When Nobody Takes the Blame: AI IP Risks

As artificial intelligence continues to permeate modern tools—ranging from search engines to generative content platforms—it introduces a new kind of risk for businesses and creators alike. One of the most pressing concerns is accountability: when an AI system infringes on intellectual property or generates misleading content, who is held responsible? In many cases, the answer is troubling—no one. And this accountability gap is becoming increasingly dangerous.

AI models are typically trained based on massive datasets collected across the internet, often without the knowledge or consent of the original creators. Because of the complexity and opacity of these systems, multiple stakeholders can easily deflect responsibility. The data provider blames the developer. The developer shifts blame to the user. The deploying company refers to “user-generated prompts.” Regulators, meanwhile, are still catching up to the technology. The result? A fragmented ecosystem where copyright holders find it nearly impossible to defend their work.

Beyond the issue of ownership, AI also presents a reputational threat in the form of “hallucinations”—a phenomenon where AI generates false or misleading information with complete confidence. For example, a potential investor might query an AI chatbot about your company and receive inaccurate, outdated, or entirely fabricated details. While the error stems from the AI, your brand may suffer the consequences. In sensitive industries such as finance, healthcare, and legal services, a single hallucinated statement could result in significant reputational and financial damage.

Consider a hypothetical case of a Malaysian design studio. Their portfolio was unknowingly used to train an Ai image generator. Later, a user prompts the AI to create “modern minimalist logos,” and the output mimics the studio’s unique visual style. Simultaneously, a potential client searches for the studio via AI and encounters false claims that the company had legal troubles. Although the studio took no part in either act, it suffers the double blow of IP erosion and brand distrust—without any clear path to justice.

Source: European Parliament

To address these risks, realistic and P-centered approaches are essential. This can be done by formally registering intellectual property—copyrights, trademarks, patents, and designs—through MyIPO to establish a solid legal
foundation and human authorship, amid ongoing legal debates in Malaysia and beyond. Complement this with proactive digital monitoring: leverage AI-powered tools and platforms (like Red Points or Copyscape) to scan for infringements across public and AI-generated content, obtain alerts when assets appear unauthorized, and quickly issue takedown notices. Next, increase transparency by publishing your IP registration numbers and metadata on websites and marketing collaterals, enabling stakeholders to verify authenticity and counteract AI-generated misinformation. Lastly, equip your team with targeted IP educationsso they can recognize AI hallucinations, critically evaluate AI-generated outputs, and safeguard your company against erroneous or misleading claims. Through this multi-layered strategy—legal protection, AI-fueled surveillance, public visibility, and internal awareness—you transform nebulous AI threats into clear, manageable defenses, ensuring your creations and reputation remain secure.

Need help safeguarding your IP in the age of AI? Our team offers tailored legal solutions for creators and businesses navigating the new digital frontier. We are here to assist all businesses from various industries by providing them the best Intellectual Property services. Contact us now to discuss how we can support your IP needs.