Have you seen a celebrity advertising something, like the Barefoot Investor advertising bitcoin, that you really didn’t expect them to have anything to do with? Or you might have seen Eminem doing a Motown cover of “Without Me” that looks and sounds real.

What they have in common is that AI tools have been used to create the avatars of those people using publicly available (and subject to copyright) content to closely mimic their look, sound and movements, raising concerns around intellectual property protection and copyright law.

The use of AI tools to create digital avatars of real people is a rapidly evolving technique for marketing and content delivery. However, while digital avatars can be efficient time and money savers, many people haven’t stopped to consider how much control they have over their own avatars, who is generating them, who is using them and what they are communicating.

Maintaining control over your digital avatar is vital to protecting your brand, reputation and business… 

1. What is a digital avatar?

A digital avatar is an AI-generated persona that mimics human appearance, voice, and/or behaviour. Essentially, it is a digital persona of you that looks, talks and acts like you on digital media, forming part of your broader digital identity.
  

Depending on the design, digital avatars range from being able to speak a pre-determined script like you would, to being able to make decisions like you, based on your previous pattern of decisions. While the latter is only recently emerging, this technology is rapidly evolving, and it is important to be prepared to avoid future problems and legal risks for businesses.

Digital avatars are commonly used in customer service, sales, marketing and education. They can be entirely synthetic and not based on a real human being at all. It is possible to use generative AI to produce a human looking character based upon a set of defined parameters.

For now, we are focused on discussing the protection of digital avatars whose design is based on real humans – namely you or someone in your business.

2. Why do you need to retain control of your digital avatar? (What could possibly go wrong?)

To protect both yourself and others it is vital to maintain legal control of your digital avatar and ensure proper legal agreements are in place.

Digital avatars look like you.

What your digital twin says to your audience communicates what you represent and impacts your brand reputation.

Where another person or organization has control of your avatar, they can prompt it to say things that are against your values, or are misleading, false or defamatory, which could leave you in ‘hot water’ and expose you to legal liability risks.

Consider the proliferation of fake news anchors, some mimicking real reporters, talking about fake events, increasing the level of confusion around what is and isn’t real.

3. Can your Avatar make decisions for you?

Another issue that can arise is the matter of who is legally responsible for the content created or decisions made by a digital avatar.

If a digital avatar has been created to make decisions on your behalf, however limited the scope, who is responsible for the decisions that the Avatar makes?

For Example:

• What happens if your digital avatar activates a financial investment that you wouldn’t have made? Can you back out?
• If your digital avatar has created content autonomously, who owns the intellectual property rights to that work and how does copyright protection apply?

While these examples may sound far-fetched and largely irrelevant for now, the reality is that this is where this technology is headed.

If you do not retain control over your avatar, you have no ability to ensure that what it says, creates or personifies aligns with what you believe and represent.

4. What can you do to retain control of your digital likeness?

You could simply not create a digital copy, but then what do you do if someone else creates one of you? 

Firstly, in Australia a photo or video of you can be considered ‘personal information’ and protected under Privacy Law.

Copyright law will provide some protection if you can demonstrate a sufficient level of human intervention in the creation of your digital twin and assert your intellectual property ownership.

Consider how your digital avatar will be used. In a business context, your digital copy could deliver:

• Marketing and promotion
• Education
• Product demonstrations
• Training and induction

If you are going to allow employees, contractors or your business to use your digital avatar, a clear intellectual property agreement is important. The agreement should cover how your digital counterpart can and cannot be used and that you retain all rights to it.

Get into a habit of routinely reviewing the legals of the platform you are using to create and manage your digital avatar to ensure you are retaining control and maintaining legal compliance.

5. Where is the tech going? Is regulation keeping up?

It is usual for laws to be enacted many years after new technology is developed and only adapted to respond to emerging problems after they have arisen rather than in anticipation.

Currently, Australia has no laws specifically governing digital avatars. In China and the United States, legislation has begun to be introduced to reactively manage the power of AI and problems it creates.

