Generative AI & Intellectual Property FAQ in Canada

GenAI can create a wide variety of output based on input received from the user.

GenAI has no singular moment of invention; its lineage traces back to early statistical models emerging as far back as 1906. ChatGPT was among the first systems to achieve widespread public recognition, catalyzing the development of other major platforms such as Google’s Gemini, Microsoft’s Copilot, MetaAI, and Claude.

First, it is important to define what artificial intelligence is. Artificial intelligence refers to computational systems that perform tasks requiring human-like intelligence, including pattern recognition, decision-making, and learning. It is generally divided into three forms: Artificial Narrow Intelligence, Artificial General Intelligence, and Artificial Superintelligence. Artificial Narrow Intelligence is the only form that currently exists; and it performs specific, well-defined tasks.

GenAI, therefore, is a form of Artificial Narrow Intelligence. Although GenAI tools like ChatGPT and Gemini can code, write poems, and analyze text, they operate within strict technical parameters. At their core, GenAI tools are built upon large foundation models, that is, large general-purpose systems trained on huge mixed datasets, often including publicly available information. These broad models act as the base that more specialized tools are later built on.

GenAI can be used in a variety of different ways depending on the context and user’s needs. Below is a non-exhaustive list of some of the ways GenAI tools have been reported to be used:

In brief, GenAI tools can be used in a vast number of different ways. In addition, with continuing advances in these models, the ways in which GenAI tools can be used appear to be increasing and becoming increasingly more diverse and creative.

Despite the numerous ways GenAI tools can be used to assist users, they have several limitations that users should be aware of. First, because of the variety of sources that are used to train these models, it is possible that the output it provides contains errors or biases. Second, GenAI tools frequently do not provide sources for the information contained in their output, and if asked to do so, sometimes provide inaccurate or incorrect sources. Other limitations of GenAI tools to note include their potential inaccuracy, lack of logical reasoning, inability to understand context, as well as the usage limits for the free version of the respective model.

While not exhaustive, these limitations highlight just some of the reasons why these models typically have several disclaimers in their Terms of Use related to their services, including that:

In general, GenAI tools collect data from users in order to further train the model and improve their performance. GenAI tools collect data such as user input, chat history, and user preferences from the user. Conversations between GenAI tools and the users are reviewed both by AI trainers to improve their systems and are reviewed to ensure that the content complies with the relevant company’s policies and safety requirements. Users of GenAI tools can see a history of their conversations within the interface, and although specific prompts cannot be deleted from the history, users are able to delete their data following the process laid out on the service.

GenAI tools do not actively seek out personal information to train their models, but personal information is incidentally included at times.

The personal information collected by GenAI tools is used for a range of purposes, and the amount of data gathered often depends on the user’s subscription model. This information can be used to build behavioral profiles, and in some cases, it is stored for customer support, security, and auditing functions. Although GenAI providers implement policies such as data-minimization and anonymization to limit the use of personal information, these tools do not take a proactive approach to addressing data aggregators or unlawful web scraping. As a result, it is unclear whether all data used to train these systems was lawfully obtained, for example, OpenAI is currently involved in significant legal disputes over data sourcing.

GenAI tools are used to describe software that can produce output in various forms, such as text, images, and audio, based on input from a user. GenAI technologies have become increasingly popular in recent years, and due to their accessibility and the quality of output they are able to potentially produce, they are frequently used in both private and commercial contexts to create, or assist in creating, a variety of different works.

Some of the key questions regarding the intersection of intellectual property law and the use of technologies such as GenAI, therefore, include who owns the output that is created by GenAI, whether the output could be the subject of a copyright or trademark infringement claim, and to what extent can GenAI be used in the process of logo creation and branding of a business. This section of the FAQ will explore these questions.

It is currently unclear who owns the copyright to content generated by an AI model, such as the output from GenAI tools. Because the Canadian Copyright Act (the "Act") does not explicitly address generative AI creation, many copyright issues pertaining to AI-generated content remain unresolved. One of the key issues in this space is whether the user can be considered an author for the purposes of the Act, or whether the AI program itself should be granted authorship. Without authorship, there is also no corresponding ownership for copyright purposes.

