Can AI companies use copyrighted material without permission?

The debate around AI and copyright is only getting more heated. But what does it actually mean for small business owners?

AI tools can generate content, streamline business processes and analyse large amounts of information in seconds. But a much bigger question is how these tools are built in the first place. Many AI models are trained on enormous amounts of data, which may include books, articles, artwork, photographs, music, software code and other copyrighted works. Many creators argue they never gave permission for their work to be used - and may not even know it has been used at all.

That raises an important legal question: can AI companies use copyrighted material to train their models without the creator's permission?

If you've invested time and money creating original content for your business, this debate isn't just about technology - it's about your intellectual property. In this article, we'll explain what the AI copyright debate means, how it could affect your business, and what practical steps you can take to help protect your work.

What Is The AI Copyright Debate?

To understand the debate, it helps to first understand how generative AI works.

Many AI models are trained using enormous datasets that can include books, news articles, blog posts, photographs, artwork, music, videos, software code and other forms of content. During training, the AI analyses patterns and relationships across this material so it can later generate text, images, code and other outputs in response to user prompts.

For example, imagine an illustrator has spent years creating a distinctive portfolio of digital artwork and shares it online. If those images are included in an AI training dataset, the model may learn patterns from them - alongside millions of other works - to help generate new images in response to users' prompts. The illustrator may never have given permission for their work to be used in that way, and may not even know it happened. That is one of the central issues driving the current copyright debate.

One reason this issue has become so contentious is that copyright laws were developed long before generative AI existed. As a result, courts and governments are now grappling with how existing copyright principles should apply to AI training. AI companies argue that analysing copyrighted material to train models is transformative and different from reproducing or distributing the original work. Many creators, on the other hand, argue that copying copyrighted material for AI training should still require permission or a licence.

Because different countries have different copyright laws, there isn't a single answer to whether AI training is lawful. In Australia, there is currently no legislation that specifically authorises or prohibits the use of copyrighted works to train AI models. Instead, existing copyright laws continue to apply while governments, courts and industry consider whether reforms are needed.

In July 2026, the Australian Government announced it is developing a new framework aimed at giving copyright owners greater control over whether their work can be used to train AI systems and how they may be compensated. Announcing the proposal, Prime Minister Anthony Albanese said:

"No company should use Australian books, music, art or news to build or train AI without the artist's control."

While the details of any legislative reforms are still being developed, the announcement signals that AI copyright reform is now a clear policy priority. Until any changes are enacted, businesses and creators should continue to comply with Australia's existing copyright laws while keeping an eye on future developments.

How Could The AI Copyright Debate Affect Your Business?

It's easy to think the AI copyright debate only affects bestselling authors, major news organisations or well-known artists. But many small businesses create valuable original content every day.

Your website copy, blog articles, product descriptions, branding, graphics, photographs, online courses, software, client resources and marketing materials are all forms of intellectual property that may be protected by copyright or other intellectual property laws. In many cases, these assets are among your business's most valuable commercial assets.

If your business publishes content online, it's possible that some of it could be included in datasets used to train AI models. Whether that use is lawful is one of the key questions currently being considered by courts and governments around the world.

So, does protecting your intellectual property still matter if AI models might use it?

Yes - but perhaps not for the reason you expect.

Copyright, trade marks and well-drafted contracts remain essential for protecting your business, proving ownership of your work and enforcing your rights where infringement occurs. While they may not necessarily prevent AI companies from using copyrighted material to train their models under current law, they put your business in a much stronger legal position if your intellectual property is copied, misused or becomes the subject of a dispute.

As the law surrounding AI continues to evolve, protecting your intellectual property remains one of the best ways to safeguard the value you've created. Strong legal foundations today will put your business in a better position, regardless of how the legal landscape develops.

How Can Businesses Better Protect Their Intellectual Property?

While no legal strategy can currently guarantee that your work won't be used to train AI models, there are practical steps you can take to better protect your intellectual property and strengthen your legal position.

One of the most important steps is understanding who owns your intellectual property. If you engage employees, freelancers or contractors to create content, designs, software or other creative works for your business, your contracts should clearly state who owns the resulting intellectual property. Without the right contractual provisions, ownership may not always be as straightforward as you expect.

As AI tools become more common in creative and technical work, it's also worth considering whether your agreements address the use of AI during the creation process. For example, businesses may wish to clarify whether AI can be used when producing work, who owns any resulting intellectual property, and what level of human review is expected before work is delivered.

It's also worth considering whether your business should register a trade mark. While copyright protects original creative works, a registered trade mark helps protect your brand identity, including your business name, logo and slogan, and gives you stronger rights if someone uses similar branding.

Your Website Terms and Conditions can also help establish how visitors may access and use the content on your website. While these terms may not prevent AI companies from training their models on publicly available content, they can still play an important role in protecting your broader intellectual property rights and setting expectations around the use of your material.

