While operating in a digital environment is nothing new for most businesses, copyright and other intellectual property concerns continue to evolve in both complexity and scope. The legal risks arising from using online content are persistent and often misunderstood, particularly with the explosive growth of technologies such as generative AI. The potential for inadvertent copyright infringement or related issues is higher than ever. In many cases, these risks stem from a mix of misconceptions and insufficient attention to permissible content use, terms of use, or other relevant agreements.
One of the most widespread issues involves the use of third-party content found through internet searches or made available through stock photography sites. Individuals or businesses mistakenly believe that content made available online may be used for commercial purposes when, in reality, most content is subject to licensing terms, which often include usage restrictions, attribution requirements, redistribution limits, or require the payment of licensee fees. Failing to understand or comply with these terms can expose businesses to infringement claims, statutory or other damages, and reputational harm.
While many assume that altering copyrighted material or using it among other original content qualifies as a form of fair use, the legal reality is much more nuanced. Fair use must always be assessed on a case-by-case basis and, particularly in commercial settings, tends to be interpreted narrowly. The analysis may be further complicated by content that is made available under a “Creative Commons” license, a standardized set of licenses that allow content creators to grant specific usage rights to the public while retaining others. These licenses come in several forms, each with distinct permissions and restrictions, which can be easily misunderstood or overlooked. Some licenses prohibit use for commercial purposes, others require attribution, and still others may require that derivative works be shared under the same conditions. The improper application of these license terms can expose users to significant legal and financial risks.
In response to these challenges, and in an effort to avoid third party content, businesses may turn to generative AI – often under the misconception that its output is free from copyright or licensing concerns. Indeed, generative AI tools that produce images, video, or text, frequently rely on training data that includes copyrighted material, raising questions about the originality of the output and the rights of the end user. While some generative AI platforms offer clarity on the ownership, permitted uses, or limitations of the training data or generated content, many do not, leaving businesses in limbo as to whether and what rights they have to use or distribute the AI-generated content. Even where the prompts given to generative AI are unique or original and the resulting content appears to be as well, the output may still be derived, at least in part, from copyrighted material that was included in the training data. While the legal framework around generative AI platforms on their outputs continues to evolve, the potential for unforeseen liability remains high.
Relatedly, another often-overlooked concern relates to the terms of service of online platforms. Social media sites and platforms, AI tools, and other platforms may broadly assert rights over content generated or uploaded by users. Violating these policies may result in account suspension, content removal, loss of control over proprietary materials, and disruption to the business. In some cases, businesses may forfeit exclusive rights to content or operate under the mistaken belief that they hold rights that they do not actually possess. Without carefully reviewing the terms before use, businesses may unintentionally compromise the integrity of their intellectual property portfolio or find themselves in breach of contract.
Aside from the potential implications of these risks on the business’s day-to-day, unresolved copyright and other intellectual property issues can substantially impact the valuation and marketability of a business when preparing for a potential sale. Prospective buyers typically conduct thorough due diligence on intellectual property assets and uncertainty around the legal rights to content can raise red flags. If the business cannot clearly demonstrate ownership, use of materials under a proper license, and compliance with terms of service and other agreements, this may significantly effect the deal terms or even lead to termination of negotiations.
To address these risks, businesses are increasingly recognizing the value of preventative measures and legal guidance. Establishing internal processes to manage content ownership, licensing, and platform compliance has become increasingly important. Organizations that implement appropriate internal procedures to source content from reputable sources and confirm permissions can considerably reduce the chance of unintentional infringement claims. By conducting regular audits, adopting comprehensive content policies, and aligning digital content strategies, such as website management, social media use, and other online marketing, with platform-specific terms, businesses are better positioned to mitigate risk and manage their intellectual property assets. These efforts should include well-documented policies as well as employee training programs to ensure consistent understanding across the organization, particularly those responsible for marketing, communications, or product development.
Copyright management in the digital age is a dynamic and multifaceted endeavor. By understanding the most common sources of legal exposure and recognizing how content use, technology, and evolving legal frameworks intersect, organizations can better position themselves to thrive in a content-rich digital landscape. As the law continues to develop alongside the digital landscape, staying informed and intentional in digital content practices is not only prudent but necessary for safeguarding long-term business interests.