As digital landscapes evolve, our concept of media, identity, and marketing is undergoing a profound transformation. No longer bound to physical reality, synthetic media—content generated by artificial intelligence, including images, video, audio, and text—is reshaping entertainment, advertising, and social interactions. At the forefront of this shift are virtual influencers: computer-generated personas with curated identities, designed to engage audiences on platforms such as Instagram, TikTok or YouTube. These avatars often rival their human counterparts in popularity, influence, and marketability.
However, with innovation comes a raft of legal uncertainties and risks. The burgeoning world of AI-driven content creation has outpaced traditional legal frameworks, leaving creators, platforms, advertisers, and regulators grappling with new challenges. Licensing synthetic media and leveraging virtual influencers may offer tremendous commercial value, but without deliberate risk mitigation, these ventures can expose stakeholders to unintended liabilities.
This article explores the multifaceted legal risks associated with licensing synthetic media and virtual influencers, offering insights and strategies for navigating this complex terrain responsibly and effectively.
The Role and Rise of Synthetic Media
Synthetic media encompasses any content created or manipulated through artificial intelligence and machine learning. These tools can generate images of human-like faces (deepfakes), clone voices, produce songs, and pen articles or scripts. In branding and entertainment, synthetic media enables dynamic storytelling and accurate personalisation, often at a fraction of the cost and time associated with traditional production methods.
Virtual influencers are a salient application of synthetic media. Unlike natural human influencers, these digital personas are fully constructed—graphically or algorithmically—to maintain specific aesthetics, personalities, and narratives. Brands appreciate them for their consistency, controllability, and creative freedom. Examples such as Lil Miquela and Noonoouri illustrate how such entities can secure lucrative partnerships while blurring the line between fiction and reality.
Yet at the heart of synthetic identity lies a paradox: the content is both authentic and artificial, inviting ethical considerations as well as legal scrutiny.
Intellectual Property Challenges
Perhaps the most immediate legal hurdle in licensing synthetic media is determining ownership. Traditional intellectual property law revolves around works created by humans. For example, under UK copyright law and many other jurisdictions, works must be “original” and involve some degree of human creativity to qualify for protection. This becomes problematic when AI generates content autonomously or semi-autonomously.
Who owns the rights to a fully AI-generated piece of music, image or character? Is it the developer of the tool, the user initiating the input, the company funding the creation, or the AI itself (which current laws do not recognise as a rights-holder)? Different jurisdictions have taken varied positions. The UK, for example, has a unique provision in the Copyright, Designs and Patents Act 1988 (Section 9(3)), which attributes authorship of computer-generated works to “the person by whom the arrangements necessary for the creation of the work are undertaken.” Yet, this phrasing remains ambiguous in practical application.
For businesses licensing synthetic media or virtual influencers, this uncertainty can impede due diligence. If ownership is unclear or challenged, the licensee risks investing in content without secure and enforceable rights. This could lead to contract disputes, infringement claims, or forced content withdrawal.
Contractual Solutions to Clarify Ownership
Given these ambiguities, contractual clarity becomes paramount. Licensors must provide warranties regarding their rights to license the synthetic content. Agreements should explicitly delineate who owns the intellectual property—the AI developers, the platform, or the human collaborators. If AI was used, contracts should specify the extent of human input and under whose direction the AI was operated.
Furthermore, if multiple parties contribute to the creation of a virtual influencer—graphic designers, writers, AI developers, brand strategists—contracts should clearly identify each contributor’s role and rights in the final product. In collaborative projects, assigning IP ownership upfront or agreeing to joint ownership (with conditions for licensing, modification, and monetisation) will prevent future contention.
Right of Publicity and Personality
Another layer of complexity arises in the context of personality rights. In many cases, synthetic media attempts to replicate human features, voices, styles, or personas. Even when a virtual influencer is entirely fictional, it may resemble or evoke real individuals, inadvertently or by design. This raises the risk of violating a real person’s right of publicity or passing off.
The right of publicity typically protects individuals from unauthorised commercial use of their likeness, name, or persona. In the UK, this right isn’t explicitly enshrined in statutory law but may be protected through the common law doctrine of passing off. If a virtual influencer strongly resembles a known personality, that celebrity may raise a claim arguing that the imitation could mislead consumers into believing they endorse or are associated with it.
To mitigate such risks, developers and brand partners should practise rigorous due diligence during the design phase of virtual influencers, avoiding overly specific mimicry of identifiable individuals. If the influencer is inspired by a real person, parties should seek clearances and possibly licensing deals with the individual or their estate. This is especially important in the posthumous use of resemblance—where synthetic representations of deceased celebrities are used in ads or entertainment content.
Defamation and Content Oversight
Virtual influencers often take on the appearance of autonomy, communicating with audiences via social media, presenting opinions, and engaging in simulated dialogue. But behind this interaction lies a curated script by a team of content creators. Nonetheless, the public may perceive virtual influencers’ outputs as expressive acts. This opens the door to rhetorical missteps with real-world consequences.
