Mishcon de Reya AI warning creates new due diligence risk for gaming M&A
Summary
Mishcon de Reya partner Nick Allan warns AI-generated assets carry no enforceable IP ownership in most jurisdictions.
Studios using generative AI for core assets cannot sue copycats, creating silent liability for acquirers.
Unsigned contractor IP agreements may mean studios do not legally own their own game.
"If someone did get access to your source code and copied it, you probably wouldn't be able to sue them in the way that you would if it had been written by human beings"
01
AI-generated code voids competitive defense
Most jurisdictions assign no IP ownership to AI-generated outputs.
"Vibe coded" games create no ownership issue but eliminate legal recourse against clones.
AI-assisted development trades short-term speed for long-term unenforceability.
Acquirers pricing studio IP must discount any asset built with generative tools.
02
Contractor IP gaps strip studios of core assets
IP from contractors or freelancers defaults to them without a signed written agreement.
"I speak to so many indie devs who get this wrong, and it's hard to fix later"
A departing contributor with no signed transfer retains legal title mid-acquisition.
This is the most common structural defect in indie studios and hardest to cure retroactively.
03
IP registration as first-line defense
Allan recommends UK trademark as baseline, adding EU and US where budget allows.
US copyright registration is worth pursuing near launch for character designs and UI.
Copyright protects expression, not ideas: mechanics and settings are not protectable.
Real-world assets like Ferrari logos carry materially higher litigation exposure than generic items.
04
Due diligence playbook for gaming VCs and publishers
Audit contractor IP assignment completeness before any acquisition or investment.
Audit AI tool usage across the core asset and code pipeline.
If AI-generated code is present, model the scenario where clone litigation is unavailable.
If signed IP agreements are missing for any non-employee, treat core ownership as unconfirmed.
Watch for jurisdictions updating AI copyright rules in 2025-2026, which would shift valuations.
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