Navigating the Legal Minefield: Outfit7’s VP of Legal on Protecting Intellectual Property in the Age of Generative AI

As generative artificial intelligence becomes increasingly embedded in the everyday workflows of game development and marketing, studios are facing a complex new reality regarding the security and ownership of their intellectual property. For mobile game developers working with globally recognized franchises, licensed brands, and proprietary technologies, the integration of AI demands a fundamental reassessment of creative pipelines. The core challenge is no longer just about what these advanced tools can produce, but rather understanding what information development teams feed into them and whether the resulting assets can still be legally protected.

Outfit7, the prominent games studio globally renowned for creating the massively successful Talking Tom franchise, is among the companies actively navigating this industry-wide shift. To better understand the copyright, confidentiality, and ownership risks that accompany the deeper integration of AI into game production, industry discussions have increasingly turned toward legal experts managing these exact challenges on the front lines. Tina Stockbauer Zagorac, Vice President of Legal at Outfit7, offers a vital perspective on how modern game studios must adapt their legal and operational strategies to safeguard their core assets without stifling innovation or operational efficiency.

Protecting IP in the AI Workflow

The introduction of generative AI into creative pipelines fundamentally disrupts traditional assumptions that game companies have historically relied upon regarding ownership and copyright. In a standard development environment, when a software engineer writes a line of code or a character artist designs a digital asset as part of their employment, the chain of ownership is typically straightforward and legally secure. However, the collaborative nature of AI-assisted creation blurs these traditional lines, particularly when the exact degree of human contribution varies across different stages of production.

According to Zagorac, this change represents the single biggest operational and legal shift for modern game developers. Speaking from the perspective of an industry legal expert, she emphasizes that intellectual property protection is no longer an automatic byproduct of creation. Instead, it must be actively secured, meticulously managed, and thoroughly documented throughout every phase of a project’s lifecycle.

In the past, the mere act of a team writing code or designing a character guaranteed automatic copyright ownership for the studio. Today, incorporating AI into production disrupts that baseline assumption entirely, transforming routine IP protection into a sophisticated, high-stakes risk-management exercise. Because intellectual property offices around the world strictly require human authorship to grant copyright protection, unmanaged or careless AI usage poses a severe threat. It risks accidentally placing critical game assets, proprietary engine code, or signature artwork directly into the public domain, rendering them legally indefensible against copycats or competitors.

To mitigate these severe risks, modern legal and creative teams must establish rigorous, clear boundaries regarding where and how AI tools can be deployed. Furthermore, studios must institute comprehensive record-keeping systems that meticulously track and document AI-generated initial outputs alongside subsequent human edits and transformations. By maintaining this clear audit trail, studios can definitively demonstrate human creative control, proving invaluable if their ownership claims are ever legally challenged or scrutinized during intellectual property registration.

What Are You Feeding into AI?

While establishing legal ownership over final outputs is a critical priority, it represents only one facet of the broader challenge facing modern game developers. Studios must also confront the immediate risks associated with the raw materials, assets, and data that employees and contractors feed into third-party AI systems during day-to-day operations.

Unreleased character designs, proprietary source code, and sensitive assets supplied by external licensing partners often carry strict confidentiality obligations and contractual limitations. Uploading these materials into standard, publicly available AI services without a thorough understanding of the underlying terms of service can immediately compromise a company’s legal standing. From a strictly legal perspective, feeding proprietary or licensed third-party assets into standard versions of AI tools introduces severe vulnerabilities concerning trade secret exposure, the complete loss of confidentiality, and immediate breaches of contract with brand partners.

This issue carries profound implications for mobile game studios that frequently collaborate with external licensors or manage major cross-media brand crossovers. If an artist, animator, or programmer uploads unreleased characters, proprietary source code, or licensed third-party assets into a free consumer AI tool, those valuable files may inadvertently be absorbed into public model-training datasets. Furthermore, introducing licensed intellectual property into an open or public model can trigger devastating claims from brand partners, resulting in costly legal disputes and broken business relationships.

Before granting teams permission to use any AI tool, in-house legal departments must proactively verify whether model-training functions can be entirely disabled. Additionally, legal teams must carefully audit all vendor contracts to ensure robust confidentiality protections, clear liability terms, and comprehensive indemnification clauses in the event of third-party IP infringement claims.

