Ways to Sue a Generative A.I. Company and (Possibly) Win
A few legal theories that have survived motions to dismiss and could possible allow plaintiff to win against generative artificial intelligence (AI) companies are claims of trademark dilution (federal and state), false endorsement and trade dress (Lanham Act).
State law claims against generative AI companies are generally preempted by copyright right law. see New York Times Co. v. Microsoft Corp., 777 F. Supp. 3d 283, 320 Dist. Court, SD New York 2025. It is in the interest of generative AI companies to get state law claims pre-empted into copyright claims because copyright law has a broad and fact specific fair use defense. see 17 U.S.C. § 107. While trademark dilution, false endorsement, and trade dress have their own defenses (including fair use), they are far less expansive.
In New York Times Co. v. Microsoft Corp., 777 F. Supp. 3d 283, 320 Dist. Court, SD New York 2025, the Court denied Open AI’s motion to dismiss the claims based on trademark dilution (based on federal and state law claims) finding the New York Times pleading that Open AI was using its trademark without authorization on lower-quality and inaccurate writing. See Id. at 323-326.
Even though generative AI models would not use a visual artist in the same manner, a visual artist could win on a motion to dismiss based on a claim of trademark dilution if their art had a watermark (or any other signature) that the large language model reproduced (even if it was a modified version of it). Getty is making a similar claim in their case against Stability AI. see Complaint at 38, 40 Getty Images (US), Inc. v. Stability AI, Ltd., No. 3:25-cv-06891 (N.D. Cal. Aug. 14, 2025).
In Andersen v. Stability AI Ltd., 744 F. Supp. 3d 956 (N.D. Cal. 2024), the Court denied Open AI’s motion to dismiss the claims based false endorsement and vicarious trade dress infringement. Id. at 977-981. While the false endorsement claim arose from a situation not likely to be repeated (Stability advertised that the model could replicate artists style and specifically referred to them by name), the claim for trade dress is something that could be replicated. Generally trade dress are recognized as "words, symbols, collections of colors and designs, or advertising materials or techniques" that the purchasing public has come to associate with a single source. see Romm Art Creations Ltd. v. Simcha Int'l, Inc., 786 F. Supp. 1126, 1134 (E.D.N.Y. 1992). In Andersen, the Court weighted Stability AI’s references to the artists names as contributing to a finding that the purchasing public has come to associate with a single source, which is unlikely to be repeated. see Andersen, 744 F. Supp. 3d at 977-981. However, there have been other cases where visual artists have been successful in asserting trade dress infringement. see Romm Art Creations Ltd. v. Simcha Int'l, Inc., 786 F. Supp. 1126, 1134 (E.D.N.Y. 1992). One of the hurdles in a claim for trade dress infringement is whether the elements have acquired secondary meaning. However, courts have found that intentional copying of trade dress creates a triable for of secondary meaning. see P&P Imports LLC v. Johnson Enters., LLC, 46 F.4th 953 (9th Cir. 2022). Since the LLMS intentionally copy everything that is available on the internet, this would likely not be an issue.
How can visual artists give themselves the greatest chance in state law or Lanham Act claims? Having a distinctive (but unobtrusive) watermark or signature on anything you post online would likely give artists a fighting chance in court against generative AI under trademark, trade dress infringement, or false endorsement.
Loaned, Loved, Lost? Bailment in the Art World
Some states have art consignment laws which mandate galleries and dealers take an elevated level of care (mandating the artwork is trust property, the gallery owner or dealer is a trustee, the trustee is responsible for damages to work in their possession) when exhibiting or selling works of art on consignment. Someone states even preempt contracts which try and waive these extra duties. But what should artists (or other small business owners) do if they loan their work to be exhibited or sold in state that does not have these extra protections if something happens to their work? They might be able to rely on the legal concept of bailment.
Bailment is a legal relationship established between two parties when one gives property to another for a specific purpose. A bailment is established (at common law) if 1) property is delivered to a bailee (party who holds a property but does not own it), 2) the bailee accepts the property, 3) there is agreement on how the property will be handled. There are few types of bailments that are usually defined by common law. The first is a gratuitous bailment. This is when only one party benefits from the relationship. A good example of this is taking a book out of the library. The only one that benefits is the bailee and the law imposes a high standard of care on them when the property is in their possession. A good example of gratuitous bailment when only the bailor benefits is asking someone to watch our suitcase at the airport. Under that circumstance the law imposes a low standard of care on the bailee. A second type of bailment is mutual beneficial bailment. This is when both parties benefit from the relationship. A good example of this is taking clothes to the dry cleaners to be cleaned or having someone walk your dog. You are getting a service and the person is receiving payment. Under this circumstance, the law imposes a standard duty of care on the bailee in handling of property.
When an artist (or any small business which produces goods) gives artwork (or any good) to be sold on consignment a mutually beneficial bailment would likely exist at common law. In the case of goods or artwork being sold on consignment, the mutually beneficial nature is clear. The artist gets a fee and the gallery or dealer takes a commission. Accordingly, if a consignment agreement does not mention what duty of care the gallery owner or dealer has (or there is no written consignment agreement), the law will imply a reasonable duty of care while the artwork is in their possession.