However, in Denmark, they have taken a proactive approach and introduced laws to give people copyright to their own body, face and voice. Unfortunately, this is a rare demonstration of proactive protection of rights in the face of digital innovation. As legislation, particularly in Australia, is more likely to be reactive rather than proactive, you need to be proactive in protecting your digital likeness.

A combination of protection of personal information and copyright of a person’s digital likeness appears to be where future legislation might land.

Final thoughts

Despite being part of gen z, and a so-called digital native, I am worried about the capabilities and implications of digital avatars and personally would never create one of myself.

However, I can appreciate that this technology has provided a new avenue of efficiency for sole traders and small businesses, and it is important that we know how to protect ourselves and build strong legal foundations for businesses.

To retain control, you must be the person who creates the digital avatar so that you can claim copyright over it. Then, a strong intellectual property agreement with those who will have access to your digital avatar, allows you to protect your digital likeness from misuse.

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AI tools are now embedded in everyday business across Australia. People use them to draft emails, prepare content, summarise meetings and generate ideas, support marketing, administration and client work.

The real legal risk with AI is not who owns the output. Copyright in work produced by employees is owned by the employer under relevant laws. Under a properly drafted contractor agreement ownership of work is already assigned to the business  or intellectual property clause.

The bigger issue is protecting the privacy and integrity of information that goes into the AI tool being used.

When confidential, personal or sensitive business information is entered into AI platforms without safeguards, businesses can expose themselves to serious confidentiality and privacy risk under Australian law. 

If your team is using AI, your employment contracts, policies, procedures and contractor agreements should each clearly address the rules around using AI within your business.

1. The real risk: confidential and sensitive information

AI systems generate responses based on the data they are trained on and the prompts they receive. Free access systems like ChatGPT will automatically “consume” every piece of information input into the system and use that information and your responses to output as part of its learning processes. What this means for your business is that any information input to the AI is now potentially output for someone else’s query.  

If staff or contractors input client information, financial records, personal data or commercially sensitive details, that information may be retained or processed in ways that creates legal risk.

For professional service firms and other businesses collecting personal information, this could breach Australian privacy law requirements and any contractual confidentiality or fiduciary obligations.

The issue is not that AI exists. The issue is using AI without boundaries.

Businesses should clearly define in their contracts and internal policies:

• What AI platforms can be used – some firms are developing their own
• What settings must be activated for the approved AI platform so that information is not used for machine learning and not accessible outside your organisation
• What functions can be carried out using AI tools
• What information can and cannot be entered into AI tools
• When anonymisation is required
• The importance of verifying AI output 

These boundaries should not be informal. They should be documented in employment contracts, contractor agreements and internal AI policies.

2. Employment contracts and workplace policies

For employers, aligning AI usage standards with existing employment law and privacy compliance frameworks is critical.

From an employment law perspective, AI use should be addressed in:

• Employment contracts
• Confidentiality agreements
• Workplace policies and procedures

Employees should understand:

• Whether AI tools are permitted in performing their duties
• What AI tools they are permitted to use for their work
• What client or internal information cannot be entered
• The consequences of misuse of AI tools
• The consequences of breaching confidentiality or privacy obligations

Clear policies reduce risk and protect both the business and the employee. Having the policy without also educating your team about those policies is not enough. You must be able to demonstrate that your workforce knows the policies exist, and understand their obligations.

3. Contractor and subcontractor agreements

While ownership of work is usually already covered through intellectual property clauses or copyright assignment provisions, confidentiality and privacy protections must also reflect modern AI use.

If you engage contractors or subcontractors, your contractor agreement should include:

• A requirement to disclose AI use and the AI platform or tools used
• Warranties that any AI output has been verified for correctness
• Confidentiality obligations that expressly apply to AI use
• Requirements to anonymise information before using AI
• Restrictions on entering client or business data into AI tools without express authority
• Data handling and security standards

This is especially important where contractors are handling client data or commercial sensitive information about your business.

4. Client-facing service agreements and privacy policies

Do your clients know you use AI in your business? Depending on your industry, you may assume that your clients expect that there is some use of AI in your business. However, it is unlikely that your clients have turned their minds to how that might impact them – yet. The more AI is discussed, the more aware people become, and suddenly you have questions about how client data is used. 