This issue of authorship and ownership arises because it is unclear whether the user, by providing the input, would satisfy the requirement that under Canadian copyright law, a work must be original. To be original, the creation of a work must be the result of an exercise of both skill and judgement. Due to the current lack of clarity, the issue of authorship may ultimately be settled based on the degree of human involvement in the process to create the output.

Notably, the Canadian Intellectual Property Office (“CIPO”) registered a copyright for a painting titled “Suryast,” listing an artificial intelligence painting app as one of its authors. In July 2024, the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic challenged the registration, arguing that the work does not meet the originality requirement and that AI cannot qualify as an author. As of this publication, the matter is currently moving forward with the Federal Court, leaving the question of copyright authorship for GenAI-generated works in Canada unresolved.

In the 2023 Consultation on Copyright in The Age of Generative Artificial Intelligence (the "Consultation") published by the Government of Canada, the topics of authorship and ownership of AI-generated works were discussed at some length. The Consultation highlights that although the Act does not define "author," jurisprudence suggests that authorship is attributed to a natural person who exercises skill and judgement in creating the work.

The government sought the views of stakeholders on three approaches to authorship and ownership of AI-generated works:

Ultimately, and unsurprisingly, the technology sector diverged sharply from individual creators on how GenAI intersects with copyright law. Whereas creators emphasized the need for licensing and consent for text used in data mining, while technology stakeholders maintained that such text-mining does not infringe copyright. There was also no agreement on whether Canada’s current copyright framework is adequate or who should bear liability for infringement: developers, deployers, users, or all the above. Stakeholders did, however, converge on two points: the need for clearer rules, and the principle that human authorship should remain central to copyright protection, while still allowing flexibility for creators to use AI tools.

The patentability of GenAI output remains largely unsettled. One case offers useful clarification: the case of Dr. Stephen Thaler. Thaler sought patent protection in multiple jurisdictions, naming his AI system, designed specifically to invent, as the sole inventor. CIPO issued a non-compliance notice for the patent application, and Thaler’s subsequent appeal to the Patent Appeal Board (“PAB”) was unsuccessful. The PAB held that an “inventor” must be a “natural person” or “persons,” meaning AI cannot be recognized as an inventor. Of course, inventions developed with the assistance of AI may still be patentable where there is sufficient human contribution.

Most GenAI tools contractually grant users ownership of output they create through their Terms of Service. OpenAI, for example, states the following in its “Content” section of the Terms of Use: “Ownership of content, as between you and OpenAI, and to the extent permitted by applicable law, you (a) retain your ownership rights in Input and (b) own the Output. We hereby assign to you all our right, title, and interest, if any, in and to Output.” Therefore, it appears that OpenAI does assign the rights to the AI-generated content to the user.

However, the language of “to the extent permitted by applicable law” adds uncertainty, especially given the lack of clarity in copyright law. Furthermore, it is possible that no rights are actually assigned if ownership is settled “as between you and OpenAI,” as stipulated by the Terms of Use.

Yes. As outlined in the Copyright Act, s. 27, “it is an infringement of copyright for any person to do, without the consent of the owner of the copyright, anything that by this Act only the owner of the copyright has the right to do.” This includes selling, distributing, exhibiting, or otherwise reproducing a copyrighted work.

Because of the data GenAI tools rely on to generate responses, their outputs may at times be similar enough or identical to existing copyrighted material to constitute infringement.

The 2023 Consultation highlights the difficulties in establishing such a claim in Canada:

While there is no Canadian precedent yet, users are advised to review and, where appropriate, revise AI output before using it.

