AI-Generated Images: Copyright in Nepal

AI-generated images have no clear copyright owner under Nepal's Copyright Act, 2059 (2002). The law protects only works created by a human author. When an AI tool generates an image from a text prompt, there is no "author" under Nepali law — which means the output likely falls into the public domain the moment it's created, and anyone can use it unless another legal right attaches.

Key Takeaways

• Nepal's Copyright Act protects only human-authored works; an AI is not a legal author.
• Prompt-only AI images likely carry zero copyright protection in Nepal — anyone can copy and use them.
• Substantial human modification of an AI output can create a protectable derivative work.
• The platform's terms of service may grant you a licence to use the image commercially, but that won't stop a third party from copying it.
• Trademark and design registration with the Department of Industry offer alternative protection for AI-assisted logos and product visuals used in business.
• Full disclosure to clients and clear contracts are the only real safeguards while the law catches up.

What is an AI-generated image under Nepal's legal framework?

An AI-generated image is a visual output created wholly or substantially by an artificial intelligence tool — Midjourney, DALL·E, Stable Diffusion, Canva AI, or similar — in response to a user's text prompt. Nepal's Copyright Act, 2059 (2002) doesn't mention AI anywhere. The Act defines an "author" as the person who creates the work by their own intellectual effort. A machine is not a legal person in Nepal. So when an AI generates an image, there is simply no author to vest copyright in — and without an author, copyright cannot exist. The Nepal Copyright Registrar's Office administers the Act, and its registration system assumes a named human creator.

Who owns the copyright to an AI-generated image in Nepal?

Nobody does — at least not in the pure copyright sense — if the image was produced by AI with no meaningful human creative input beyond a text prompt. This is the position most consistent with the plain text of Nepal's Copyright Act. The World Intellectual Property Organization (WIPO) has been debating AI authorship for years, and jurisdictions globally are split. Nepal has issued no policy statement or court ruling on the question, so the safest assumption is the default: no human author equals no copyright. If you hire a graphic designer in Kathmandu who uses AI as one tool among many and the final image reflects their creative choices, then the human designer is the author and copyright vests normally. But if you type "a Tharu dancer in Madhubani style, sunset" into Midjourney and download the result, that output is likely unprotected.

How do platform terms of service affect AI image rights?

Most AI image platforms grant you a licence to use the images you generate — Midjourney's paid plan, for instance, gives you commercial rights to your outputs. But a contractual licence from a platform is not the same thing as copyright ownership under Nepali law. That licence governs your relationship with the platform, not your relationship with the rest of the world. If a competitor in Biratnagar downloads the same image from your social media and prints it on T-shirts, you cannot sue them for copyright infringement in Nepal because you don't own the copyright. Your only remedy would be against the platform if it breached its own terms — which doesn't help you against a third-party copycat. This is the single biggest misunderstanding we hear from clients.

What does Nepal's Copyright Act actually protect?

Under the Copyright Act, 2059, protection extends to original literary, artistic, musical, and dramatic works, sound recordings, and broadcasts. "Artistic work" includes paintings, drawings, photographs, and works of architecture. The Act requires originality — defined as the author's own intellectual creation — and it assumes a human author throughout. The Act also protects moral rights (the right to be identified as the author and to object to distortion) and economic rights (the right to reproduce, distribute, and communicate the work). All of these rights attach to a person. The full text is maintained by the Nepal Law Commission. When no person qualifies, none of these rights attach — and the work is free for anyone to copy, adapt, or sell.

Can a human claim copyright by modifying an AI-generated image?

Yes — and this is where the practical line is drawn. If you take an AI output and add substantial, original human creative work, the resulting image can qualify as a derivative work with its own copyright. "Substantial" is the key word. Cropping, applying a filter, or tweaking the colour temperature won't cut it. But a photographer who uses AI to generate a background and then composites it with their own original photographs, hand-drawn illustrations, typography, and hours of manual retouching has created something that reflects their own intellectual effort. That resulting composite image would likely qualify for copyright protection in Nepal, even though the bare AI output it incorporates does not. The safe practice: document every human intervention so you can show a paper trail if it's ever challenged. For tools that help you assess what's protectable, try our AI brand name generator alongside your visual asset work to keep your full IP strategy coordinated.

How do businesses protect AI-generated images used as logos or brand assets?

This is where businesses need to think beyond copyright. A logo created with AI may lack copyright, but you can still secure exclusive rights through trademark registration with the Department of Industry. Under the Patent, Design and Trademark Act, 1965, a trademark is a word, symbol, or picture used to distinguish goods or services. If you use that AI-generated image as your brand's logo and file a trademark application, the DoI examines it for distinctiveness and conflicts — not authorship. Once registered, you obtain a seven-year renewable monopoly over that mark in your NICE class, regardless of how the image was created. Trademarks run through a different legal track than copyright, and the AI-origin question simply doesn't arise in the same way. Our trademark conflict checker is a good starting point to see if your AI-assisted logo faces any obvious hurdles.

What are the common legal risks of using AI-generated images in Nepal?