If your business provides services and uses AI internally, you should also consider:

• Whether your service agreement needs to include a disclosure about AI use within your business
• How your business is protecting confidentiality when AI tools are involved
• Whether your business is using  AI-assisted processing of personal information
• What additional disclosures should be included in your privacy policy

5. A practical AI governance framework

You do not need complex documentation to start.

A simple three-layer approach works well:

1. An internal AI usage policy for staff and contractors
2. Updated clauses in employment contracts and contractor agreements covering privacy, confidentiality and AI use
3. A review process for work involving client information that may be considered high risk, such as in health services and financial services.

AI is here to stay. Businesses do not need to avoid it. You simply need to control and monitor how it is used through clear contracts and policies.

If your staff or contractors are using AI in client or internal work, it may be time to review your employment contracts, contractor agreements, service agreements, privacy policies and confidentiality clauses to ensure the each reflect the way your business uses AI, the impact that may have on client data and what you are doing to protect client data. 

If you would like to review your agreements or update your AI governance framework, please get started by booking a Short Advice Session with one of our team.

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Joint ventures are a powerful way for business owners to collaborate, share expertise, and accelerate growth. When structured well, a joint venture can deliver strong commercial results. However, a failed joint venture can be costly, time-consuming, and damaging to relationships.

Many failed joint ventures follow the same patterns: unclear roles, poor planning, inadequate agreements, and mismatched expectations. In this Onyx Legal guide, we outline 11 practical strategies to support the success of a joint venture and explain how to avoid the common causes of failed joint ventures.

1. Clearly Identify the Parties to the Joint Venture

One of the most common contributors to a failed joint venture is uncertainty about who is legally involved.

Before entering any joint venture arrangement:

• Confirm the legal identity of all parties
  
• Conduct ABN and regulatory checks

• Ensure individuals and entities are properly documented

We have seen failed joint ventures where profit entitlements could not be enforced because the correct party was never identified. This is a fundamental step to ensuring you receive what you are entitled to. 

2. Choose the Right Joint Venture Structure

Understanding how a joint venture differs from a partnership is critical.

A joint venture is typically:

• Project-specific
  
• Purpose-driven
  
• Time-limited

Most joint ventures operate under a joint venture agreement, rather than forming a new entity. Choosing the wrong structure can expose parties to unnecessary risk and is a frequent cause of failed joint ventures.

3. Define Clear Objectives from the Start

Unclear or shifting goals are a leading reason why joint ventures fail.

Before commencing:

• Define what success looks like
  
• Agree on commercial outcomes
  
• Document expectations in writing
  

Many failed joint venture case studies involve contributors providing extensive unpaid work because profit triggers were vague or constantly changed. Clear objectives are one of the most important factors to a successful joint venture.

4. Decide How Long the Joint Venture Will Last

There is no universal timeframe for a joint venture. The duration should reflect the project’s purpose.

For example:

• Development projects may end once an MVP is completed
  
• Revenue-share ventures may run for a fixed number of years
  

Defining duration, even broadly, reduces uncertainty and supports the success of your joint venture.

5. Plan How Disputes Will Be Managed

Disputes are a reality of commercial collaboration. A strong joint venture agreement should address:

• Deadlock resolution
  
• Exit triggers
  
• Consequences of non-performance
  

Poor dispute planning is a recurring theme in failed  joint ventures examples, particularly where no independent decision-making mechanism exists.

6. Allow for Early Exit Scenarios

Life circumstances change. A joint venture that does not allow for early exit is vulnerable to complete collapse.

Address in advance:

• Voluntary exits
  
• Forced exits
  
• Fair value allocation
  

Fair exit provisions significantly improve the outcomes of a joint venture by reducing conflict when circumstances change.

7. Prepare for New Parties Joining the Venture

Some joint ventures evolve over time. If growth is anticipated:

• Allow for additional parties
  
• Define onboarding terms
  
• Protect existing contributions

Failing to plan for expansion can destabilise an otherwise successful arrangement and lead to a failed joint venture.

8. Allocate Roles and Responsibilities Precisely

Assumptions destroy joint ventures.