Canada has already seen copyright litigation against major AI companies. Both the Toronto Star Newspaper Ltd. and Vertical Scope filed suit against OpenAI for copyright infringement. In the Toronto Star matter, the court has so far ruled only on jurisdiction, confirming that the Ontario Superior Court has subject-matter and in personam jurisdiction to hear the case. No final determination has been made on the merits of the infringement claims. Vertical Scope’s action alleges copyright infringement and unjust enrichment, asserting that OpenAI used web crawlers to scrape its website without authorization, in violation of Vertical Scope’s Terms of Use.

In the U.S., however, several lawsuits have been filed:

While Canadian law differs, these cases may provide guidance. For now, several GenAI tools’ Terms of Use allow users to submit notices of claimed infringement, which may result in removal of content or termination of accounts for repeat infringers.

Yes, but caution is required. A new trademark cannot be confusingly similar to an existing one under the Trademarks Act. If an AI-generated name or logo is too close to an existing trademark, it may not be registrable and using it could result in trademark infringement.

This could lead to costly disputes or re-branding. It is recommended that users carefully review AI-generated branding and, ideally, consult an intellectual property lawyer to assess risks before adoption.

There remains much uncertainty surrounding GenAI: its inner workings, how best to regulate, and how to safeguard the privacy of those who use it. Because GenAI learns directly from the data humans produce, true confidentiality is unlikely to exist within its architecture. The implication of this is that any personal, confidential, or sensitive information input by a user may be accessed by GenAI tools and potentially appear in future outputs to other users.

Users should therefore refrain from inputting any personal, confidential, or otherwise sensitive information into GenAI tools. While it would be prudent for all users to follow this suggestion, it may be especially pertinent for users who regularly handle private and confidential information, or who have personal or ethical obligations. For example, users who are under nondisclosure agreements, who hold confidential information, trade secrets, or other proprietary information, should be especially careful to ensure that they do not use GenAI in relation to this information in a way that would lead to a loss of confidence or a breach of professional and/or ethical obligations.

Each user should be aware of, and factor in, the limitations and potential privacy concerns of GenAI tools when deciding if it is safe to use GenAI tools in their specific context. Users should also be careful to use the technology in a way that minimizes risk as discussed throughout this FAQ.

On the service side, GenAI tools employ a multi-layered security architecture across the data lifecycle to protect user privacy and system integrity. OpenAI, for instance, takes a variety of security measures related to ChatGPT. These measures include audits, data encryption, and access to a security portal which highlights many more of their security measures, including risk profiles, data security, app security, data privacy, endpoint security, policies, and so on. That said, OpenAI, like most other service providers, is susceptible to data breaches. In March of 2023, for example, OpenAI reported having a bug in their open-source library which allowed unauthorized users to see the beginning of someone else’s conversations, account details, and even the last four digits of credit cards. The possibility of a data/security breach is another factor users need to consider when determining whether ChatGPT is safe for their specific case.

On a system-wide level, although the Canadian government has not taken an explicit stance, it is important to note that in April 2023, the Office of the Privacy Commissioner (“OPC”) of Canada launched a joint investigation into OpenAI’s ChatGPT with the provincial privacy authorities of Quebec, British Columbia, and Alberta. The investigation was launched in response to a complaint alleging the collection, use and disclosure of personal information without consent.

The privacy authorities investigated, among other things, whether OpenAI:

Ultimately, British Columbia and Alberta’s Information and Privacy Commissioners found that OpenAI’s reliance on scraped data failed to meet basic consent requirements under the Personal Information and Protection Act. They also concluded that OpenAI’s investigative response was inadequate. The Commission d’accès à l’information du Québec reached similar conclusions. By contrast, the Ontario Privacy Commissioner determined that its concerns about OpenAI and ChatGPT were well founded but conditionally resolved through OpenAI’s mitigation measures.

The potential risks surrounding the limitations, privacy, and confidentiality concerns of GenAI tools have been canvassed throughout this FAQ. It would be prudent for a business that is contemplating the incorporation of GenAI tools into its operation to assess the variety of privacy-related risks that exist within its workplace and use cases, and subsequently, consider in what ways GenAI tools should be restricted in the workplace, if not prohibited.