A company commissions an AI-assisted advertising campaign, an Israeli developer uses a generative coding tool, or an employee prepares product imagery with AI. Who may publish, modify, license or sell the resulting material? For foreign businesses engaging Israeli employees and contractors, the answer involves more than the AI platform’s statement that a user “owns” the output. The starting point is whether any part of the final material qualifies for copyright protection and, if so, who owns the relevant rights under Israeli law and the parties’ contracts.
Israel’s Copyright Law, 5768-2007, contains rules for employee-created works, commissioned works, copyright assignments and licences. It does not expressly establish a separate ownership regime for autonomously generated AI output. Contractual rights to use a file, the existence of copyright in that file and permission to incorporate third-party materials are distinct questions.
Can AI-Generated Content Be Protected by Copyright in Israel?
The essential inquiry is whether the output contains original expression attributable to human creative activity. An employee who meaningfully selects, arranges, rewrites or edits AI-produced material may contribute protectable expression. A user who merely asks a system to “generate a futuristic city image” and accepts its first output presents a more difficult ownership claim.
The legal position in Israel remains unsettled for output generated largely autonomously. Israeli legislation does not specifically identify the author of AI-generated works, and no settled Israeli rule establishes that giving prompts alone makes the user the copyright owner of every resulting image, passage or sound recording. It would be misleading to assure a client that all generated output is automatically protected or exclusively owned by its account holder.
A business should distinguish the elements it can identify as human-authored from machine-generated elements, including original selection and arrangement of material. Eligibility for copyright protection and the allocation of ownership are separate stages of analysis.
Who Owns the Output: The User, the AI Provider or the Developer?
The person using a generative AI system may be the most obvious candidate to claim authorship of human-created elements, but holding the account or entering instructions does not alone resolve copyright ownership. Developing the AI platform likewise does not ordinarily make the software provider the author of each piece of content produced by its users.
The developer may own rights in the platform’s software and other proprietary components. The provider’s terms may allocate contractual permissions in generated output or reserve rights relating to inputs, service operation and data handling. Neither the user nor the provider can create a copyright in material that does not meet statutory protection requirements simply by describing it as “owned” in contractual terms.
When advising a foreign customer procuring AI-assisted content from an Israeli supplier, counsel should review the relevant platform terms for the specific account, service tier and date of use, rather than rely on a general claim about ownership made in marketing materials.
Copyright Ownership in Israel: The Statutory Starting Point
Section 33 of the Israeli Copyright Law states the general rule that the author is the first owner of copyright, subject to the statutory exceptions. Sections 34 and 35 address employee-created and commissioned works, and Section 37 addresses copyright transfers and licences. These provisions are useful only to the extent that a protectable copyright work and identifiable rights exist.
For a work incorporating substantial human creativity, the next question is whether the relevant contributions arose within employment, were commissioned from an independent contractor or were subsequently transferred under contract. A party that lawfully holds one set of rights may still lack authority to reproduce underlying third-party content.
For the broader rules on first ownership, see Copyright Ownership in Israel.
AI-Generated Content Created by Employees
Under Section 34, an employer is generally the first owner of copyright in a work created by an employee for the purposes of and in the course of employment, unless otherwise agreed. Accordingly, where an Israeli employee makes an original human contribution to advertising copy, design elements, software or a presentation in the course of assigned duties, the employer may own the copyright in that protectable contribution.
This statutory rule should not be read as converting every AI output produced on a corporate account into copyrighted property. If the relevant output lacks sufficient protectable human expression, there may be no copyright in that output to vest in the employer. The business may still have contractual usage rights and rights in confidential inputs or pre-existing company materials.
Cross-border employment arrangements deserve particular attention. The contractual framework and applicable law, employment status, scope of duties, pre-existing materials and contribution of team members should be documented. The nationality of an employee or the location of the AI server does not by itself answer all questions about ownership of a work exploited in Israel.
