Your Agency Uses AI For Client Work - Who Owns The Result?

Creating something for a client is usually pretty straightforward. They tell you what they want, you deliver the work and they pay you. Easy.

However, with AI thrown into the mix, questions around ownership can get a little trickier. If you've used AI to help create something for a client, who actually owns the final work?

The answer can depend on a few things, including how AI was used, the level of human input involved, what your client contract says and the terms of any AI tools you've used.

AI-Assisted Work Isn't All The Same

AI-assisted work tends to get lumped into one category. However, there can be a big difference between using AI as a tool and relying on it to create the finished product.

For example, you might use AI to brainstorm an initial idea before creating the final work yourself. You might take AI-generated content and substantially change it, or you might use an AI-generated output largely as it is.

That distinction matters when it comes to copyright. Under US copyright law, copyright protection requires human authorship. This doesn't mean using AI automatically prevents a body of work from being protected. If AI assists someone in creating a work, the human-created elements may still qualify for copyright protection.

However, purely AI-generated material isn't protected by copyright in the same way. The US Copyright Office has also taken the position that, with currently available technology, prompts alone generally aren't enough to give the person writing them copyright in the resulting AI output. Creative human modifications, or the selection and arrangement of AI-generated material, may still be protected where they meet the usual copyright requirements.

For an agency, this matters if you've promised to transfer ownership of the finished work to your client. You can only transfer copyright that actually exists and that your agency has the right to transfer.

What Does The Client Actually Own?

When you hand over the final work to a client, it might seem simple to say they now own it. In reality, there can be a few different layers sitting behind the finished product.

A deliverable might include work created by your team, AI-generated elements, assets supplied by the client and third-party material such as stock images, fonts or software. Your agency might also have used its own templates, frameworks, workflows or code along the way.

Not all of these things will necessarily have the same ownership position. Some IP may be transferred to the client, some material may only be licensed for them to use, while your agency may want to keep ownership of the tools and materials it uses across different projects.

AI adds another layer. If you've used an AI tool to create part of the work, you'll also need to look at that platform's terms.

For example, Canva's current AI terms generally provide that, as between you and Canva, you own your AI output to the extent permitted by law. However, there are exceptions, including where an output incorporates or modifies certain Canva licensed content. This means that being able to use an AI output isn't necessarily the same as having exclusive copyright ownership over everything in it.

Before telling a client they will own everything in the final deliverable, it's worth understanding exactly what has gone into the work and which rights your agency can actually pass on.

How To Deal With AI In Your Client Agreement

Once you know what is going into your client work, one of the main ways to manage these issues is through a clear Marketing Service Agreement or other client agreement that reflects how your agency actually operates.

Your agreement should be clear about what the client will own and what your agency will keep. For example, the client might receive ownership of certain final deliverables while your agency continues to own the templates, systems, frameworks or other background material it uses across different projects. Third-party or licensed material may need to be treated differently again.

AI use can also affect the promises you make about the work itself. Agency agreements may contain warranties or other promises around ownership, originality and third-party rights. If AI forms part of your creative process, be careful about making broad promises that don't reflect what you can actually verify or transfer.

Your agreement can also set expectations around AI use from the start. Depending on the project, this might cover whether your agency can use AI tools, whether certain uses need client approval and how confidential client information can be handled when using third-party platforms.

It's also worth finding out whether the client has its own rules around AI. A client may be comfortable with AI being used for brainstorming or internal processes but place limits on its use in final deliverables or with confidential information. Sorting this out before work begins is much easier than discovering a restriction once the project has already been created.

You don't necessarily need to fill your contract with lengthy AI clauses. The important thing is that the agreement reflects how your agency actually creates its work and clearly sets out what each side is getting.

What If Your Staff Or Contractors Use AI?

A clear client agreement is only part of the picture. Your agency also needs to make sure it has the rights it has promised to pass on.

This is particularly important when freelancers or independent contractors create client work. In the US, simply paying a contractor to create something doesn't automatically make your agency the copyright owner.

Work created by an employee within the scope of their employment will generally be treated as a work made for hire. The rules for independent contractors are more limited. A commissioned work only qualifies as a work made for hire if specific legal requirements are met, including that it falls within one of the categories recognised by copyright law and is covered by the required written agreement.

If those requirements aren't met, the agency may instead need a written IP Assignment Agreement or an appropriate IP assignment in the contractor agreement to obtain the copyright it needs.

AI adds another practical issue. A freelancer might use an AI tool to generate part of a design without telling you, or an employee might put confidential client information into a tool that hasn't been approved by the agency. Someone could also introduce AI-generated or third-party material without the agency knowing what terms apply.

Your contractor agreements and internal processes should therefore line up with what you've promised your clients. An AI Acceptable Use Policy can also help set clear rules around approved tools, confidential information, how AI can be used for client work and when human review is required.

For significant client projects, it may also be useful to keep a basic record of how AI was used. Knowing which tools were involved and which parts of a deliverable were AI-generated, substantially edited or created by your team can make it easier to work through ownership questions later.

The goal isn't necessarily to stop your team from using AI. It's to make sure your agency knows how it is being used and has the rights and processes it needs to deliver what it has promised the client.

Getting AI And Client Ownership Right

AI doesn't mean agencies can no longer give clients clear ownership rights. However, it can make a blanket clause saying the client "owns everything" too simple for the way modern agency work is actually created.

If your agency uses AI, start by understanding what goes into your deliverables and what rights come with each part. Your client agreement can then clearly set out what the client receives, what your agency keeps and how AI can be used. Your contractor agreements and internal AI policies can help make sure the people actually doing the work follow the same rules.

Getting this clear from the start can help your agency use AI without creating unnecessary uncertainty over who owns what.

If you're unsure whether your current agreements reflect how your agency uses AI, you can reach us at (888) 449-8437 or team@sprintlaw.com for a free, no-obligations chat.