In Los Angeles, intellectual property is currency. It fuels the city’s studios, powers its streaming giants, and drives the creative economy that defines the entertainment capital of the world. But as technology evolves, so do the risks. From AI-generated content and deepfakes to global piracy and brand impersonation, 2025 has brought a wave of new intellectual property (IP) challenges that every company, from major studios to indie creators, must navigate.

Recently, Disney and Universal filed a joint lawsuit against AI company Midjourney, alleging that its image-generation technology unlawfully used copyrighted characters and artwork from their films. The case, unfolding right here in Los Angeles, represents more than just another Hollywood headline. It is a wake-up call for every business in entertainment and media.

AI has blurred the line between inspiration and infringement. As more companies rely on automation, user-generated platforms, and digital collaboration, IP exposure is growing at an unprecedented rate.

In this article, we’ll explore the five biggest IP threats facing the entertainment and media industry in 2025, why they matter, and what companies can do to protect themselves.

Copyright Infringement and AI-Generated Content

AI is revolutionizing creativity, but it is also rewriting the rules of ownership.

Copyright infringement has always been a top concern in entertainment, covering films, music, and television. But today, AI tools such as Midjourney, ChatGPT, and Runway are creating images, scripts, and video sequences that often draw from protected works without permission.

The Disney and Universal vs. Midjourney lawsuit in Los Angeles claims that AI systems were trained using copyrighted images of well-known characters like Elsa and Spider-Man. Those images allegedly helped the model generate similar art, raising questions about where creative inspiration ends and infringement begins.

Why Companies Face Growing Vulnerabilities

Unlike large studios, smaller production companies, marketing agencies, and content creators often lack the legal infrastructure to navigate complex AI licensing issues.
A freelance artist might use an AI image generator for a client project, unaware that the tool was trained on copyrighted material. Later, if that artwork is commercialized, both the creator and client could face claims of infringement.

The numbers tell the story

• Global video piracy results in estimated losses of over $70 billion per year, according to Niambi Business Strategies.
• The use of AI-generated content in the creative industries is expected to grow by 400% from 2023 to 2026, according to PwC’s Entertainment and Media Outlook.

As the volume of digital content skyrockets, ensuring clean ownership of intellectual property has become more complicated and more critical than ever.

How to protect your company

• Include work-for-hire clauses and clear ownership language in all creator and freelancer agreements.
• Audit your content creation process to identify where AI tools are used and whether proper licenses exist.
• Implement digital watermarking and content monitoring tools to detect misuse online.
• Work with legal counsel to review contracts and negotiate AI licensing or training rights before new tools are adopted.

The creative potential of AI is immense, but so are the risks. Treat every output as if it were a potential asset, and protect it accordingly.

Trademark and Brand Dilution / Counterfeiting

Your brand is your identity, and it’s under constant attack.

In 2025, entertainment brands aren’t just competing on screen. They are also battling fakes, imitators, and lookalike products online. Trademarks—names, logos, slogans, and even character likenesses—face new threats from counterfeit goods, misleading social media accounts, and AI-generated brand impersonation.

For example, Disney’s 2024 lawsuit against a Hong Kong jewelry company accused it of selling a “Mickey 1928 Collection” without authorization. The products looked legitimate enough to fool consumers, creating confusion and undermining the brand’s value.

In Los Angeles, counterfeit merchandise tied to music tours, film franchises, and influencer brands has flooded online marketplaces. Sellers on Etsy, Amazon, and TikTok Shops can replicate official designs within hours of a movie’s release.

Why Small Creators Are the New Targets of Global IP Theft

Large studios have in-house enforcement teams. Smaller media or entertainment firms usually don’t. Independent producers, streaming startups, or musicians might not even realize someone overseas is profiting from their IP until fans start tagging fake products on social media.

Inside the Explosive Growth of Global Counterfeiting

• The global counterfeit goods market is worth over $500 billion, with entertainment and luxury goods among the hardest hit sectors.
• According to Platinum Ridge Management, online marketplaces now host more than 3 million counterfeit listings annually related to entertainment merchandise.

Essential Protections for Your Intellectual Property

• Register your trademarks federally and internationally if applicable.
• Monitor e-commerce and social media platforms for unauthorized use of your name or logo.
• Send cease-and-desist letters promptly; waiting can weaken your rights.
• Create strong agreements with licensees and merchandise partners, defining how your brand can be used and ensuring quality control to maintain consumer trust.

Brand reputation is one of the most valuable assets any company owns. Once it’s diluted, rebuilding trust takes time and resources—often far more than proactive protection ever would.

Digital Piracy and Unauthorized Distribution

Piracy isn’t gone; it’s evolved.

From the early days of torrent sites to today’s sophisticated IPTV networks and stream-ripping services, digital piracy remains a massive drain on the entertainment industry. Streaming platforms, music producers, and video creators continue to lose billions each year to unauthorized distribution.

In 2025, piracy is harder to track and easier to scale. Pirated films often appear within hours of a premiere, shared across Telegram channels, private Discord servers, and encrypted peer-to-peer networks. Even user-generated platforms like YouTube and TikTok see unauthorized clips and leaks, often disguised as “fan edits.”

Local impact

Los Angeles-based production companies, especially those in indie film and web streaming, face unique exposure. A single leak before release can tank distribution deals or destroy months of marketing buildup.

One local example: a mid-tier documentary studio discovered that its film was illegally uploaded and shared across several piracy sites weeks before its festival debut. Despite DMCA takedowns, the leak cost the studio over $250,000 in lost licensing revenue.

