Artificial Intelligence (AI) is no longer a future concept in marketing. Today, businesses are using AI to write ad copy, generate images and animations, analyze customer behavior, and personalize their campaigns in record time. On the surface, it feels efficient and innovative. However, beneath this convenience, AI brings risks that many businesses do not realize. If you are using AI tools to market your products or services, it is critical to understand what the legal risks are and how to avoid them.
AI Can Trigger Data Privacy Violations
Many AI-powered tools collect, analyze, and store personal information behind the scenes. If these practices do not align with privacy laws, your business may face liability. Depending on who your customers are, using AI in marketing can trigger various regulations such as the California Consumer Privacy Act (CCPA), Illinois’ Biometric Information Privacy Act (BIPA, the GDPR for EU residents, or COPPA if children under 14 are involved. For example, if a data breach tied to an AI tool happens, you may be subjected to investigations, mandatory disclosures, or even lawsuits.
Generative AI Can Create Copyright and Trademark Problems
Generative AI tools can expose your business to intellectual property risks. AI systems are usually trained on various datasets that may include copyrighted material. If you use AI to produce marketing content that closely resembles an existing protected work, you may face infringement claims, even if the similarity of the content was unintentional.
Additionally, ownership of content may become an issue. Copyright law generally requires human authorship when it comes to AI-generated content. That means that if content is created entirely by AI, you may not be able to protect it, and your competitors may be free to use it.
Trademark risks may also creep in when AI generates names, slogans, or images that resemble existing companies. For instance, an AI-written marketing claim suggesting compatibility with a well-known brand or using a lookalike logo can trigger allegations of trademark infringement or dilution.
AI Marketing Must Still Follow Truth in Advertising Rules
Marketing content, even when AI-generated, must still be truthful, not misleading, and supported by evidence. The Federal Trade Commission makes it clear that AI-driven manipulation or undisclosed commercial influence may violate Section 5 of the FTC Act, especially when it causes consumers to buy through deceptive practices. The same applies to fabricated experiences, testimonials, or reviews.
How to Stay Compliant While Using AI in Marketing
To remain compliant, businesses should set clear internal rules for reviewing prompts and outputs to prevent unintentional trademark violations, lookalike branding, or misleading claims. This is where human oversight becomes non-negotiable. Ensure your team is trained to spot when AI inputs words or design elements that could include unintentional associations.
Secondly, ensure disclosures are tailored to the platform, especially when chatbots, personalized pricing, or AI-driven recommendations to customers are involved.
Third, ensure that any marketing content that references competitors, compatibility, or performance comparisons goes through legal reviews and is properly substantiated and qualified.
Finally, conduct due diligence of AI vendors, understand data usage terms, secure appropriate leases or indemnities where applicable, and document review processes to demonstrate good-faith compliance efforts.
Copyright Risks in AI-Generated Marketing Content
The most immediate legal risk of using AI for marketing is copyright. On the input side: AI image and text generators are trained on massive datasets of copyrighted works. Several major lawsuits—including Andersen v. Stability AI Ltd., No. 23-cv-00201 (N.D. Cal.), and The New York Times Co. v. Microsoft Corp., No. 23-cv-11195 (S.D.N.Y.)—allege that training AI models on copyrighted material without authorization constitutes copyright infringement. While U.S. courts have not resolved these cases definitively, the litigation risk is real, and businesses that use AI tools built on unlicensed training data may face downstream exposure if courts hold that trained models reproduce protected expression.
On the output side: the U.S. Copyright Office has consistently held that purely AI-generated works—those lacking human authorship—are not copyrightable. In its 2023 guidance on AI and copyright, the Office stated that it will not register works produced by machines without creative input or intervention from a human author. This means that AI-generated images, copy, or videos used in your marketing campaigns may not qualify for copyright protection unless a human author made sufficiently creative choices in the generation process. The practical consequence: your AI-generated marketing assets may be freely copyable by competitors, and you cannot bring a copyright infringement suit to stop them.
FTC Rules on AI-Generated Endorsements and Fake Reviews
The FTC’s final rule on fake reviews and testimonials, issued in August 2024 under 16 C.F.R. Part 465, explicitly prohibits businesses from using AI to generate fake consumer reviews. The rule defines a “fake review” to include any review that is not from a genuine customer with actual experience of the product or service. Businesses that use AI tools to generate fabricated positive reviews, whether posted on their own website, on Amazon, or on third-party review platforms, violate this rule and are subject to civil penalties of up to $51,744 per violation. The rule also prohibits businesses from buying positive reviews, suppressing negative reviews, and creating insider review programs without adequate disclosure.
The FTC’s updated Endorsement Guides, 16 C.F.R. Part 255 (revised 2023), address AI-generated testimonials and influencer content. An AI-generated testimonial—a synthetic quote from a fictional customer, or a deepfake video of a celebrity endorsing a product without their actual consent—is not only a likely FTC violation but potentially also a violation of applicable state right-of-publicity statutes, which protect individuals’ rights to control commercial use of their name, image, and likeness. New York Civil Rights Law §§ 50–51 and California Civil Code § 3344 both create civil causes of action for commercial use of a person’s likeness without consent. Several states have enacted or are advancing specific laws addressing AI-generated deepfakes of individuals.
