Published in the LABJ – September 2025
BRAND RISK MANAGEMENT ON THE LEGAL FRONTIER
Since ChatGPT’s release in late 2022 sparked widespread consumer interest in new Artificial Intelligence (“AI”) tools, companies and courts have been sprinting to keep up with all that adoption of these tools entails.
For companies that build AI models as a business, potential liability is already a reality, with lawsuits about copyrighted materials used as training data and trademarks infringed in (sometimes hallucinatory) outputs. But with businesses in all elds starting to use AI tools that in turn use and generate intellectual property (“IP”), liability not just for developer — but for the user — is a minefield that many may not realize they are already traversing.
THE DANGERS OF OUTSOURCING BRANDING TO AI
Imagine your company is a start-up or an existing business that wants to launch a new brand. The business plan outlines a marketing strategy to reach your target consumers based
on your competitive landscape. The final, crucial piece in the puzzle: replacing the generic “Placeholder” name for your offerings with a compelling brand.
You could hire a marketing agency and/or consult with a lawyer, but both seem too expensive and time-consuming so close to launch. Instead, you wonder — can AI do the job? Sure enough, a quick search turns up dozens of tools to help generate everything from a single logo to an entire brand kit. Your team enters a bit of information about your business and industry, and
voilà! You have the brand you were looking for.
You may soon also have a lawsuit you were not looking for. Months later, a competitor responds to your launch with a federal case claiming trademark infringement, asserting that your AI-generated branding is confusingly similar to its own. At an all-hands meeting, the marketing team vaguely recalls inputting some competitor information into the AI tool, but did not realize the output was so similar to this competitor-turned-plaintiff.
Unfortunately, there is no legal defense of “the robot did it” or “the robot made me do it.” Both copyright and trademark infringement are strict liability offenses, in the sense that just using copyrighted materials or a mark that’s confusingly similar to someone else’s mark is what
incurs liability. An explanation of how you did so unwittingly (whether using an AI tool or a work-for-hire human designer) can be one factor considered in lowering damages, but it is unlikely to get you out of a case where copying or confusion took place.
Moreover, pointing the finger at the AI tool-maker will not help. Even if their terms of service don’t place legal responsibility for infringement on the user (most do), the developer is unlikely to be held responsible for your inputs or final creation. At most, you pull in another defendant for contributory infringement, without getting your company out of the case.
MINIMIZING THE RISKS—ADVICE TO CLAIM THE IP AND CABIN LIABILITY
While AI-based logo-building tools have only come on the scene in the last decade or so, the key to avoiding the above misstep is not new: a clearance search, preferably reviewed with an attorney. Indeed, trademark practitioners and legal service providers have been using AI tools to enhance traditional clearance and enforcement efforts (see, e.g., the International Trademark Association report from April 21, 2021).
Consulting with an IP lawyer — especially one well-versed in trademark law and the array of new clearance/enforcement tools available — is a critical step for any new brand. Such consultation
can also help existing brands devise strategies to better enforce their marks, automating programmable tasks, while giving human decision-makers the best information available in the most cost-effective manner.
Too often, the creative spirit behind marketing and the risk aversion from legal don’t mix — how often do you get the same people wanting to talk inspiration boards and insurance? But a dose of legal strategy can avoid a dollop of disaster, from advertising-related claims to zoning issues. For IP, in particular, good advice early helps you determine what is essential to your business, how to claim it (e.g., you can’t copyright purely AI-made materials), and how to enforce it. More unpleasant, but crucial, is addressing the unavoidable risks of becoming a defendant on this AI frontier.
