Artificial intelligence (AI) is transforming how startups develop their products and services, creating opportunities for efficiency, automation, and entirely new business models. As startups increasingly integrate AI into their workflows—whether through third-party platforms like OpenAI, Google, or Anthropic, or by fine-tuning open-source models like Meta’s Llama or DeepSeek—an increasingly urgent question arises: Who owns the intellectual property (IP) developed with AI—whether generated by an AI model, refined through AI tools, or built on top of an AI platform?
While traditional software and content tend to involve established authorship and ownership structures, AI-generated outputs exist in a gray area. As courts, regulators, and policymakers grapple with the boundaries of AI-generated IP, startups that fail to establish clear ownership risk losing their competitive edge. While the U.S. and EU have begun issuing guidance on AI and IP, many Latin American (LatAm) jurisdictions still operate under outdated IP laws that do not account for AI-generated content, leaving companies exposed to a level of uncertainty that can be unsettling for founders and investors alike. Without a well-defined legal framework, competitors can replicate AI-driven products without repercussions, and investors may question the defensibility of a startup’s technology.
While the U.S. Copyright Office has expressly stated that fully AI-generated works are not copyrightable (1), most LatAm jurisdictions have yet to issue definitive policies on AI and IP. Brazil has started drafting AI regulations (2), but key markets like Argentina (3), Mexico (4), and Colombia (5) continue to rely on outdated copyright and patent laws that fail to address AI-generated content. With legal protections still undefined, LatAm founders face greater risks when trying to commercialize AI-driven innovations, enforce ownership rights, or expand internationally.
LatAm startups must navigate these uncertainties while competing in a global market. Unlike their U.S. and European counterparts, LatAm founders cannot rely on established case law or regulatory guidance to safeguard AI-generated IP. Instead, they must take proactive steps to structure their AI use, negotiate strong agreements with AI providers, and implement internal policies that reinforce ownership claims. This article explores the challenges surrounding AI- AI-generated IP, the strategies that LatAm startups can use to protect their innovations, and the factors investors consider when evaluating AI-driven businesses.
AI-Generated IP in LatAm: A Gray Area
The absence of established legal frameworks creates significant risks for founders—AI-generated outputs may not qualify for copyright or patent protection, and courts remain untested on key ownership disputes. Mexico and Colombia rely on traditional copyright and patent frameworks that make no mention of AI-generated works, leaving uncertainties around ownership and enforcement. Argentina, while recognizing AI’s impact, has yet to introduce substantive regulatory changes. Chile, one of the region’s more tech-forward economies, is considering reforms but has yet to establish concrete AI-related IP policies (6).
LatAm copyright laws remain unclear on whether AI-generated content qualifies for protection, but global precedents suggest that human authorship remains a key requirement. If AI-generated text, images, music, or video cannot be copyrighted, competitors may freely replicate them without legal repercussions. Some jurisdictions, like Brazil, explicitly require human authorship in copyright law (7), suggesting that fully AI-generated content may not qualify for protection. That said, what constitutes sufficient human involvement remains undefined across the region, leaving startups unsure whether AI-assisted works will hold up in court.
Patent laws across LatAm follow the global norm that only human inventors can be listed on a patent, creating uncertainty for AI-assisted innovations. The U.S. Patent and Trademark Office (USPTO) (8), the European Patent Office (EPO) (9), and the UK Intellectual Property Office (UKIPO) (10) have all ruled that AI cannot be named as an inventor. LatAm patent offices, including Brazil’s National Institute of Industrial Property (INPI) (11), similarly require inventorship to be attributed to a natural person. While fully AI-generated inventions are unlikely to qualify for protection, the real challenge is defining how much human involvement is required in AI-assisted innovations. No LatAm jurisdiction has issued guidance on whether AI-assisted inventions—where AI plays a major role, but a human provides input—can qualify for a patent, leaving founders without a clear framework for protecting AI-driven innovations.
Trademarks offer a more reliable form of protection for AI-driven businesses, as they safeguard brand identity rather than creative or technical content. While copyright and patent laws remain unsettled on AI-generated works, trademark systems in Brazil and Mexico follow international standards, including the Madrid System, which allows for international registrations of trademarks (12). LatAm IP offices, however, have not addressed whether AI-generated brand elements—such as logos or slogans—qualify for protection.
How Startups Can Protect AI-Generated IP
1. Understand AI Provider Licensing Agreements
Most startups do not build their own AI models from scratch. Instead, they rely on third-party AI services like OpenAI, Google Cloud AI, or Anthropic’s Claude. These platforms typically operate under usage-based licensing models, which dictate what users can and cannot do with AI-generated content.
Before integrating an AI provider into their products, founders must carefully review the provider’s Terms of Service and Licensing Agreements to ensure that they fully understand the implications for IP ownership, data security, and liability. This is especially critical in LatAm, where the regulatory framework for AI-related contracts remains underdeveloped. As such, startups must take proactive steps to secure their IP and mitigate exposure, including:
- Determining whether they have exclusive ownership rights over AI-generated content or if the AI provider retains any rights to use, modify, or reproduce those outputs. Some AI providers, such as OpenAI, allow users to own the content generated through their Application Programming Interface (API) but retain broad rights for model training and improvement (13), which could create issues if a startup needs absolute exclusivity over its outputs. In LatAm, this raises further concerns due to weaker enforcement of contract terms in some jurisdictions. Given the lack of strong legal precedents, AI-related Licensing Agreements may face greater scrutiny or challenges in local courts.