A business owner in Nepal faces four main risks when relying on AI-generated images without understanding the copyright gap. First, you can't stop copying — a competitor can legally take your AI-generated product photo, packaging visual, or social-media graphic and use it themselves, and you have no copyright claim. Second, your own use might infringe someone else's copyright — many AI models are trained on copyrighted works without licence, and outputs can reproduce elements of training data. The Copyright Act's infringement provisions don't care that you used a tool; they care that the resulting image is substantially similar to a protected work. Third, client disputes are common: a freelance designer delivers AI-generated work, the client assumes they own it, and later discovers they don't. Fourth, platform terms can change overnight — the licence you relied on today may be different tomorrow. The practical rule: never put an AI-only image at the centre of a brand asset you can't afford to lose control of.

What should a Nepali business put in its contracts when AI images are involved?

Transparency and written terms are your only real protection in the current legal vacuum. If you're a designer or agency, disclose AI use upfront — tell the client which assets are AI-generated and explain that those elements carry no copyright. If you're the client commissioning work, add a clause requiring disclosure of all AI tools used and specifying that raw AI outputs are excluded from any copyright assignment. Where the brief requires original, protectable assets, require the creator to deliver layered working files that show meaningful human authorship. And if you're using AI images in a product you sell — merchandise, book covers, packaging — speak to an IP professional about whether trademark or design registration can fill the gap. The contact page is open if you want to talk through a specific scenario.

What's a realistic example of AI image use and the copyright dilemma in Nepal?

Imagine a Pokhara-based travel agency, "Himalayan Horizon Treks." Their in-house marketing person uses Canva AI to generate a stunning illustration of Annapurna at golden hour. They place it on their website, brochures, and a line of branded trekking T-shirts. A rival agency in Thamel sees it, downloads the exact image, and puts it on their own merchandise. Himalayan Horizon wants to sue. Can they? Under Nepal's Copyright Act — almost certainly not, because the image has no human author. The agency never modified it beyond the AI output, and Canva's terms of service give a licence but no copyright. The rival faces no legal consequence. If Himalayan Horizon had instead asked a local artist to paint that scene, or even used the AI output as a rough base and then commissioned a graphic designer to significantly rework it with original elements, the story would be different. This is not a hypothetical — versions of this scenario are already playing out across Nepal's tourism and e-commerce sectors.

Where does Nepal stand internationally on AI copyright?

Nepal is not alone in the grey zone, but it is behind the curve. The United States Copyright Office has repeatedly refused registration for AI-only works, granting protection only where there is sufficient human authorship. The European Union is developing an AI Act that touches on transparency obligations but does not resolve authorship. China has granted limited copyright to some AI-assisted works where human creativity was involved. Nepal, as a WIPO member and TRIPS signatory, watches these developments but has not amended the Copyright Act since 2002 in any way that addresses AI. The Nepal Copyright Registrar's Office has issued no circulars or guidance on the topic. So the conservative position — AI output equals no copyright — remains the only legally defensible one in Nepal today. Policy discussions around intellectual property and AI have been noted in legal circles, but nothing has reached the parliamentary stage.

What practical steps should you take right now?

1. Audit your existing assets. Identify every image your business uses that was created wholly by AI. Mark them as unprotected so nobody mistakenly treats them as proprietary IP.
2. Decide which assets need real protection. A blog illustration might be fine in the public domain. Your logo, flagship product packaging, and trademark assets cannot be.
3. For protectable assets, add human authorship. Hire a designer to substantially rework AI outputs, or commission original work from scratch. Keep layered design files as evidence.
4. File trademark applications where eligible. If the AI image functions as your brand identifier, register it with the Department of Industry. Use our NICE class finder to identify the right classes.
5. Rewrite your contracts. Add AI disclosure and IP warranty clauses to every client agreement, freelance brief, and commissioning contract. Do it this week, not next year.
6. Check platform terms every quarter. Midjourney, OpenAI, and Canva all update their terms periodically. A quarterly review takes ten minutes and can save you from an unpleasant surprise.

Common mistakes when dealing with AI images and copyright in Nepal

A common mistake we see is assuming that paying for an AI tool subscription buys you ownership. It buys you a licence — which is not the same thing. Another is using AI-generated images as a logo without checking whether it reproduces elements of an existing registered trademark; the DoI will refuse your application on conflict grounds regardless of how the image was made. A third is failing to disclose AI use to a client and then facing a breach-of-contract claim when the client discovers their "original" branding asset is an unprotected public-domain image. And the most expensive mistake: building an entire brand identity around an AI-only image, spending heavily on marketing, only to find you can't stop anyone else from using it.

In short: AI-generated images exist in a legal vacuum in Nepal. Copyright doesn't attach to them unless substantial human authorship is layered on top. That doesn't mean you can't use them — it means you need to use them strategically, protect what matters through trademarks and contracts, and never assume you own something just because you generated it. The law will catch up eventually, but your business can't afford to wait.

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Understanding the copyright gap is the first step. The second is protecting what you've built. Reach out directly — we'll help you build an IP strategy that works with Nepal's current law, not against it. If you're ready to secure a brand asset properly, start with our trademark registration service and keep what's yours actually yours.