December 15, 2022

Image-Generating AI: Trends and Legal Challenges

Holland & Knight Masters of the Metaverse Blog
Thomas W. Brooke | Danielle N. Garno | Rodrigo Javier Velasco
Masters of the Metaverse Blog

Like human intelligence, artificial intelligence (AI) can recognize patterns, predict outcomes, analyze complex problems and even equalize – or surpass – human creativity. Tech-generated innovative and creative processes are now a reality, and they come in various forms.

On the visual arts and/or photography side, Prisma Labs recently released an intriguing and amusing "magic avatar" app, Lensa AI, that creates artistic and fantastical portraits.

The user uploads a minimum of 10 selfies from which Lensa AI creates a series of computer-generated portraits of the user, incorporating many different styles and themes applied to the user's facial elements as well as the image's background (e.g. anime, vintage and many more).

According to Lensa AI, these magic avatars are created using an external technology known as Stable Diffusion ( In general, this external technology is a deep-structured, machine-learning method with the ability to process and generate highly elaborate images. As with any new technology – especially one that manipulates existing images and creates new ones – a variety of legal issues come into play.

A General Legal Approach

With new technologies, developers and users must consider issues of ownership and control of different intellectual property (IP) assets. The creation of AI-generated images and text (like ChatGPT) may lead to legal issues involving patent and copyright law, protection of one's rights of publicity and privacy, and ethical issues that will need to be addressed by courts and legislators.

Without providing a deep doctrinal legal analysis for these fields of law, some general takeaways and/or legal questions to bear in mind are described below.


AI processing involves large amounts of data. Users of the Lensa AI or any other analogous AI image portrait generator should always assess the applicable platform's terms of use. The terms are likely to include language that the user may grant rights to create derivative works and grant the persons behind the AI platform app the right to use the image(s) for other commercial purposes. These rights could be subject to rules relating to the national or cross-border transfer and use of data.

Publicity Rights

As with any other new technology, it will be important to assess if images generated by deep learning image generator platforms may be used for marketing and branding purposes.

Although individual users have not used their own faces for trademark purposes or allowed others to do so, by granting rights to images via an AI app to a developer, a user could end up seeing their face on the developer's website or marketing materials. Potential users should be aware that they could be surrendering their rights of publicity and privacy.


The U.S. Court of Appeals for the Federal Circuit held that AI cannot be listed as an inventor on a patent application. The topic is further addressed in the Holland & Knight blog post, "Revisiting AI Inventorship in Thaler v. Vidal."


Treatment of visual works created through the involvement of AI is under consideration at the U.S. Copyright Office. "Zarya of the Dawn," a graphic novel by Kristina Kashtanova, was created with the assistance of the AI image-generating technology MidJourney. On Sept. 15, 2022, the Copyright Office granted a valid copyright registration for such work, and it seems to be the first of its nature (Reg. #VAu001480196). A month later, the Copyright Office gave notice that cancellation of the registration was possible and asked the claimant to provide details of the creative process to show that there was substantial human involvement in the process of creation.

The Copyright Office will accept works that are partially and not wholly assisted by AI in their creation. This criteria harmonizes with the recent decision in Thaler v. Vidal.

The patent applicant, Dr. Stephen Thaler, had already been unsuccessful in submissions at the Copyright Office, which refused the registration of the work, "A Recent Entrance to Paradise," because no human author was named on the application.

In contrast to "Zarya of the Dawn," which was created with the assistance of AI, "A Recent Entrance to Paradise" was wholly created by AI. In all likelihood, the line between will be blurry and subjective.

Product Liability, Technology Commercial Contracts and the Insurance Industry

Unprecedented irreparable harm to users in various forms may be a risk to the AI companies, including the infringement of IP rights and goodwill. The risk allocation behind the use of AI image generative processes will be key to determining whether the AI companies are potentially liable. New types of AI-related insurance for the companies/individuals behind the image generating or any AI ecosystem may be developed to address the IP issues as well as cases of massive data breaches and bad faith uses.

For More Information

AI methods, including tech-generated processes that create images, are likely to have profound and unforeseen impacts on our everyday activities. For this reason, legal and even ethical questions subjects should be considered by developers and users.

For more information and additional IP guidance, contact the authors.

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