, and ongoing lawsuits, the legal landscape around AI and copyright – especially in the context of software – is still unsettled. Until a binding federal court decision is made, or the laws are updated by Congress, much of what we believe about ownership, infringement, and fair use in AI-generated code remains speculative. For now, creators, developers, and companies must navigate a gray area with evolving guidance and substantial legal uncertainty.
Thaler v. Perlmutter
In Thaler v. Perlmutter, the court ruled that works created entirely by AI aren’t eligible for copyright and that only humans can hold copyright protection. Thaler tried to register AI-generated art, but was denied, reinforcing that meaningful human authorship is required. This principle also applies to software code: AI-generated code without human creative input may not be protected by copyright.
Thomson Reuters v. Ross
In Thomson Reuters v. Ross, the legal publisher sued Ross Intelligence for allegedly scraping and using its copyrighted legal content to train an AI legal research tool. Ross argued that its use was “intermediate” and transformative, not a direct republishing of Westlaw materials. The case highlights the legal tension between data scraping and fair use in AI training—raising important questions about whether using copyrighted text to train models constitutes infringement or innovation.