Company claiming ownership of AI-assisted code I wrote on personal time with personal subscriptions

IP attorney here with experience in both employment law and technology licensing. This thread raises a genuinely novel legal question that courts have not yet fully addressed.

The employer argument that AI-generated code is a derivative work of company code because the AI tool may have seen company files as context is legally weak. Under 17 U.S.C. Section 103, a derivative work must be based upon a preexisting work in a way that incorporates protectable expression. The fact that an AI tool was running while a company file was open does not mean the output incorporates any protectable expression from that file.

However, the commingling argument has slightly more traction if the developer used the same AI conversation or context window for both work and personal projects. If company code was in the AI context when personal project code was generated, there is at least a theoretical argument that the output was influenced by company IP. Proving this would be nearly impossible, but it creates enough uncertainty for employers to use as a negotiating tactic.

My recommendation for developers: use completely separate AI tool instances for work and personal projects. Different accounts, different sessions, never mix them. This creates a clean separation that eliminates the commingling argument entirely. And if you are in California, respond by citing Labor Code Section 2870 explicitly, which voids contractual provisions that attempt to assign qualifying inventions to the employer.

AI-generated content copyright is still unsettled. The Copyright Office has said AI output without meaningful human creative input can't be copyrighted. But if you substantially modify or curate the AI output, there might be a human authorship argument.