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Intellectual Property Protection for AI-Generated Output

Author

Listed:
  • Döttling, Robin
  • Emery, Logan P.
  • Zhao, Shuo

Abstract

We model firms' innovation investment when generative AI can lower investment costs, but only sufficient human input qualifies for IP protection and AI use is unobservable. We characterize the IP system's effect on incentives using two edge cases: when the IP system can "kill" AI use and when low AI costs can "kill" the IP system. If consumers value human-developed products, human-capital use is distorted by adverse selection. The IP policy can mitigate this by acting as a signal of incentives for human-capital use that triggers a feedback loop through consumer beliefs, or by deterring high-cost firms' investment.

Suggested Citation

  • Döttling, Robin & Emery, Logan P. & Zhao, Shuo, 2026. "Intellectual Property Protection for AI-Generated Output," CEPR Discussion Papers 21399, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21399
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    File URL: https://cepr.org/publications/DP21399
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    Keywords

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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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