If you’re using A.I. tools in your online business-whether for content creation, automation, client work, or research-it’s important to understand the legal risks involved. While A.I. tools can be a huge timesaver, results can be inaccurate or biased-and using them without understanding (and adapting to) the risks, can open you and your clients up to serious legal problems. From data usage to intellectual property, here are some tips for staying legally safe while using artificial intelligence in your business.
A.I. is Not Infallible
Generative A.I. tools like ChatGPT learn from massive data sets. The outputs from these tools are only as accurate as the data used to train the models. Hallucinations (fabricated or incorrect responses) are common, and the responses can be biased or outdated.
If you’re thinking about using A.I. to generate legal content or contracts-please don’t. I’ve reviewed A.I.-generated contracts missing key clauses, using unenforceable language, containing conflicting terms, failing to comply with relevant laws…and more. The result? Business owners left completely unprotected.
A.I. and Confidentiality: Read the Fine Print
Before using any A.I. tool in your business, especially for client work, read the tool’s Terms of Use. Many platforms openly state they collect and use your data for training or analysis. If you input proprietary or sensitive business information, you may be waiving privacy or confidentiality.
This matters even more if you’re under an NDA or handling client projects involving trade secrets or confidential strategy. Opt out of model training and limit what you input into A.I. tools.
A.I. Note Takers and Confidential Conversations
A.I.-powered note takers like Otter or Fireflies can be helpful, but they carry risks. I know of one instance where an A.I. note taker remained in a Zoom meeting after its user left-and captured confidential client discussions, violating a non-disclosure agreement. This is hugely problematic.
If you or your clients are sharing private or sensitive information (this includes protected health information!) stop and think before using A.I. note takers. Do the note takers really need to be there? Always read the Terms of any note takers before using them.
A.I. and Intellectual Property (Copyright and Trademarks)
Let’s talk about ownership and infringement risks when it comes to using A.I.-generated content in your business for a sec:
- A.I.-generated images cannot be copyrighted in the U.S. because copyright law only protects works created by humans. This means anyone can legally copy or reuse those images, even if you created them from a detailed prompt you drafted yourself.
- A.I.-written articles or blog posts are not eligible for copyright protection either. Even if you spent hours refining your prompt, the final output isn’t considered original authorship under U.S. copyright law.
- A.I. recreations of trademarked brands (like Disney characters or logos) may constitute trademark infringement, especially if the content creates confusion, suggests endorsement, or misleads consumers. Side note: stay away from anything Disney related altogether…they’re extremely litigious.
- Using A.I. to create logos for your own brand can also be risky. If a logo is fully A.I.-generated, you may have trouble protecting it with a trademark, because the USPTO may question who owns the rights to it.
- Using A.I. models trained on copyrighted material may also implicate you in copyright violation, depending on how you use the A.I.-generated output. This is especially relevant if you’re using A.I. to help write courses, books, or digital products. The lesson here is to use A.I. as a tool for strategy, idea-generation and efficiency…not as a replacement for original thought and creation.
Note: The U.K. is one of the few countries that does offer limited copyright protection for computer-generated works. Make sure you understand your country’s laws if this applies.
The law is years behind technology, and courts in the U.S. are still catching up. Major lawsuits are currently being litigated involving tech companies accused of scraping the internet and then using copyrighted materials to train their models. Expect this area of the law to evolve quickly in the next year or two.
How to Use A.I. Tools Safely in Your Business
To minimize legal risk:
- Don’t rely on A.I. to generate contracts, disclaimers, or any other legal documents
- Avoid entering private or sensitive information into any A.I. tool
- Read the Terms of Service before using new A.I. tools
- Avoid A.I. note takers during confidential meetings or when sensitive or protected information will be shared
- Opt out of model training
- Don’t use A.I. to replicate trademarked brands or characters
Want Contracts that Protect You-That Were Drafted by a Human?
If you’re a content creator, coach, service provider or online entrepreneur using A.I. in your business, it’s critical your contracts are up to date. I offer lawyer-drafted contract templates (with guidance videos) designed specifically for online business owners. You can also work with me to file your trademark and lock down your brand legally.
Check out contract templates here or learn about trademark services here.
Questions? DM me on Instagram or send an email. Always happy to help.
Have a great rest of your week!