Long Island Businesses Face Unprecedented Wave of AI-Powered Intellectual Property Theft as Commercial Litigation Explodes in 2025

Long Island’s commercial litigation landscape has been fundamentally transformed by an explosive surge in artificial intelligence-related intellectual property disputes throughout 2025. AI is reshaping litigation in 2025, driving major IP fights, and law firms and news outlets count at least four-dozen significant federal court cases over AI companies’ use of copyrighted or trademarked content. What started as isolated cases has evolved into what legal experts are calling an epidemic of AI-powered IP theft that’s dominating commercial litigation dockets across the region.

The Scale of the Crisis

Debevoise found that courts are “finally beginning to confront the substantive merits of plaintiffs’ infringement claims and defendants’ fair use defenses,” with the firm tracking more than 50 lawsuits between intellectual property owners and AI developers that are pending in U.S. federal courts. The surge has been particularly acute in the New York metropolitan area, where 12 cases relating to OpenAI and Microsoft have been centralized in the Southern District of New York, with Federal Judge Stein appearing to be the multi-district litigation (MDL) judge for twelve high-profile generative AI cases.

The types of disputes have evolved significantly throughout 2025. In 2025 and beyond, we expect to see more disputes over AI training data, copyright claims, and trademark infringements, as well as additional oversight in the UK and USA. These cases range from traditional copyright infringement claims to novel theories addressing AI hallucinations and what courts are now calling “substitutive summaries.”

Key Legal Battlegrounds Emerging

Several landmark cases have shaped the legal landscape for Long Island businesses. News Corp, which owns The Wall Street Journal, New York Post, and other media properties, has renewed its IP complaint against Perplexity AI, filed in December 2024, claiming that Perplexity AI illegally scraped copyrighted news content from News Corp’s publications to create an AI-powered “answer engine.” This case exemplifies how AI companies are allegedly bypassing traditional licensing arrangements, directly impacting publishers’ revenue streams.

The fair use doctrine has become central to these disputes. The concept of fair use is central to many AI-related IP disputes, with AI companies often arguing that their use of copyrighted materials falls under fair use, as it is necessary for training their models. However, content creators argue that this practice amounts to unauthorized use and undermines their livelihoods.

Impact on Long Island Businesses

For Long Island companies, the implications are far-reaching. For businesses implementing AI technologies, these disputes create significant liability concerns. Companies must assess whether their AI tools were trained on potentially infringing datasets and consider the risks of using such systems for commercial purposes. Many organizations are now developing comprehensive AI governance policies to mitigate these risks.

For in-house teams, determining where AI shows up in the business is key. Many companies are creating inventories of AI uses, data sources and tools. This proactive approach has become essential as 2026 is likely to bring “sharper challenges to fair-use defenses tailored to specific training practices; aggressive plaintiff strategies to unlock proprietary training information through discovery; and a new wave of class certification battles.”

The Rise of Corporate Plaintiffs

Companies with significant IP assets see generative AI as a potential threat, and “rather than waiting on the sidelines,” those companies have decided to pursue litigation to protect their content. This shift represents a fundamental change in litigation strategy, with less-reported but increasingly outcome-determinative litigation trends from 2025 including the rise in corporate plaintiffs and class actions, with fierce discovery battles and class certification becoming pivotal battlegrounds.

Regulatory Response and Future Outlook

The regulatory landscape is rapidly evolving to address these challenges. The Patent and Trademark Office recently weighed in with new guidelines aimed at determining when inventors may patent inventions created with the assistance of artificial intelligence, reasserting that artificial intelligence systems, no matter how sophisticated, are not inventors or joint inventors on a patent application because they are not humans.

U.S. Court of Federal Claims Judge Molly Silfen said that courts are confronting a range of major legal concerns related to AI, including potential copyright violations by AI developers, the use of AI in obtaining patents, lawyers’ use of the technology and the ability of judges to use AI to write their decisions.

Protecting Your Business

For Long Island businesses navigating this complex landscape, expert legal guidance has become essential. Several practical steps are emerging for creators and businesses seeking to protect their works from unauthorised AI training, including implementing robot.txt files and terms of service that explicitly prohibit AI training, using watermarking and fingerprinting technologies to track content usage, and developing content licensing platforms that facilitate legitimate AI training.

The Frank Law Firm P.C., located in Huntington and serving businesses throughout Long Island, has been at the forefront of helping clients navigate these emerging challenges. The Frank Law Firm P.C. is a team of professional attorneys and support staff that provide legal services for businesses on Long Island, in New York City, and the surrounding areas, with Thomas J. Frank being a commercial litigator with a focus in bankruptcy, real estate, foreclosure, and general business disputes. When facing AI-related intellectual property disputes, working with an experienced commercial litigation attorney long island can make the difference between costly litigation and strategic protection of your business assets.

The firm’s lawyers have extensive experience handling cases involving corporate disputes, contracts, foreclosure, bankruptcy, residential and commercial real estate, financing, and much more. No matter what your legal issue is, their dedicated group of lawyers will go above and beyond to resolve it successfully, with the resources, capabilities, and experience needed to protect your legal rights in any size, complexity, or type of case.

As we move into 2026, the intersection of AI technology and intellectual property law will continue to evolve rapidly. The cases being decided today, barely two years into the generative AI boom, may establish legal precedent that shapes the future of law for decades to come, with several high-profile legal cases testing the boundaries of IP in the age of artificial intelligence. Long Island businesses must stay informed, implement comprehensive AI policies, and work with experienced legal counsel to navigate this unprecedented landscape successfully.