Legal Risks and Protections for Retailers Using AI-Generated Advertising Content

Traditional national advertising campaigns often involved extensive model shoots, multi-camera video productions, and complex graphic design processes. The advent of generative AI has revolutionized this landscape, allowing retailers to rapidly produce digital advertisements, seasonal promotions, product images, and social media content with reduced reliance on traditional agencies or creative teams. Even legacy commercials and brand narratives are being reimagined and repurposed through AI technologies.

Despite the clear advantages in speed and cost, AI-generated advertising introduces notable legal risks that are frequently underestimated. One primary concern is the inadvertent use of copyrighted material. AI outputs can bear substantial similarity to original works used in training large language models (LLMs), exposing retailers to potential copyright infringement claims when such content is deployed across websites, email campaigns, or national promotions.

Copyright holders can detect unauthorized use of their works through existing tools like reverse image and audio search engines. Consequently, it is critical for retailers to understand how their advertising agencies’ or vendors’ LLMs were trained. Incorporating appropriate limitations, indemnities, and clearance provisions into master services agreements with third parties is essential, as retailers are typically the parties subject to enforcement actions rather than the vendors.

Beyond liability avoidance, protecting the uniqueness and goodwill invested in AI-generated content is vital. Copyright law generally requires meaningful human authorship for protection, and purely AI-generated artistic works without significant human involvement often lack copyright eligibility. Retailers should maintain detailed records such as sketches, prompts, and edits to establish proof of authorship and exclusivity, similar to how inventors preserve lab notebooks for patent claims.

Another key consideration is that many generative AI tools do not treat user prompts as confidential, which can impact efforts to maintain exclusivity over AI-assisted creations. Retailers must be mindful of this when developing brand assets using AI.

Trademark law presents additional challenges. AI-generated content may reference or imitate protected brand names, logos, or slogans, risking trademark infringement. This is particularly sensitive in retail advertising, where brand identity and source-identifying elements are crucial. Creators should proactively clear trademarks and design elements before launching consumer-facing campaigns, allowing prompt adjustments to AI prompts and reducing infringement risks.

Right of publicity and privacy issues also demand attention. AI-generated advertisements that feature images resembling real individuals or use personal data require careful handling. Retailers employing AI to create models, influencers, or lifestyle imagery should verify whether the AI platform provides appropriate disclosures and protections. When ads involve or resemble identifiable persons, obtaining releases or permissions is advisable to avoid legal claims and reputational damage.

Despite the efficiency of AI-generated advertising, it should not replace traditional legal review and brand protection measures. Establishing company-wide procedures that define required terms, tools, and permissions before deploying generative AI is critical. Such protocols help educate employees, promote consistency across marketing teams, and minimize unintended legal exposure.

Retail legal teams play a pivotal role in balancing innovation with risk management by implementing preventative processes. These measures ensure that AI-generated content aligns with intellectual property laws and brand standards, supporting sustainable marketing strategies in the evolving digital landscape.

Jeremy S. Boczko, a partner at Hunton Andrews Kurth LLP, is an experienced IP strategist advising prominent companies on acquiring and litigating diverse intellectual property rights. Andre Earls, an associate at the firm, focuses on IP prosecution and litigation, with an emphasis on trademark law.