FTC Warns That Deceptive AI Content Ownership Claims Violate The FTC Act

The buzz around generative AI has raised many IP-related questions, such as the legality of using IP to train AI algorithms or ownership of AI-generated content. But the FTC warns that claims about content ownership don't just give rise to IP concerns – they could also constitute FTC Act violations if they meet the unfair or deceptive standard in Section 5. (Click here and here for our take on other recent AI-related guidance from the FTC.)

In a recent business blog, the Agency lays out several practices that could trigger scrutiny and enforcement:

• Promising full ownership but delivering a limited-use license. Telling consumers that they're buying full rights to a digital product when in fact they're just getting a limited-use license or being enrolled in a subscription service is likely to violate Section 5. The FTC warns companies against unilaterally changing their terms or undermining reasonable ownership expectations post-purchase, including in cases where