- Assessing whether the AI provider imposes restrictions on commercial use, such as requiring additional approvals or fees before monetizing AI-generated content. Some AI platforms impose limitations on how generated content can be utilized, especially in regulated industries. For example, Anthropic’s Usage Policy prohibits creating and disseminating deceptive or misleading information about a group, entity, or person (14), which could impact startups aiming to develop AI-driven content moderation tools.
- Verifying whether proprietary data fed into the model remains confidential or if the AI provider has the right to retain and repurpose it. If a company integrates sensitive or proprietary information into an AI system that allows for future use by the provider, it risks losing control over its competitive advantage.
- Evaluating potential liability risks if AI-generated content infringes on third-party rights, including copyright, trademark, or defamation concerns. Many AI models generate content by drawing from vast datasets scraped from the internet, increasing the possibility that outputs could inadvertently replicate or reference copyrighted material, making the startup vulnerable to legal claims. The recent lawsuit against AI firm Cohere by Condé Nast and several other major publishers, alleging unauthorized use of copyrighted materials for training AI models, highlights the challenges startups may face if their AI-generated content violates existing IP rights (15).
2. Use AI as a Tool, Not the Sole Creator
Startups can strengthen their IP ownership claims by ensuring meaningful human involvement in AI-assisted creations, as copyright law requires human authorship. To increase their chances of securing ownership, startups should actively refine AI-generated outputs rather than relying on them as final products. Manually editing AI-generated content, using AI as an assistive tool rather than an autonomous creator, and combining AI-generated material with human-created content all help establish clear human authorship. Given the lack of precedent in LatAm, startups in the region should go further than their U.S. counterparts by documenting human modifications in AI-generated works, creating an evidentiary record in case of ownership disputes. These strategies not only enhance copyright eligibility but also improve legal defensibility and investor confidence in a startup’s ability to control and enforce its IP.
3. Develop Proprietary AI Models and Training Data
Startups relying on AI-generated content must secure ownership by controlling the underlying technology and data. Fine-tuning open-source AI models allows companies to customize performance while retaining control, but they must document modifications and ensure training data does not infringe on existing copyrights. Developing proprietary AI models offers even stronger protections, as startups control the dataset, architecture, and training methodologies. Proprietary datasets and algorithms can be safeguarded as trade secrets, providing exclusivity that AI-generated content alone cannot. By prioritizing ownership at the model level, startups minimize reliance on external providers, strengthen legal protections, and establish a defensible IP strategy that enhances investor confidence.
4. Bolster Ownership Claims Through Market Standard Documents
Startups should reinforce their IP protections through strong contractual agreements with employees, contractors, and business partners. Non-disclosure agreements (NDAs) prevent unauthorized sharing of proprietary AI models, datasets, and methodologies, ensuring that confidential information remains protected. Confidential Information and Invention Assignment Agreements (CIIAAs) establish that any innovation developed by employees or contractors are the property of the company, eliminating ambiguity over ownership rights. These agreements should explicitly cover AI-generated outputs, clarifying that human contributors, not external AI models, hold IP rights to the final product. Licensing Agreements with third parties must clearly define usage rights, data ownership, and the limitations on AI-generated content to avoid disputes over control and commercialization.
The Investor’s Perspective
Investors conducting due diligence on AI-driven startups will closely examine their IP protections, as unclear ownership structures pose risks that affect valuation and scalability. They will assess whether the startup owns its AI model or relies on third-party providers, ensuring that Licensing Agreements mitigate restrictions on use, access, and future scalability. Companies that develop proprietary models or fine-tune open-source frameworks hold a stronger position than those dependent on external APIs with uncertain long-term access.
Beyond model ownership, investors will scrutinize whether the startup’s AI-generated outputs are legally protectable or susceptible to replication. Given the limitations of copyright and patent protections for AI-assisted works, startups must implement structured IP strategies, such as securing proprietary datasets, integrating human authorship in content creation, and ensuring that contractual safeguards reinforce ownership claims.
Conclusion
AI is reshaping industries on a global scale, but regulatory frameworks in LatAm have yet to catch up. The lack of established regulations on AI-generated IP leaves founders in the region facing significant uncertainty when protecting their innovations, making it essential for startups to take proactive steps to secure their IP. This isn’t just a precaution—it’s a competitive advantage. Companies that structure their AI usage strategically, negotiate strong contractual protections, and align their business models with evolving regulations will be best positioned to scale, attract investment, and expand internationally. In LatAm’s fast-moving AI ecosystem, waiting for regulatory clarity is not an option—founders must act now to safeguard the future of their innovations.
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This article is not meant to provide legal advice. It should be understood as a provocative, simplified overview to allow the reader to better consult its legal advisors. Every individual, every company, and every situation is different. There is no “one size fits all” solution. Readers are advised to seek professional advice before acting on any information contained in this article. The author and publisher are not liable for any damages or negative consequences arising from any use of the information presented in this article.
