Brands hesitant on GenAI adoption due to copyright & IP risks : WFA report

Concerns around intellectual property (IP) and copyright challenges are holding back brands from fully leveraging generative AI (GenAI) in marketing, according to a recent report by the World Federation of Advertisers (WFA). The study sheds light on key risks and provides guidance for brands to navigate these challenges while maximizing AI’s potential.

Titled "Managing IP Risk When Using Generative AI in Marketing," the report reveals that many risks arise from improper AI usage. However, with well-defined safeguards, companies can minimize their legal exposure and still benefit from the technology.

The research is based on insights from a 10-member steering committee comprising IP experts from leading global brands, including AXA, Diageo, Essity, IKEA, Infosys, Kraft Heinz, Lego, L’Oréal, Mars, and Teva Pharmaceuticals. The report outlines six key risks linked to GenAI in marketing, such as:

Loss of control over proprietary brand data and IP
Unauthorized use of third-party assets
Accidental copyright and trademark infringements
Unclear ownership of AI-generated content
Fraudulent AI-generated advertising
Brand impersonation through AI-driven organic content

One of the primary concerns is that feeding proprietary data into GenAI platforms could inadvertently make it accessible beyond the intended audience, including competitors. Additionally, the unauthorized use of third-party content may breach contractual agreements, potentially leading to legal disputes. The risk of AI-generated materials unintentionally replicating existing trademarks or copyrighted content also remains a significant challenge. Furthermore, the rise of AI-powered deepfakes and deceptive advertising poses a threat to brand credibility.

These risks are not merely hypothetical. A WFA survey conducted in September 2024 found that 66% of brands cite legal concerns as the biggest obstacle to GenAI adoption, with 77% specifically highlighting IP and copyright challenges. As a result, only 40% of brands currently using GenAI apply it in consumer-facing marketing campaigns.

"Addressing the legal complexities of GenAI is critical for brands," said WFA CEO Stephan Loerke. "This report provides a much-needed framework for businesses to understand the risks involved and take proactive steps to safeguard their intellectual property."

To mitigate these risks, the report suggests three key strategies:

Clear Policies & Employee Training – Educate teams on the legal implications of GenAI use.

Stronger Contracts & Compliance Measures – Ensure agreements with AI providers, agencies, and partners explicitly address IP concerns.
Ongoing AI Monitoring & Risk Assessment – Implement tools to track AI-generated content and detect potential IP violations.
"Our aim is to equip marketers with the knowledge and best practices necessary to both protect their brands and harness AI effectively," Loerke added.