For instance, publishing statements—whether in the tone of a virtual influencer or ancillary marketing content—that damage the reputation of persons or companies could give rise to defamation claims. Under UK defamation law, an entity may be held liable for defamatory content that is published to a third party and causes serious harm. In this context, determining who is liable—the brand, the content creator, or the AI vendor—can be contentious and fact-dependent.
To navigate this risk, businesses should establish internal content governance protocols. Just as human influencers receive training on content guidelines, virtual influencers should be subject to pre-publication review by legal teams. Scripts, captions, and conversations generated for digital personas must be assessed not only for reputational risks but also compliance with advertising standards and platform-specific community guidelines.
Advertising Regulation and Disclosure
Creating marketing content through synthetic means does not absolve brands of regulatory compliance in advertising. Regulatory bodies such as the UK’s Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) apply the same rules to virtual influencers as they would to humans. This includes requirements around disclosure of sponsored content, substantiation of claims, and truthfulness.
A core concern is transparency. Audiences may not readily distinguish between synthetic and human personas. Virtual influencers might appear more relatable or trustworthy, especially to younger audiences, exacerbating ethical concerns when promoting commercial products or services. As such, UK regulators have called for transparent labelling of computer-generated influencers. Brands should disclose that the persona is fictitious and identify when posts are paid promotions.
One practical step is to include consistent hashtags such as #ad or #virtualinfluencer when publishing content. Another is to provide explanatory disclaimers within influencer bios or websites, detailing the nature of the digital creation. Though these steps may temper the immersive experience, they serve an essential function in consumer protection and regulatory compliance.
Ethical Licensing of Data Inputs
Another area drawing increasing scrutiny is the ethical sourcing and licensing of the data sets used to generate virtual influencers or synthetic content. AI systems require massive datasets to train their models—often scraped from public websites or stock image libraries. However, without appropriate licences, this data collection could infringe copyrights, breach terms of use, or unlawfully mine sensitive personal data.
The notorious example comes from AI-generated art models that were trained on copyrighted images without permission from original creators. Journalists and artists have raised concerns that their works have been exploited for commercial purposes with no attribution or remuneration.
To mitigate this risk, licensors must assess whether the training data underlying their synthetic media solutions were obtained and used lawfully. Developers should maintain records of data sources and licences, and ensure data privacy compliance with GDPR and other applicable data protection regimes. For sensitive categories—such as biometric data or personal information—explicit consent may be required.
Evolving Jurisprudence and Regulatory Trends
Given the rapid development of AI and synthetic media technologies, lawmakers around the world are beginning to modernise regulatory frameworks. The European Union recently passed the AI Act, targeting transparent and safe use of AI systems. The UK has indicated plans for a context-driven and innovation-friendly AI rulebook, favouring sector-specific guidance over blanket regulation.
In the United States, several states have proposed laws to limit the use of deepfakes, particularly around elections or non-consensual pornography. Similar conversations are happening globally, with China enforcing regulations around “deep synthesis” content.
Businesses engaging in synthetic media licensing and virtual influencers must anticipate increased scrutiny, not only from regulators but also from consumers, watchdogs, and advocacy groups. The reputational risk associated with opaque practices—especially regarding misuse of likeness, deception, or bias—can be just as severe as legal liability.
Best Practices for Managing Legal Risk
Given the breadth and novelty of potential liabilities in this space, enterprises should adopt a multi-faceted risk management strategy. This should include:
1. Legal Audit: Before licensing synthetic media or virtual influencers, conduct a due diligence audit on the source of the assets, the parties involved, the intellectual property chain-of-title, and regulatory compliance measures.
2. Robust Contracts: Ensure all agreements define IP rights clearly, address moral rights (especially where likeness is involved), articulate liabilities, and outline indemnities in the event of third-party claims.
3. Internal Governance: Implement content review policies specific to synthetic media. Collaborate across legal, marketing, and technical teams to vet scripts, designs, and overall tone.
4. Transparency Measures: Make transparency a feature in virtual influencer campaigns. Use labelling and disclosures to inform consumers while building trust and demonstrating social responsibility.
5. Update Documentation: As case law and regulations evolve, regularly revisit commercial terms, legal policies, and training data permissions to ensure ongoing compliance.
6. Insurance Considerations: Examine the scope of existing insurance coverage. Traditional media liability insurance may not cover AI-generated defamation or IP infringement. Seek specialised policies if applicable.
Preparation for a Hybrid Future
Synthetic media and virtual influencers are not fleeting trends; they are harbingers of a new creative economy, where boundaries between real and virtual are increasingly porous. From blockbuster films to retail campaigns, virtual personas may soon permeate every sector.
For forward-thinking organisations, this shift offers significant opportunity—but also demands rigorous legal discipline. Mastering the licensing landscape involves not only understanding the law as it stands but anticipating how it will change. Thoughtful engagement with lawyers, technologists, ethicists, and regulators will be critical to developing sustainable practices.
Ultimately, the legal risks of synthetic media are not merely technical. They reflect deeper societal questions about identity, trust, and authenticity. By addressing these challenges with integrity and foresight, businesses can contribute to a future where innovation and responsibility evolve hand in hand.