Trademark Risks: Infringement and Generic Use in AI Outputs
AI content generation tools do not independently verify whether their outputs infringe third-party trademarks. A business that prompts an AI image generator to create a logo “in the style of” a well-known brand, or that uses AI-generated copy that closely mimics a competitor’s protected tagline or trade dress, may create infringing content without realizing it. Under the Lanham Act’s likelihood of confusion standard, 15 U.S.C. § 1114, the infringer’s knowledge or intent is not required for liability—what matters is whether the use would confuse consumers. “I asked the AI to make it” is not a defense to trademark infringement.
AI-assisted brand naming—asking a generative AI tool to suggest a business name, product name, or tagline—carries similar risks. The AI’s training data includes existing brand names and trademarks, and its suggestions may closely replicate or infringe existing registered marks. Before adopting any AI-suggested name or tagline for commercial use, conduct a full trademark clearance search through the USPTO’s TESS database, common law sources, and state registries. Adopting an AI-generated name without clearance creates the same infringement exposure as adopting any other name without clearance—and the costs of rebranding after a cease and desist letter are not reduced because the name came from an AI tool.
Privacy Law Implications of AI-Driven Marketing Targeting
AI-driven marketing tools that analyze consumer behavior, predict purchasing intent, and personalize advertising operate on large volumes of personal information. Under the California Consumer Privacy Act (CCPA), Cal. Civ. Code § 1798.100 et seq., consumers have the right to opt out of the “sale or sharing” of their personal information, including sharing with advertising networks for cross-context behavioral advertising. If your AI marketing tool involves sharing consumer data with a third-party AI platform for training or personalization purposes, that sharing may constitute a “sale” under CCPA regardless of whether money changes hands—triggering opt-out rights that your business must honor.
The Colorado AI Act (HB24-1468, effective 2026) imposes obligations on “deployers” of high-risk AI systems that make consequential decisions about consumers, including requirements to conduct impact assessments, disclose AI use to affected consumers, and provide meaningful remediation options. While marketing personalization may not meet the threshold of a “consequential decision” in most contexts, AI-driven pricing, credit offers, and targeted promotions that affect access to goods and services may qualify. The EU AI Act’s transparency requirements for AI systems that interact with consumers apply extraterritorially to U.S. businesses serving EU customers, as discussed in the AI disclosure context.
Advertising Substantiation: AI Claims Must Be Verifiable
AI marketing tools are sometimes marketed with claims about their effectiveness—”this AI will increase conversion rates by 30%”—and businesses that repeat these claims in their own advertising must be able to substantiate them independently. FTC advertising substantiation doctrine, derived from FTC Act Section 5 and the FTC’s Policy Statement Regarding Advertising Substantiation, requires that objective claims in advertising be supported by a reasonable basis before the claims are made. “Reasonable basis” typically means competent and reliable evidence—scientific studies for health claims, objective data for performance claims. AI vendor case studies are not independent substantiation; you need your own evidence from your own customers.
This matters specifically in AI marketing because AI tools generate compelling-sounding output—optimized ad copy, predicted performance metrics, “data-driven” recommendations—that may not reflect verifiable performance in your specific market. Businesses that use AI-generated performance projections in their own advertising (“our AI-optimized campaigns deliver 50% better ROI”) without independent substantiation face FTC exposure. When a marketing claim is built on AI-generated analysis rather than independently verified data, the business is responsible for the claim regardless of where the number originated. Get the underlying data, verify it, and document your substantiation before making performance claims in public-facing materials.
Contractual Protections When Using AI Marketing Vendors
When you engage an AI marketing vendor—whether for content generation, ad targeting, email personalization, or social listening—review the vendor’s contract carefully against your legal obligations. Key provisions to evaluate include: who owns content generated by the tool; does the vendor indemnify you against copyright or trademark claims arising from the tool’s outputs; does the vendor’s data processing agreement comply with CCPA service provider requirements and GDPR processor requirements; does the vendor’s terms prohibit use of your customer data to train the vendor’s AI models without your consent; and what are the vendor’s data security and breach notification obligations?
AI marketing vendors often include in their terms of service a broad license to use your inputs and outputs to improve their models. If your marketing content includes proprietary information—unreleased product details, customer data, competitively sensitive campaign strategies—that data may be used to train a model shared across other customers, effectively disclosing your confidential information to the vendor’s AI system. Review the vendor’s data use and model training terms before uploading sensitive information, and negotiate data processing addenda that restrict the vendor’s use of your data to providing services to you and that prohibit use for model training without explicit consent.
If your business is using AI for marketing and wants to assess copyright, FTC, privacy, and trademark risks, contact the internet law attorneys at Revision Legal through the form on this page or call (855) 473-8474. Our internet law practice advises businesses on AI legal risk, advertising compliance, and data vendor agreements nationwide.
