The growth of generative artificial intelligence brings up intellectual property and regulatory disputes. Businesses may rely on AI to create and distribute digital content, but the ownership, licensing, and consumer understanding of that intellectual property are unclear. Consumer perception evidence may play an increasingly important role in evaluating legal claims.
AI, Digital Products, and Licensing
Consumers do not always acquire ownership of a digital product; instead, they may obtain a license to use it under certain terms. Music downloads, software platforms, and creative tools often operate under licensing agreements allowing providers access under certain conditions. Licensing does not usually fall within the jurisdiction of the Federal Trade Commission (FTC). However, if consumers are misled regarding ownership rights, regulators may have concerns. When generative AI tools are commonplace, these distinctions become significant for both developers and users.
Section 5 of the FTC Act and AI and Licensing Versus Ownership
Section 5 of the Federal Trade Commission Act prohibits unfair or deceptive acts or practices in commerce, and the FTC considers AI-related business practices within this framework. When companies fail to appropriately communicate how their products function, the rights consumers receive after purchase, and how the technologies operate, issues may arise. If consumers reasonably believe they purchased full ownership of a product or digital asset, but received a limited license, regulators may evaluate whether the representation was misleading. Issues involving subscriptions, renewals, or use limitations have already prompted enforcement actions in other industries, and similar questions could arise with AI-enabled products.
Use of Protected Intellectual Property in AI Training and Consumer Surveys
Another area where disputes have arisen involves the data used to train AI systems. If protected intellectual property is incorporated into training datasets without disclosure or authorization, the holders of the intellectual property rights may raise disputes regarding the AI company’s responsibility and liability. In such situations, the clarity of any disclosures and the extent to which consumers understand those disclosures may become relevant issues.
Disputes involving allegations of deceptive practices or misleading representations often require evidence of how consumers understood those communications. Consumer surveys measure how individuals interpret product claims, licensing terms, or disclosures. Consumer surveys may measure whether consumers believe they are purchasing ownership rather than a license, how they interpret disclosures about AI-generated content, and whether particular representations influence consumer decisions.
Consumer Perception and Emerging Technologies
The law is adapting to AI technologies, and questions surrounding AI-generated content, licensing rights, and disclosures may depend on how consumers interpret the information presented to them. IMS Legal Strategies is a leader in consumer survey research, with experts who design research used in matters involving advertising claims, intellectual property disputes, and regulatory investigations. In cases involving new technologies, empirical evidence can help courts and regulators evaluate how consumers interpret statements about complex products and services. Contact IMS Legal Strategies if you face regulatory scrutiny in an AI-related issue.