AI Content Commissioned from an Israeli Freelancer or Agency
Section 35 generally provides that the creator is the first copyright owner in commissioned works, unless the creator and commissioning party expressly or impliedly agree otherwise, subject to specific statutory exceptions. Merely paying an Israeli design studio for an AI-assisted logo, animation or marketing campaign does not automatically establish that the foreign customer owns all relevant economic rights.
A commissioned-work agreement should distinguish original human work created by the contractor, AI-generated components, the customer’s pre-existing materials and licensed third-party assets. It should describe which rights are transferred, which uses are licensed, who may modify the deliverables, what source files must be supplied and whether the contractor may reuse or display the work in its portfolio.
The contractor should not be required to warrant that it owns copyrights that cannot legally exist. A more precise arrangement identifies protectable elements, assigns those rights where possible, secures necessary permissions and separately governs use of the remaining output. For contractual questions involving creative suppliers, see Commissioned Creative Content Agreements in Israel.
Can Multiple People Be Joint Authors of an AI-Assisted Work?
Israeli copyright law defines a joint work as one created collaboratively by several authors where the respective contributions cannot be distinguished. Several employees contributing original expressive elements to a final AI-assisted work may raise a joint-authorship issue. Participation in a project, funding its development or supplying general ideas does not automatically establish joint authorship.
Where different contributions remain separable, such as independently written text, photographs and music, the business may instead require licences or assignments in multiple works. This distinction matters when a foreign client asks whether one contractor’s signature clears the entire finished product.
Does Writing a Prompt Establish Copyright Ownership?
A detailed prompt may itself contain original human-authored expression. That does not necessarily make its writer the author of every expressive feature subsequently generated by a model. The prompt, the resulting output and human alterations to that output should be considered separately.
For example, a designer may use prompts to develop alternative visual concepts, then manually compose, retouch and add original elements to the chosen result. The manually created composition and modifications may present a stronger authorship claim than the unedited generated image. Evidence of creative control matters more than the sheer number or length of prompts.
The US Copyright Office’s January 2025 report on the copyrightability of generative AI output concluded that human-authored contributions may qualify for protection, whereas the provision of prompts alone does not necessarily establish sufficient control over the final expressive elements. This is a US position, not an Israeli statutory rule, although it provides useful comparative context for multinational businesses. In Thaler v. Perlmutter (D.C. Circuit, 18 March 2025), the court likewise addressed the US human-authorship requirement where AI was identified as the sole author.
What Do AI Platform Terms Actually Give the Customer?
A platform may contractually authorize commercial use, purport to assign whatever rights it holds in the output or impose restrictions tied to the service plan. Those promises govern the relationship under the applicable contract, but do not guarantee copyright protection in every output or extinguish claims held by unrelated third parties.
Terms may also address retention of prompts, reuse of inputs, training on uploaded content, confidentiality, indemnities and the platform’s ability to generate similar results for other users. If an Israeli contractor uses its own account, the foreign customer should verify whether that account’s terms permit the intended commercial exploitation and whether the contractor can pass the relevant permissions to the customer.
Terms can change. The agreement should require the contractor to disclose the tools used, preserve the relevant terms and avoid unapproved services for confidential or restricted material.
Can a Customer Obtain Exclusive Rights in AI-Generated Output?
Exclusive copyright rights can be transferred or exclusively licensed only where legally protected rights exist and the party granting them is entitled to do so. Section 37 permits assignments and licences, with a written instrument required for copyright assignments and exclusive licences.
If an output is not protected by copyright because it lacks sufficient human authorship, a contract cannot create an exclusive copyright enforceable against the public. The parties may nevertheless agree on confidentiality, restricted reuse, delivery of particular assets, non-disclosure of prompts and a supplier’s obligation not to distribute the same deliverables to others. Those contractual obligations do not necessarily bind third parties who are not parties to the agreement.
Accordingly, requests for “full and exclusive ownership of all AI output” should be broken down into the actual interests the client needs to secure: ownership of human-created components, rights to use underlying content, control of confidential information and restrictions on the supplier’s future conduct. See Copyright Assignment and Licensing in Israel.