If your business develops valuable ideas, software, client information or other commercially sensitive material that isn't intended for public release, it's equally important to protect that information through confidentiality agreements and appropriate internal policies. Keeping certain information confidential may provide legal protections that copyright alone cannot.

Finally, keep good records of your work. Saving drafts, design files, source code and other evidence showing when your content was created can make it much easier to establish ownership if a dispute ever arises.

While none of these steps necessarily prevent AI companies from using copyrighted material to train their models under current law, they remain an important part of protecting your intellectual property. They help clarify ownership, strengthen your legal rights and place your business in a much stronger position as the law surrounding AI continues to evolve.

Can I Stop AI Companies Using My Content?

At the moment, there is no simple or universal way to stop AI companies from using publicly available content to train their models.

Some businesses assume that adding restrictions to their website or using technical measures, such as a robots.txt file, will prevent AI systems from accessing their content. While these measures may influence how some AI companies collect data, they are not a guaranteed solution and do not universally prevent AI training.

Some AI developers have introduced voluntary opt-out mechanisms that allow website owners or creators to request that certain content is not be used for future model training. However, these systems vary between providers, may not apply retrospectively, and there is currently no industry-wide standard.

Licensing arrangements are also beginning to emerge. Some publishers, media organisations and other copyright owners are entering into agreements that allow AI companies to use their content in exchange for payment or other commercial terms. While these arrangements are currently more common for larger organisations, they may influence how AI training is managed more broadly in the future.

The growing number of legal disputes around the world also highlights how unsettled this area remains. For example, The New York Times has brought legal proceedings against OpenAI and Microsoft, alleging its copyrighted journalism was used without permission to train AI models. OpenAI and Microsoft deny the allegations, and the case is ongoing. Along with several other lawsuits around the world, the outcome could help shape how copyright laws apply to AI in the future.

For now, the legal position remains uncertain. Courts around the world are continuing to consider whether AI training requires permission from copyright owners, while governments are exploring whether copyright laws should be updated to better address generative AI.

If your business creates valuable original content, it's worth keeping an eye on these developments. As the law evolves, businesses may have more certainty about their rights-and potentially more options for controlling how their intellectual property is used.

What If I'm Using AI In My Own Business?

The AI copyright debate doesn't just affect businesses that create original content - it also affects businesses that use AI tools every day.

If you're using AI to help draft emails, write marketing copy, generate images or assist with coding, it's important to remember that you're still responsible for how that content is used. AI can be an incredibly useful business tool, but it doesn't remove your legal obligations.

Before entering information into an AI tool, think carefully about whether it contains confidential or commercially sensitive information. Customer data, trade secrets, internal business strategies and other confidential material should generally not be shared unless you're confident the platform's terms allow for it and appropriate safeguards are in place.

It's also important to review AI-generated content before publishing or relying on it. AI can produce inaccurate information, and in some cases, outputs may resemble existing copyrighted works. While that doesn't automatically mean copyright has been infringed, you shouldn't assume AI-generated content is free from legal risk simply because it was created by a machine.

As more businesses incorporate AI into their day-to-day operations, it's also worth considering whether you need an AI Use Policy. A well-drafted policy can help employees understand when AI tools can be used, what information should never be entered into them, how AI-generated content should be reviewed, and who is responsible for approving it before it's shared externally. Having clear internal guidelines can help reduce legal and operational risks while ensuring AI is used consistently across your business.

Finally, take the time to understand the terms and conditions of the AI platforms you use. Different providers have different rules around ownership, permitted use, data retention and how user prompts or content may be used to improve their services. If you're unsure how AI fits within your intellectual property, privacy or confidentiality obligations, seeking legal advice can help clarify your rights and ensure your business is using AI safely and effectively.

Like any business tool, AI should be used thoughtfully and alongside appropriate legal safeguards. By putting clear policies in place and understanding the legal implications of how AI is used within your business, you can take advantage of its benefits while better managing the risks.

What's Next For Businesses?

The AI copyright debate is far from settled. Around the world, courts are continuing to consider lawsuits against AI developers, and Australia's proposed reforms are still being developed. Exactly what any new framework will look like remains uncertain, so businesses should continue monitoring developments while focusing on the legal issues they can control.

For now, businesses should focus on what they can control. Protect your intellectual property, make sure ownership of your creative assets is clear, review how AI is being used within your business, and put the right legal foundations in place through well-drafted contracts, trade marks and appropriate website terms. These steps remain valuable regardless of how AI laws evolve.

If your business creates valuable original content or relies heavily on intellectual property, it's worth seeking legal advice to understand your rights, review your legal documents and ensure your business is well positioned as this rapidly evolving area of law continues to develop.

If you would like a consultation on AI and your small business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligation chat.