As with most LLM provider terms of service, Anthropic’s Commercial Terms of Service confirm that when you use Claude Code:
For anyone using Claude Code to assist with software development – whether for their own purposes or for a client – Anthropic’s confirmation of ownership supported by an indemnity is good news.
So far so straightforward. A trickier question is whether your Claude Code-generated software code benefits from any IP rights, and specifically copyright, in the first place.
In this article we look at the status of copyright protection of AI-generated software code in the UK, and also briefly look at the position in the EU and in the U.S. We conclude with some practical suggestions how to manage some of the risks involved.
UK
In common with most countries the UK provides ‘standard’ copyright protection for human author-created works. Under the UK Copyright, Designs and Patents Act 1988 (“CDPA“) copyright subsists in “original literary, dramatic, musical or artistic works” (CDPA, s.1), with literary work defined to include computer programs (CPDA, s.3). The originality of a work must meet the “author’s own intellectual creation” test which derives from the EC Copyright Directive 2009, and which the UK courts have confirmed continues to apply post-Brexit. Copyright continues for 70 years from the end of the calendar year in which the author dies (CPDA, s.12).
Unlike most countries however the UK has a separate regime for the protection of computer-generated works. A computer-generated work (CGW) is defined as a work “generated by a computer in circumstances such that there is no human author of the work” (CDPA, s.178). Copyright in a CGW continues for 50 years from the end of the calendar year in which the work is made (CDPA, s12(7)).
CGW cannot, by definition, be assessed by the “author’s own intellectual creation” test applicable when considering whether human-authored works has sufficient originality to be eligible for copyright protection. There is therefore some dispute about the circumstances in which the CGW regime will actually apply. The most widely held view appears to be that copyright protection is available to a computer-generated work which would be original had it been created by a human.
Where copyright does subsist in AI-generated code under the CGW regime, authorship (which with some exceptions also means ownership) is ascribed to the person who “undertakes the necessary arrangement to create the work” (CDPA, s.9(3)). Determining who makes the necessary arrangements in the case of Claude Code-generated software may not be straightforward; if the user provides detailed and well-defined prompts there is a strong argument that they have made the “necessary arrangement” and as a result they are the author; conversely where the user only communicates a general idea or concept via prompts and Claude Code makes the key structural and expressive choices in the code it’s likely that it’s Anthropic which has made the necessary arrangement and is the author. In most circumstances this will all be academic because the IP in the code vests in the customer under Anthropic’s Terms of Service. However software developers who are using Claude Code (or any other AI coding assistant for that matter) may want to check their client contracts, including any restrictions on sub-contracting the development work to third parties and any ‘original author’ warranties.
EU
The EU provides ‘standard’ copyright protection for human author-created works, including software, much in the same way as the UK does. The EU does not however have an equivalent to the UK’s CGW regime. As a result software code generated by Claude Code without human creative control will have no IP protection at all.
Furthermore, a recent decision by a Munich court has confirmed that even when a human is involved the level of creative control that a human must contribute in order for copyright to subsist is very high. The case concerned three AI-generated logos (one created with a single, simple prompt, one with a 1,700-character prompt, and one with the design of the logo refined on an iterative basis by successive prompts), all of which were held by the court to lack sufficient human creative control in order for copyright to subsist. The court did say that it’s possible for copyright to subsist in AI generated output but only if the human-created elements forming part of the prompts are so dominant in the output that the work can be regarded as the author’s own original creation.
U.S.
In January 2025 the U.S. Copyright Office (“USCO”) published Part 2 of its Report on Copyright and Artificial Intelligence. Its conclusions and recommendations included the following:
In March 2025 the USCO’s approach to AI-generated outputs was affirmed by the U.S. Court of Appeals for the District of Columbia in Thaler v. Perlmutter. The USCO’s approach has however not yet been considered by the U.S. Supreme Court.
For the time being the position in the U.S. is therefore not dissimilar in effect to that in the EU: copyright in Claude Code-generated software code can only be registered (i.e. subsist) where and to the extent that there is sufficient human creative control.
Managing the risk
Determining whether copyright subsists in the software that Claude Code has written for you, and if copyright does subsist deciding who the owner of the copyright is, will not always be straightforward. Although the outcome will depend on which legal system applies and the factual circumstances, you may want to consider the following:
Tags: AI, claude code, coding assistants, copyright, IP, software, software code
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23/10/21 – Back in 2013 The Software Incubator was appointed by Computer Associates as a sales agent to promote and market Computer Associates’ application service automation software, which was deployed by CA’s customers to manage applications across data centres. The software was downloaded by customers directly from Computer Associates’ servers, subject to a perpetual licence which restricted use to a specified territory and a maximum number of authorised users.
The relationship was short lived, and The Software Incubator’s appointment was terminated later in 2013. The Software Incubator claimed compensation from Computer Associates under the Commercial Agents (Council Directive) Regulations 1993 (“UK Regulations”), which provides that a ‘commercial agent shall be entitled to compensation for the damage he suffers as a result of the termination of his relations with his principal’ (Section 17(6)). The UK Regulations define “commercial agent” as a ‘self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person’, but then does not provide a definition of “goods”. As you have probably already guessed, The Software Incubator and Computer Associates had different views on whether the software promoted by The Software Incubator constituted goods for the purposes of the UK Regulations, and the dispute ended up in court.
In 2018 the Court of Appeal decided, in part, in favour of Computer Associates. The Software Incubator appealed to the Supreme Court, which then referred the issue to the Court of Justice of the European Union (CJEU). In short the question for the CJEU was: Does the the supply of computer software to a customer by electronic means, together with the grant of a perpetual licence, constitute a “sale” of “goods” within the meaning of article 1(2) of the Commercial Agents Directive (Council Directive 86/653/EEC), being the original EU Directive that was implemented by the UK Regulations?
CJEU decision
The CJEU decided that:
Accordingly, the supply by Computer Associates of its software to a customer by electronic download, together with the grant of a perpetual licence constituted a “sale of goods” for the purposes of the UK Regulations, entitling The Software Incubator to compensation for termination of its sales agent appointment.
Because the question was referred to the CJEU before Brexit, the CJEU’s decision is binding on the Supreme Court.
Comment
The CJEU decision is clearly good news for sales agents which promote the supply of perpetual software licences, and probably fixed term software licences where the term is at least equal to the software’s expected economic lifespan. Less good news for software vendors, who may want to review existing arrangements with their agents and tread carefully if looking to terminate the relationships. More generally it remains to be seen to what extent the UK courts will have regard to the decision when considering the issue of whether software should be considered to be goods or services (or neither) in other contexts, particularly sale of goods legislation.
Tags: cjeu, commercial agents, computer associates, sale of goods, software, software incubator
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12/03/21 – In accordance with the Copyright, Designs and Patents Act 1988 where any work “is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work, subject to any agreement to the contrary”. (more…)
Tags: CDPA 1988, copyright, employees, IP, MD5, penhallurick, software
Posted in Technology, Updates | Comments Off on Who owns the copyright in software created by your employees?