How Should a Supplier Agreement Allocate Rights and Risks?
For a foreign company engaging an Israeli agency, the agreement should identify the approved AI systems, permitted uses and the division between customer-provided material, supplier-created human expression and generated output. It should specify which rights are assigned or licensed and which permissions the supplier must obtain for stock images, music, fonts, training material or other third-party components incorporated into the final product.
The agreement can also regulate delivery of editable source files, prompt records where commercially appropriate, design iterations, approval procedures, confidentiality, handling of personal information, permitted subcontractors, termination and subsequent use of the materials. Representations and indemnities should be framed around identifiable obligations and risks rather than promises that every AI-generated result is inherently copyrightable or uniquely available to the client.
How Can a Business Prove Human Creative Contribution?
Source files, drafts, edit histories, design layers, human-written code, annotated versions and records of original decisions may help demonstrate which elements of a finished product reflect human creativity. Prompt histories can give useful context, but a long sequence of prompts does not, on its own, establish authorship of the generated expression.
When preparing for a licensing transaction, investment or dispute, businesses should be able to distinguish materials created by employees, commissioned work, third-party content and machine-generated components. This is also relevant in copyright due diligence for acquisitions involving Israeli companies.
What if the AI System Uses the Customer’s Own Materials?
Foreign businesses often provide an Israeli contractor with logos, photographs, designs, product specifications, software code or unpublished marketing plans for use with AI tools. Those pre-existing assets remain subject to their original ownership and licensing arrangements. The creation of new AI-assisted output does not, by itself, transfer rights in the original source materials.
Contractual safeguards should address whether input materials may be uploaded to a particular service, who may access them, how long they are retained, whether they may be used for model training and what happens to them at the end of the engagement. Trade-secret obligations, confidentiality, personal-data rules and contractual restrictions may be material even if the resulting output is not independently protected by copyright.
Israeli Law Compared with the United States and the United Kingdom
Israel has no express statutory rule identifying the author or owner of a wholly autonomous AI-generated work. Its existing rules concerning authors, employees, commissioned works and transfers must be applied to any protectable human contribution. The absence of specific legislation leaves uncertainty over output with little or no human creative involvement.
US copyright law, as administered by the US Copyright Office and interpreted by the courts, requires human authorship for the protected material. The United Kingdom has a distinct statutory provision dealing with certain computer-generated literary, dramatic, musical and artistic works without a human author, attributing authorship to the person making the arrangements necessary for creation. The application of that provision to contemporary generative AI remains a separate UK-law question.
Multinational businesses should not assume that an assignment or authorship assessment in one jurisdiction produces the same result everywhere. The intended markets, applicable contractual law and the rights actually asserted need to be distinguished.
Does the Absence of Copyright Mean the Output Is Free to Use?
No. AI-generated material may reproduce protected third-party expression, depict a protected brand, incorporate a registered design or create risks concerning privacy, publicity, confidential information or contractual restrictions. A permitted commercial use under one platform’s terms does not amount to universal clearance of all third-party rights.
Businesses should assess the provenance of important source materials, the proposed use and relevant permissions before using AI output in advertising, product packaging, software or media distributed in Israel. The ownership question is only one part of the legal clearance process.
Commercial Use of AI-Generated Content in Israel
Before publishing or acquiring AI-assisted content, a company should identify the human contribution, verify the platform terms, confirm ownership of input materials and agree expressly on the customer’s permitted uses and supplier obligations. In employee arrangements, internal AI policies should complement ordinary employment and IP provisions. In external commissions, a clearly scoped contractual allocation is more useful than a broad but legally uncertain promise of copyright ownership in every generated output.
For related advice on ownership, licensing and enforcement, see the firm’s copyright practice. Drori-Stav IP advises companies and foreign counsel on copyright issues arising from Israeli creative, software and technology transactions.
