Legal Issues When Using Generative AI in Digital Advertising

Legal Issues When Using Generative AI in Digital Advertising

The increasing use of AI to create content raises significant legal and business concerns.

The whitepaper “Legal Issues and Business Considerations When Using Generative AI in Digital Advertising” by the Interactive Advertising Bureau (IAB) addresses the profound impact of generative artificial intelligence (AI) on digital advertising, alongside the legal, business, and ethical challenges it presents. This summary highlights the key points and discussions from the document.

Overview of Generative Artificial Intelligence

Generative AI refers to machine-based systems capable of producing new content, such as text, images, audio, and video, based on user prompts. Unlike other forms of AI, generative AI relies on large data sets for training and uses algorithms to create outputs that mimic human creativity and cognition. 

Notable examples include chatbots, virtual assistants, and tools for translating languages. These systems are not inherently cognitive and lack human judgment, but they can generate content rapidly and cost-effectively for brands, agencies, and publishers.

Uses of AI in Digital Advertising

Generative AI has revolutionized digital advertising by enabling the creation of hyper-personalized ad messages and targeting individual consumers more effectively. 

It allows for the automatic generation of multiple ad variations and formats, streamlining the advertising process and extending marketing budgets. However, despite these benefits, AI-generated content may lack contextual understanding and creativity, presenting potential risks and challenges in creating engaging and innovative advertisements.

Legal and Business Issues Regarding Utilizing AI to Create Content

The increasing use of AI to create content raises significant legal and business concerns, particularly regarding intellectual property (IP) rights, privacy, and ethical considerations.

Copyright Protection for AI-Generated Works

The U.S. Copyright Office maintains that works created by non-humans, including AI, are not eligible for copyright protection. This stance was upheld in the Thaler v. Perlmutter case, where the court ruled that human creativity is essential for copyrightability. This ongoing legal debate impacts how AI-generated works are treated under current copyright laws.

Infringement of Third-Party IP Rights

AI-produced works can potentially infringe on third-party copyrights, especially when AI systems are trained on datasets containing copyrighted material without permission. Multiple lawsuits have been filed against companies for allegedly using copyrighted works in training their AI models, highlighting the complexities of IP law in the context of AI.

Right of Publicity and Ethical Considerations

AI-generated content can also infringe on individuals’ rights of publicity if it uses their likeness or persona without consent. Additionally, AI systems may produce content that is biased, inaccurate, or offensive, posing ethical and reputational risks for brands. Ensuring the accuracy, fairness, and appropriateness of AI-generated content is critical for maintaining brand safety and suitability.

Legal and Business Issues Regarding Training AI Models

Training AI models involves ingesting vast amounts of data, including copyrighted works, raising legal questions about copyright infringement and unfair competition.

Copyright Infringement and Fair Use Defense

The core issue is whether ingesting copyrighted works without permission constitutes direct or vicarious infringement. Developers of generative AI models argue that their use of large, publicly available datasets falls under the fair use defense, but this claim is still subject to legal scrutiny and ongoing litigation.

Current and Pending Legal Actions

Several high-profile lawsuits, such as Andersen et al. v. Stability AI, Silverman et al. v. OpenAI, and Kadrey et al. v. Meta Platforms, highlight the contentious nature of using copyrighted material for training AI models. These cases will significantly influence the legal landscape and the development of AI technologies.

Conclusion

Generative AI holds transformative potential for digital advertising, offering opportunities for efficiency and personalization. However, it also brings forth numerous legal, ethical, and operational challenges that need to be addressed.

Navigating the complexities of copyright law, ensuring ethical use, and maintaining transparency in AI-generated content are essential for harnessing the benefits of AI while mitigating its risks.

In summary, the whitepaper underscores the need for a balanced approach to leveraging generative AI in digital advertising, one that considers both its innovative potential and the legal and ethical implications involved.

Note: This article is a summary produced with the help of ChatGPT from the IAB whitepaper.

Headquartered in New York City, IAB helps the media and marketing industries operate in the digital economy.