Picture This: You Bought it, but you can’t sell it (Resale Restrictions on Art)
UCC 2-401 generally states that title passes from the buyer to seller at the time and place at which the seller completes performance and that any reservation of title by the seller is limited to a security interest. Since every state has adopted a form of the UCC, will any restriction on the resale of art only amount to a security interest? Not exactly.
The seminal case of restrictions on the resale of art is Wildenstein & Co. v. Wallis, 79 N.Y.2d 641, 595 N.E.2d 828, 584 N.Y.S.2d 753 (1992). In Wildenstein, Wildenstein sued to enforce contractual rights of first refusal and rights of consignment of paintings that were sold by the estate of Wallis. Id. at 646 . One of the reasons the Court declined to apply the rule against perpetuities (the version codified in New York) to invalidate the restrictions on resale of the paintings because the agreement between Wallis and Wildenstein to restrict the resale of the paintings was more of a commercial (as opposed to a familial) transaction and they served commercial interests by “ facilitating broader marketing of world-renowned art treasures while posing, at the most, only a minimal limitation on the alienability of the works”. Id. at 650, 651. Next, the Court found that the restrictions were valid under the common law rule against against unreasonable restraints on alienation. Id. at 651. The Court reasoned that the right of first refusal and requirement that Wildenstein meet the offer of a third party made them reasonable and thus not an unreasonable (emphasis added) restraint on alienation. Id. at 652.
Another interesting case on restriction on the resale of artwork is Hoffman v. L & M Arts, 838 F.3d 568 (5th Cir. 2016). Hoffman centered around a provision in a sale agreement which stated “All parties agree to make maximum efforts to keep all aspects of this transaction confidential indefinitely." Id. at 574. Hoffman sued the defendants because they advertised the sale of painting at auction and thus, did not keep the sale of the painting them confidential. Id. The Court rejected Hoffman’s interpretation of the “confidential” clause as a permanent restriction on sale because it would have constituted an indirect promissory restraint on alienation and accordingly would be void if unreasonable. Id.
What should artists and collectors take away from Wildenstein and Hoffman? Restraints on resale are governed by state law and will turn out differently in different states. A restraint on resale will likely be invalided if it unlimited in duration or requires an unreasonable price to be paid.
The Art of the Lien: Another Way for Artists to get paid
If an artist improves a piece of personal property (like a sculpture, painting, jewelry) and they are not paid and they are in actual possession of the property, they can take an artisan lien on the property. For those that don’t know, a lien is a legal claim against a property. All jurisdictions recognize in some form of another recognize a possessor or artisanal lien. This is an artisan’s legal right to be paid for improvements they made to personal property.
Most jurisdictions (like Washington DC) codify artisanal lien. Generally, the artisan is allowed to retain personal property they improved until they receive full payment for a period of time after they give notice to owner of the property. § 40–307.02 of the DC code explains that an artisan is permitted to sell a piece of personal property of someone else at public auction that they improved if they were not paid what was agreed would be the cost of their services and:
1) They are still in actual possession of the property
2) They were not paid within a month of when the payment was due.
3) After giving notice once a week for 3 successive weeks in some daily newspaper published in the District.
5) The property is valued at $50 or less.
The proceeds from the same are used to pay the debt, the cost of the sale, and the remainder must return to the owner.
If the value of the personal property is greater than $50, the artisan can file a law suit and have a court force a sale under § 40–307.03 of the DC Code.
Why might an artist pursue an artisan lien as opposed to just suing for breach of contract? Retaining possession of the personal property allows artists to retain leverage and encourages property owners to pay. If you are an artist that has worked on someone else’s personal property and you were not paid, consult a licensed lawyer in your local jurisdiction before you hold on to someone else’s personal property.
Don’t Fret: You (Generally) have a right to Busk
For those that don’t know, busking is the act of musical performance and the acceptance of voluntary donations. People have been doing it for centuries. The Courts in the United States have a long history of examining restrictions on busking from local municipalities. The Courts have generally scrutinized restrictions on busking carefully as they implicate the 1st amendment. Just last year, a district court in California partially denied a motion to dismiss a dispute over a vending ordinance & expressive activity ordinance reasoning that busking was an expressive activity protected by the first amendment . Dorsett v. City of San Diego, No. 24-cv-00813-AJB-AHG, 2025 WL (S.D. Cal. Feb. 24, 2025).
Since there is no landmark Supreme Court case or federal law on busking, different jurisdictions are divided on how much busking can be regulated. Generally, busking is subject to reasonable time, place, and manner restrictions. For example, restrictions on blocking the street, entries or exits of buildings, or preventing people from walking will likely be upheld. Some cities have limits on decibel levels or power level of amplifiers. Some cities (like Washington D.C.) require a permit if you want to busk in public parks or on public transpiration. Generally if a city requires a permit in a specific area to perform, it should be nominal and the process to obtain it should be relatively simple.
What should you do if you would like to be a busker? It is best to research the local laws before you begin. It is likely the city that you want to work in will have a website which will explain the rules to you. Most communities want you to know what the rules are, so you can follow them. If you feel like they are too onerous, you should consult a licensed attorney in that jurisdiction to help you understand if you might have proper challenge. You might not even have to get a ticket or get arrested to make the challenge. In Barilla v. City of Houston, No. 20-20535 (5th Cir. 2021), the 5th circuit reversed a dismissal of a Busker’s challenge to a local ordinance even though he was never arrested or issued a citation.