Picture a bloke who runs a little coffee van. Lovely fella, makes a proper flat white, and one spring he gets an AI image tool to knock up his logo. Takes him about ten minutes. He prints it on the van, the cups, the aprons, the lot.
Then someone two towns over starts selling coffee under a logo that looks suspiciously like his. Same steaming cup, same wonky lettering vibe. So he rings a solicitor, all fired up, ready to send a stern letter.
And the solicitor asks him one question. "Who drew it?"
That's where the wheels come off. Because the honest answer is "nobody did". He typed a sentence and a machine spat out a picture. And in a lot of places right now, that means the picture might not belong to anyone at all.
So today's AI Reality Check is about the bit nobody reads in the terms and conditions. Who owns the stuff your AI makes?
The bloke who tried to make his AI the author
There's a computer scientist in the States called Stephen Thaler. He built an AI system, it made a piece of art, and he went to register the copyright with the AI listed as the author. Not himself. The machine.
The US Copyright Office said no. Thaler took them to court and lost. He appealed and lost again. Then he tried the Supreme Court, and on 2 March 2026 the US Supreme Court declined to hear Thaler v. Perlmutter, which leaves the lower court ruling standing. Copyright in America needs a human author. Full stop.
So you might think "fair enough, he was being cheeky, listing a robot as the artist". And sure, his case was the extreme version. But here's the bit that matters for the rest of us. The rule doesn't care whose name you write on the form. It cares who did the creative work.
That same law firm write-up spells it out plainly: a work made entirely by AI, with no meaningful human creative contribution, can't be copyrighted, and it falls into the public domain. Anyone can copy it, use it, or sell it.
Your logo. Your product photos. That clever blog header. If a machine did all the creative heavy lifting, you might be holding something any competitor can lift straight off your website.
"But I wrote a really detailed prompt"
I hear this one a lot. But I spent forty minutes on that prompt. Surely that counts?
According to the US Copyright Office, probably not. Their report on copyrightability and AI takes the view that prompts on their own work like instructions. They describe ideas, and ideas weren't ever protected by copyright anyway. You can't copyright "a cheerful cup of coffee in a retro style" any more than you can copyright "a detective who solves crimes".
It's sort of like hiring a sign writer and saying "make it look friendly". You gave directions. The sign writer made the creative calls. Except in this case the sign writer is a server farm, and server farms don't hold copyright.
What does count is the human stuff around it. Picking, arranging, editing, redrawing, combining AI bits with your own work. The more of you that's actually in the final thing, the stronger your claim.
And here in the UK? It's messier
This is where it gets properly interesting for anyone running a business over here, because the UK took a different road decades ago.
Section 9(3) of the Copyright, Designs and Patents Act 1988 already covers "computer-generated works". It says the author is the person who made the arrangements for the work to be created. Sounds like good news, doesn't it? Type the prompt, you made the arrangements, you own it.
Not so fast. The government's own Report on Copyright and Artificial Intelligence points out there appears to be a legal contradiction inside that very section. It only protects works that are "original", and the modern test for originality leans on human creative choices. So a law written for machine-made work has a test in it that machine-made work struggles to pass.
And it gets better. In the consultation, the government's preferred option was to remove that computer-generated works protection altogether, unless the responses showed it was doing some good. That same report says they won't change copyright law until they're confident they've got it right.
So in plain English: the UK rule that might protect your AI logo has a hole in the middle of it, and the government has openly floated scrapping it. That's not a foundation I'd build a brand on.
I'm not a lawyer, and this isn't legal advice. If you've got real money riding on a piece of AI work, pay an IP solicitor for an hour. It's the cheapest insurance you'll ever buy.
Why a five-person business should care
Most small business owners I talk to assume "I paid for the tool, so I own what it makes". The tool's terms might even say something reassuring like "you own your outputs".
But here's the thing. A software company can promise not to claim your output. It can't hand you a copyright the law doesn't recognise. Those are two very different promises, and only one of them helps you in front of a judge.
In my experience, the stuff that actually causes grief falls into three buckets:
Your brand assets. Logos, mascots, packaging. These are the things competitors copy, and the things you most want to stop them copying. If they're pure AI output, you've got a weaker hand.
Client work. Agencies, freelancers, consultants, listen up. If your contract says you assign copyright to the client, and you handed them pure AI output, you might be assigning something that doesn't exist. Awkward conversation waiting to happen.
Content you sell. Courses, ebooks, templates, stock-style images. If a buyer can legally copy and resell the lot, your product just got a lot less special.
And the good news? Your everyday stuff, like a quick social caption or an internal email draft, mostly doesn't matter. Nobody's suing over a Tuesday Instagram post. Save the worry for the assets that carry your name and your income.
What to actually do about it
So, enough doom. Here's the practical bit. None of this means stop using AI. I use it every single day, Viktor writes alongside me constantly. It just means you've got to use it with your eyes open.
1. Put a human in the creative loop on anything that matters. Use AI to explore ideas and rough concepts, then get a designer (or yourself) to make real creative changes. For a logo, that means redrawing it, not just recolouring it. The more human choices in the final version, the stronger your position.
2. Keep the receipts. Save your drafts, your edits, your versions. If you ever need to show the human contribution, a folder of "here's the AI rough, here's what I changed and why" beats your memory every time.
3. Register a trade mark for your brand. This one's my favourite because people forget it exists. Copyright protects creative works. A registered trade mark protects your brand in trade, and it works differently. For a logo you actually depend on, talk to someone about getting it registered.
4. Fix your client contracts. If you deliver creative work, say plainly how AI gets used and what you're actually assigning. Clients would rather hear it from you upfront than from their solicitor later.
5. Sort out a simple AI use policy. One page. What AI's fine for, what needs human finishing, what never goes near it. Your team will thank you, because right now they're all guessing.
So who drew the coffee cup?
If that coffee bloke were smart, he'd pay a designer to properly redraw his logo, keep the bits he loves and change the rest. Then register it as a trade mark. It'd cost him a bit and save him a lot of sleepless nights. And next time a copycat turns up, he's got something real to point at.
That's the AI reality here. The tools make brilliant stuff fast. But "fast" and "yours" aren't the same thing, and the law hasn't caught up with how most of us actually use these tools. Until it does, the human touch isn't just nice to have. It's the bit that makes the work belong to you.
Sources
- Who Owns AI-Generated Content?, Peter J. Lamont, June 2026
- Copyright and Artificial Intelligence, US Copyright Office
- Report on Copyright and Artificial Intelligence, GOV.UK, 2026
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Want someone to go through your business and tell you which bits should be running themselves, and which bits still need a human hand on them? That's the AI Ops Audit. I look at how you actually operate, find the jobs a machine should be doing, and hand you the order to fix them in. Not a 40 page report nobody reads.
Brewed by Steven, poured by Viktor
About Steven Tann: Steven helps business owners build systems that run themselves using AI. After 10+ years helping 7,000+ businesses and building his own autonomous operations, he's the bloke who actually does it, not just talks about it. Find out more at steventann.com.