We are seeing startups scale their R&D at accelerated speeds using Artificial Intelligence (AI), but this streamlined workflow does not come without risks. The problem lies in business owners overlooking the updated legal requirements surrounding human authorship. If you aren’t careful, you risk completely hollowing out your Intellectual Property (IP) portfolio.
Why AI Cannot Hold a Patent
IP remains central to valuation, but the area where AI in workflow and regulatory protections intersect is where founders will face new challenges. The U.S. Patent and Trademark Office (USPTO) has been firm in its guidance: AI is not an inventor. Under the March 2026 Revised Inventorship Guidance for AI-Assisted Inventions, the USPTO has clarified that a “natural person” needs to be involved in the process and that human “conception” remains the “touchstone of inventorship.” This is the new standard.
If an AI system like a Large Language Model (LLM) devised a core component of your technology with little human oversight or intervention, your patent application is likely to face rejection.
If there’s one thing for business owners to understand about these updates, it’s that a human must make a “significant contribution” to every claim. A more successful approach is to emphasize the functional improvements of the invention over what currently exists in the market.
Copyright and the Necessity of the Digital Audit Trail
The judicial consensus is equally definitive. After the Supreme Court’s denial of certiorari in Thaler v. Perlmutter, the D.C. Circuit’s ruling is clear: the Copyright Act demands human authorship.
Founders simply cannot ignore this. If you are not thoroughly documenting your team’s process when incorporating AI, those assets likely don’t qualify for copyright protection and may allow your competitors to legally scrape and replicate your work with impunity.
Building Your Digital Audit Trail
Protecting your innovation requires documentation. Specifically, strategic, documented human intellect showing that your IP is not mere AI copy-and-paste. Consider taking the following steps and ensure your IP portfolio is fully intact:
- Keep granular records of initial prompts and the manual, iterative adjustments your team makes to prove human creative control.
- Inside your internal systems, explicitly separate and tag human-authored code versus AI-generated code.
- Ensure your employment and vendor agreements address the nuances of AI-augmented output immediately, especially under current NY/NJ jurisdictional rules.
Ensure Your IP Remains Intact
Defending your IP portfolio against the scrutiny of opposing counsel and aggressive market competitors takes proactive legal maneuvering. Contact the Corporate Law team at Mandelbaum Barrett today to ensure your intellectual property remains fully intact and legally defensible.
Disclaimer: This post is for informational purposes only and does not constitute legal advice or an attorney-client relationship. Prior results do not guarantee a similar outcome.