Keeping Control

Legal oversight and risk mitigation cannot stop once a company establishes clear guidelines on what materials employees are permitted to upload. The final outputs generated by AI systems must also undergo rigorous evaluation before they are cleared for integration into an actual video game or a high-profile marketing campaign.

For studios producing promotional materials, marketing advertisements, or in-game artwork, this requires a careful determination of whether the AI-generated content accidentally infringes upon existing third-party intellectual property or registered trademarks. AI outputs frequently synthesize vast datasets, meaning they can inadvertently contain protected third-party elements that could expose a studio to costly copyright infringement lawsuits. Thorough clearance checks are therefore a mandatory step before any AI-assisted asset is finalized.

Beyond basic clearance and trademark checks, studios must carefully weigh the level of human involvement required to secure valid copyright protection. Zagorac stresses that AI-assisted work must always remain firmly embedded within a broader, human-led creative process. Creative pipelines must be intentionally structured so that raw AI-generated outputs undergo substantial, meaningful transformation by skilled human artists and designers. This ensures that the studio can successfully claim defensible copyright ownership over the final production assets.

For an organization like Outfit7, these legal considerations carry immense weight given its stewardship of the globally recognized Talking Tom franchise and its frequent collaborations with other major established entertainment brands. However, Zagorac firmly believes that generative AI does not inherently complicate these delicate partnerships, provided that companies maintain rigorous control over their core creative assets and franchise identity.

Outfit7 does not view generative AI as an insurmountable obstacle to cross-brand collaborations because the studio remains fiercely protective of its franchise identity and actively ensures strict ownership of all core assets. When AI tools are utilized responsibly—functioning solely as operational aids to enhance efficiency without ever replacing human creative oversight—brand partnerships can continue to thrive seamlessly alongside modern technological adoption.

Employee Impact

Beyond the complex legal frameworks surrounding copyright and data ownership, game studios must also address the human element: how their employees interact with and utilize AI tools on a daily basis. Consumer-facing AI services are remarkably accessible, and creative professionals frequently turn to them to accelerate repetitive tasks or brainstorm concepts, often without fully realizing the scope of the information they are sharing with external platforms.

Zagorac points to a significant awareness gap as the single biggest operational challenge facing modern businesses. Most employees and creative team members adopt consumer AI tools with entirely good intentions, aiming simply to boost their personal productivity and workflow efficiency, while remaining completely unaware of the underlying dangers or severe legal consequences tied to those platforms.

Employees naturally tend to treat AI tools like any other standard piece of professional software, failing to recognize that copy-pasting proprietary source code, uploading unreleased company assets, or feeding third-party intellectual property into consumer tools can permanently destroy trade secret protections, trigger damaging breach-of-contract lawsuits, or result in unprotectable public domain assets.

Rather than implementing blunt, counterproductive bans on all AI usage, Zagorac advocates for transparent communication and comprehensive education. When companies take the time to clearly explain the actual legal consequences to their creative teams, those employees naturally evolve into active, reliable partners in organizational risk management. Furthermore, companies should actively provision secure, enterprise-grade AI solutions equipped with explicit confidentiality guarantees and zero-data-retention obligations.

Where AI Can Help

Despite the myriad legal risks, liability concerns, and operational hurdles, Zagorac maintains that artificial intelligence holds a legitimate and valuable place in modern game development. The key benefit lies in its ability to improve operational efficiency without ever compromising a company’s most valuable intellectual property.

From a legal standpoint, the objective is never to avoid AI entirely, but rather to adopt a strategic approach. Studios must carefully identify which core assets demand absolute copyright protection and human craftsmanship versus areas where operational efficiency can safely take priority. For foundational assets that represent the long-term enterprise value, equity, and market defensibility of the business, human authorship must remain at the absolute center of the creative pipeline.

Ultimately, integrating artificial intelligence should form a cohesive component of a company’s broader, overarching strategy for intellectual property protection. By taking a proactive, strategic approach—aligning AI usage directly with comprehensive IP management policies—game studios can successfully scale production, streamline marketing campaigns, and drive business growth without diluting their fundamental enterprise value.

Industry professionals seeking further insights into the evolving relationship between artificial intelligence and video game development will have opportunities to explore these topics at upcoming industry gatherings, including the specialized AI Gamechangers Summit at Pocket Gamer Connects London.