8.0.2.3 - What IP, Licensing, and Likeness Issues Should Brands Consider with AI Media? (Difficulty: Advanced | Path: Scale)

We are currently witnessing the single largest disruption to Intellectual Property (IP) law in a century. For e-commerce brands, the allure of Generative AI is obvious: near-instant creation of logos, product photography, advertising copy, and marketing videos at a fraction of the traditional cost. However, this efficiency comes with a hidden, high-stakes trade-off that most founders miss until it is too late: the question of ownership. When you prompt a machine to generate a brand asset, the legal reality—particularly in the United States—is that you often own nothing. The U.S. Copyright Office has repeatedly ruled that works created solely by artificial intelligence are not eligible for copyright protection because they lack human authorship.

Consider the strategic implication of this vacuum. If you use Midjourney or DALL-E 3 to generate your company's primary logo or the mascot for your new product line, and you do not significantly modify it by hand, that asset effectively enters the public domain immediately. A competitor could legally scrape your website, download your AI-generated logo, and use it on their own packaging. Because you hold no copyright, you would have virtually no legal recourse to stop them under copyright law. You have built your brand's identity on sand. For a business at the "Scale" stage, where brand equity is a tangible asset on the balance sheet, this is an unacceptable vulnerability.

Beyond the issue of ownership lies the minefield of liability. "Likeness rights" and "Right of Publicity" are distinct from copyright. If your marketing team uses an AI video generator to create a spokesperson who accidentally (or intentionally) resembles a celebrity, or even a recognizable private citizen, you are exposing the brand to aggressive litigation. Recent legal precedents and settlements have shown that "I didn't know the AI was trained on their face" is not a valid defense. Furthermore, the Terms of Service (ToS) of the tools you use matter immensely. Using a free-tier account for commercial purposes often violates the license, stripping you of even the limited rights you might otherwise claim.