Businesses Liable to Legal Battles Over Generative AI Usage (Suetopia)
In the rapidly evolving world of artificial intelligence (AI), businesses are increasingly leveraging generative AI for public-facing creations such as logos, websites, and marketing materials. However, the use of AI models trained on copyrighted materials without clear licensing, and the production of outputs that may be substantially similar to protected works, has raised concerns about potential copyright infringement.
To mitigate these risks, businesses should adopt a comprehensive approach that combines human legal oversight, training, clearance processes, policy frameworks, and contractual safeguards.
1. Develop a Clear AI Usage Policy
Businesses should work with legal counsel to create a policy that outlines acceptable uses, responsibilities, and review procedures for AI-generated content. This policy helps mitigate copyright and defamation risks.
2. Human Review and Oversight
All AI-generated content should be reviewed by humans before publication to check for potential infringements or closely similar copyrighted works, especially in logos, marketing materials, or website content.
3. Trademark and Copyright Clearance
Conduct thorough searches on AI outputs intended for branding or commercial use to ensure they do not infringe third-party intellectual property rights.
4. Continuous Monitoring
Regularly audit and monitor AI-generated outputs both before and after publishing to detect unintentional copying or misuse of protected material and avoid reputational harm.
5. Opt Out of AI Training Data Programs
Where possible, businesses should opt out of AI training data programs to avoid their proprietary work being used without consent or contributing to legal exposure.
6. Update Contracts with Agencies
Clarify liability and ownership related to AI-created materials in contracts with marketing, branding, and content agencies.
7. Staff Training
Train staff in the safe, ethical use of generative AI, including understanding copyright boundaries and the importance of human oversight.
This approach addresses the challenges posed by AI models trained on copyrighted materials, the production of outputs that may be substantially similar to protected works, and the current legal uncertainty around fair use defenses. Human review and proactive risk management remain essential because AI-generated content can inadvertently infringe copyrights even if prompts appear generic.
Registering AI-Generated Logos and Slogans as Trademarks
Registering AI-generated logos or slogans as trademarks is possible, but they must be closely associated with your brand. However, it's important to note that the AI-generated content itself is not copyrightable because it lacks a human author to take credit.
Legal Consequences of Copyright Infringement
If a business infringes on a large company's copyright, they may receive a cease and desist letter and have the opportunity to stop using the infringing materials before getting sued. Courts will test any fair use claim to determine if too much of the original work was taken and if the newly-created work limits the potential market for the original. The plaintiff has the burden of proving that an act of infringement was willful.
Liability and Indemnifications
AI vendors disclaim responsibility for lawsuits caused by businesses or individuals using their tools. Indemnifications from AI companies do not guarantee protection against copyright claims and may have conditions that could leave the customer liable.
Recent Legal Cases
In June of 2025, Disney and Universal filed a lawsuit against Midjourney, making two claims of direct and secondary copyright infringement. Midjourney's legal response claims that training on images of the studios' characters is "quintessentially transformative fair use."
In conclusion, businesses should integrate real human creativity in final materials, thoroughly vet their outputs for existing works, document the creative process, and be aware of licensing terms for any AI tools they use to avoid legal risks and potential financial ruin from copyright infringement lawsuits.
- In enterprise businesses, the integration of AI in software for public-facing creations must be accompanied by legal safeguards to prevent copyright infringement.
- The adoption of a policy framework that includes human review, trademark and copyright clearance, continuous monitoring, staff training, and contract updates with agencies can help mitigate potential legal consequences.
- Registering AI-generated logos or slogans as trademarks may offer some protection for businesses, but the AI-generated content itself is not copyrightable.
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