The Hidden IP Risks of Using AI for Marketing

AI has quickly become part of the everyday marketing toolkit.

Businesses are using tools like ChatGPT, Microsoft Copilot, Canva AI, Adobe Firefly and other generative AI platforms to write website copy, create social media posts, generate images, brainstorm business names and produce marketing campaigns.

The benefits are obvious: AI can make content creation faster, cheaper and more accessible.

But there is another question businesses need to consider:

What happens to the intellectual property?

Using AI doesn't make the usual rules around copyright, trade marks, confidential information and brand protection disappear. In some cases, it actually makes those issues more complicated.

Before your business builds valuable marketing assets around AI-generated content, there are some important IP risks worth understanding.

1. You may not own the copyright in AI-generated content

One of the easiest assumptions to make is that if you asked an AI platform to create something, you own the result.

It isn't necessarily that simple.

There are really two separate questions:

First, what does the AI platform allow you to do with the output?

That depends on the terms applying to the particular service and account you are using.

Second, does copyright actually exist in the output?

That's a different question.

Australian copyright law has traditionally been built around human authorship. Where content is generated autonomously by AI, without sufficient human creative contribution, there may be a real question about whether copyright subsists in that material at all.

That distinction matters commercially.

You might have permission from an AI provider to use an image in your marketing but have limited ability to prevent a competitor from using substantially the same material.

For incidental social media content, that might be a risk you're willing to accept.

For a hero illustration, brand character, packaging design or another asset intended to become distinctive to your business, it deserves much more thought.

2. AI-generated content can still infringe someone else's rights

Another common misconception is that using an AI tool somehow insulates the user from copyright infringement.

It doesn't.

Generative AI systems are trained using very large quantities of existing material, and the use of copyrighted works in AI training continues to be the subject of litigation and legal debate internationally.

For an individual business using AI, however, there is a more immediate issue: what has the tool actually produced?

An AI-generated image, piece of copy, video, music or design may potentially reproduce protected elements of somebody else's work.

Risk can increase significantly when prompts deliberately direct the system towards an existing creator or brand.

For example:

“Create packaging that looks like [well-known brand].”

Or:

“Rewrite this competitor's website so it doesn't look copied.”

Changing the words or using AI as an intermediary does not automatically solve the underlying IP problem.

If another person's protected material has been reproduced, the fact that AI assisted with the process isn't necessarily an answer to an infringement claim.

3. Be particularly careful when uploading someone else's content

Generative AI makes it extraordinarily easy to transform existing material.

You can upload an article and ask for a new version. Give it a photograph and ask for something similar. Paste in a competitor's brochure and ask it to rewrite the content for your business.

Technically, that's easy.

Legally, the source material still matters.

Before uploading or transforming third-party material, consider whether you actually have permission to use it for that purpose.

This is particularly important for businesses working with photographers, designers, marketing agencies and other external creators.

Having permission to use a photograph on your website, for example, doesn't necessarily mean you have an unrestricted right to upload that photograph into an AI platform and create derivative material from it.

4. AI can suggest a brand name. It can't clear it for use.

AI is excellent for brainstorming.

Ask it for 50 possible names for a new business or product and you'll have them in seconds.

But an AI-generated name isn't necessarily an available name.

Someone else may already:

• own a registered trade mark;
• have a pending trade mark application;
• operate under a similar brand;
• have reputation in the name; or
• hold relevant rights in another country where you intend to trade.

The same applies to logos generated using AI.

Before investing in signage, packaging, websites, domain names and advertising, businesses should undertake proper trade mark clearance.

Think of AI as the brainstorming department—not the trade mark search.

5. Don't forget about confidential information

IP risk isn't limited to copyright and trade marks.

Businesses also need to think about the information they are putting into AI systems.

Marketing teams can have access to surprisingly sensitive material: unreleased products, customer data, pricing strategies, campaign plans, internal research, product specifications and commercially sensitive business information.

It can be tempting to paste all of that into an AI tool and ask it to develop a campaign.

Before doing so, understand the platform's terms and privacy settings, including how prompts and uploaded material may be stored, accessed or used.

This becomes particularly important where the information belongs to a client, customer or commercial partner rather than your own business.

6. Your employees may already be using AI

For many businesses, the question isn't whether to permit AI.

Your employees are probably already using it.

The better question is whether there are sensible rules around how they use it.

An AI usage policy doesn't need to prohibit the technology. In fact, an overly restrictive policy may prevent a business from benefiting from genuinely useful tools.

Instead, it can establish some practical guardrails around matters such as:

• which AI platforms employees can use;
• what confidential information must not be uploaded;
• when AI-generated material needs human review;
• how third-party material can be used;
• when copyright or trade mark issues should be checked;
• whether significant prompts and outputs should be retained; and
• when marketing content needs additional approval before publication.

The aim is not to make using AI difficult.

It is to make sure the business knows what its team is doing with it.

7. Treat important AI-generated assets differently from disposable content

Not every AI-generated social media caption needs legal review.

Risk management should be proportionate.

A useful question is:

How important will this asset be to the business if it succeeds?

If AI helps draft a routine social media caption that will disappear down the feed within days, the commercial significance is relatively low.

If AI is creating your new logo, product packaging, brand character, website copy or a campaign that you intend to use for the next five years, ownership and infringement become much more important.

The more valuable the asset is expected to become, the more important it is to establish that your business can actually use—and ideally protect—it.

Using AI without giving up good IP strategy

None of this means businesses should stop using AI.

AI is an extraordinarily useful tool for marketing, ideation and content creation.

The important thing is to recognise what it is—and what it isn't.

AI can help you generate ideas.

It can accelerate your creative process.

It can help a small marketing team produce far more than it could have produced a few years ago.

But it doesn't automatically give you ownership. It doesn't conduct proper trade mark clearance. It doesn't guarantee that an output doesn't infringe somebody else's rights. And it doesn't decide whether confidential information should have been uploaded in the first place.

Those decisions still belong to the business.

Before building significant marketing assets using AI, consider:

• What information are we putting into the tool?
• Do we have the right to use any third-party material we're uploading?
• What do the platform's current terms say about our inputs and outputs?
• How much human creative input is going into the final work?
• Could the output reproduce someone else's protected material?
• Have we cleared new brand names and logos before launching them?
• If this becomes a valuable business asset, can we actually protect it?

AI can make creating intellectual property much easier.

The next step is making sure that what you're creating is something your business can safely use and build value around.

Not sure what IP your business already has?

You can download my free IP Audit Checklist from my website. It will help you identify the intellectual property sitting within your business, where there may be gaps in protection and what you should consider doing next.

If AI is becoming a significant part of your marketing or content creation process, an IP Strategy Call can also help you work through ownership, trade mark, copyright and commercialisation issues before they become problems.

Disclaimer: This article is intended for general educational purposes only and does not constitute legal advice. You should obtain advice tailored to your circumstances before acting on any information discussed in this article.