Why it’s so hard to stop

Piracy networks often operate internationally, outside U.S. jurisdiction. Even when a site is taken down, clones appear almost instantly. For small production houses, pursuing international enforcement can be prohibitively expensive.

Steps to defend against piracy

• Use digital rights management (DRM) and watermarking tools to trace leaks.
• Employ DMCA takedown services and partner with anti-piracy vendors.
• Require anti-piracy obligations in distribution and licensing contracts.
• Work with experienced IP counsel to evaluate enforcement options and coordinate with online platforms.

Piracy will never be fully eradicated, but smart, consistent enforcement can significantly limit the damage.

Trade Secrets and Leaks / Internal IP Misuse

Not every threat comes from the outside. Some come from within.

Trade secrets—scripts, unreleased music, production methods, and marketing strategies—are the hidden engines of the entertainment industry. But as remote work and freelance collaboration have become the norm, internal leaks and IP misuse have spiked.

Unsecured cloud storage, casual file-sharing, and contractor turnover all create weak spots in a company’s IP defense. In post-production, for example, editors and VFX artists often work across multiple projects simultaneously, sometimes keeping local copies of footage or concept art.

Real-world risks

A small LA-based animation studio recently discovered that concept art for a major streaming project had surfaced on Reddit months before its official teaser. The leak didn’t just spoil the surprise; it violated NDAs and strained the studio’s client relationship.

The scale of the issue

• According to a 2024 Deloitte IP survey, more than 45% of entertainment companies reported at least one internal data leak in the past year.
• Most incidents involved contractors or third-party vendors, not full-time employees.

How to protect your trade secrets

• Use NDAs and confidentiality clauses with every contractor, intern, and collaborator.
• Limit access to sensitive materials using version control and password-protected systems.
• Require IP assignment agreements so ownership is clearly defined.
• Conduct regular audits of access permissions and data storage practices.

Protecting trade secrets is about setting boundaries and ensuring that everyone who has access understands their legal responsibilities.

Emerging Threats: AI, Deepfakes, and Regulatory Uncertainty

AI isn’t just a creative tool; it’s a legal minefield.

The rise of generative AI and deepfake technology has created unprecedented challenges for IP law. Tools can now replicate a celebrity’s voice, face, or artistic style with shocking accuracy. The question is: who owns the output, and who is responsible when it crosses the line?

In entertainment, AI-generated likenesses and voice clones are becoming common. Some studios use them for dubbing, de-aging, or reanimation. But others use them without consent, creating deepfakes or unauthorized performances that blur ethical and legal lines.

The Disney and Universal lawsuits against Midjourney highlight this uncertainty. When an AI “learns” from copyrighted data, does that constitute infringement? Courts are still deciding.

Why small and mid-size companies should care

Even small creative agencies or post-production studios using AI to save time are exposed to risk. If the AI model they rely on was trained on copyrighted materials or generates something resembling a protected work, they could face legal action.

Key trends

• A 2025 Platinum Ridge study found that 68% of entertainment companies are concerned about AI-related IP risks.
• Only 32% have formal AI-use policies or contract clauses addressing ownership and liability.

How to stay compliant

• Include AI-specific ownership clauses in contracts and licensing deals.
• Vet every AI vendor’s training data and terms of service.
• Avoid using AI tools that cannot verify their data sources.
• Stay updated on evolving regulations as U.S. and international IP laws adapt.

AI is transforming creativity, but also transforming risk. The sooner businesses integrate AI compliance into their IP strategy, the better protected they will be.

Comparative Risk Snapshot: 2025 IP Threat Landscape

Each of these threats demands vigilance but also presents opportunity. Companies that adapt early will be better positioned to safeguard their creativity and reputation.

How Small and Mid-Size Entertainment Companies Can Protect Themselves

The best defense is preparation.

You don’t need to be a Hollywood giant to manage IP risk effectively. In fact, smaller businesses can move faster and build stronger systems if they know where to start.

1. Conduct an IP Audit

Identify what you own (scripts, logos, footage, software), what’s protected, and where you’re exposed. This forms the foundation for any IP strategy.

2. Strengthen Contracts

Every relationship—employee, freelancer, or vendor—should include clauses covering ownership, confidentiality, and work-for-hire rights. If you’re using AI tools, make sure the contract addresses AI-generated content explicitly.

3. Monitor and Enforce

Set up alerts, track social media, and use IP monitoring software. Send takedowns quickly. The faster you act, the less damage is done.

4. Secure Your Digital Assets

Use access controls, cloud security, and watermarking tools. Limit who can download or distribute sensitive materials.

5. Get Legal Guidance

Work with experienced IP attorneys who understand both law and entertainment. A good lawyer doesn’t just react to problems—they help you prevent them.

A recent case from a Los Angeles independent studio illustrates this perfectly. By conducting an early IP audit and registering their trademarks, they discovered unauthorized clips of their film online before release. With legal help, they issued DMCA takedowns, preventing leaks from spreading and protecting their distribution deal.

Conclusion: The Future Belongs to the Prepared

The entertainment and media industry in Los Angeles has never been more dynamic or more dangerous. Copyright, trademarks, and trade secrets remain cornerstones of business value, but AI, global distribution, and digital platforms are rewriting the rules of ownership and enforcement.

Small and mid-sized companies cannot afford to wait. Every contract, every piece of content, and every collaboration carries IP risk—but also opportunity for protection.

At Carbon Law Group, we help creative professionals and business owners secure their intellectual property through proactive strategy, precise contracts, and strong enforcement. Whether you’re producing films, managing digital content, or exploring AI-driven innovation, our team can help you protect your brand and your bottom line.

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