Successful ventures clearly define:

• Who does what
  
• Who pays which costs

• Who is accountable for milestones

Unclear responsibility allocation is a major contributor to failed joint ventures, particularly when timelines slip or workloads become uneven.

9. Address Failure to Perform

Even well-intentioned parties may fail to meet their obligations under the joint venture agreement. .

Your agreement should cover:

• What constitutes failure
  
• Remedies and timeframes
  
• Dissolution triggers
  

Planning for underperformance is one of the most effective ways to protect the success of a joint venture.

10. Determine Intellectual Property Ownership

Intellectual property disputes frequently arise after a joint venture fails.

Clarify upfront:

• Who owns created IP
  
• What happens on exit
  
• Whether licences survive termination
  

Clear IP provisions reduce legal risk and support the long-term success of joint ventures.

11. Appoint Clear Project Leadership

Joint ventures require strong management.

Effective leadership involves:

• Oversight of deliverables
  
• Communication management

• Authority to break deadlocks

Many international failed joint venture examples stem from the absence of a clear decision-maker.

Final Thoughts: Preventing Failed Joint Ventures

Joint ventures can deliver innovation, growth, and shared success, but only when designed properly. Most failed joint ventures are preventable with careful planning, realistic expectations, and a well-structured joint venture agreement.

Strong foundations lead to better outcomes, improved collaboration, and higher chances of achieving the intended outcomes of a joint venture.

If you are considering a joint venture or want to strengthen an existing arrangement, legal advice early in the process can help you avoid the costly mistakes that lead to failed joint ventures.

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A common question we hear from business owners is “what is a joint venture?”, often followed closely by “how is a joint venture different from a partnership?” A joint venture (often referred to as a JV) is a business arrangement where two or more parties collaborate for a specific purpose while remaining independent businesses.

A joint venture is an association between parties for mutual benefit, usually created for a specific project, goal, or a limited period of time. Unlike partnerships, a joint venture allows each party to retain control over their core business while sharing resources, expertise, markets, or capital.

Joint ventures can be formed between companies in the same industry or completely different sectors, making them a flexible and strategic way to grow without merging businesses.

How Does a Joint Venture Work?

Joint ventures are commonly used where parties can each contribute something different to achieve a shared goal.

For example:

• In property development joint ventures, one party may own the land, another may provide funding, and another may manage construction.

• In infrastructure or telecommunications, companies may form joint ventures to reduce costs and share expensive resources.

• In international joint ventures, foreign companies often partner with local businesses to enter new markets and access existing customers.
  

Joint ventures may involve two or more parties and can include individuals, companies, or trusts. There is no single formula for how a joint venture must be structured.

Joint Venture Agreement: Why It Matters

Most joint ventures are governed by a joint venture agreement, which sets out:

• Each party’s rights and obligations
  
• Ownership interests and profit-sharing arrangements

• Decision-making authority and dispute resolution processes

• What happens to assets (including intellectual property) when the venture ends

Some joint ventures are contractual, while others are incorporated joint ventures, where a separate company is formed. An incorporated joint venture is more likely to become a saleable asset in the future.

Given the risks involved, having a properly drafted joint venture agreement is critical.

Joint Venture Examples

Common joint venture examples for small and growing businesses include collaborations between:

• Software developers and industry experts
  
• Digital marketers and service-based businesses
  
• Property owners and property developers
  
• International companies and local distributors
  
• Financiers and businesses seeking capital
  

These arrangements allow businesses to offer products or services they could not provide independently.

Benefits of a Joint Venture

Understanding the benefits of a joint venture helps determine whether this structure is right for your business. Common joint venture advantages include:

• Business diversification
  
• Entry into new or international markets
  
• Access to new distribution channels
  
• Leveraging another party’s expertise or resources
  
• Reduced costs and shared risk
  
• Defined scope, rewards, and responsibilities
• Potential to create a saleable asset

For many businesses, the flexibility of a joint venture makes it an attractive alternative to long-term partnerships or mergers.

Risks and Disadvantages of a Joint Venture

Like any business arrangement, there are joint venture disadvantages and risks to consider. Common issues include:

• Unequal effort or commitment between parties
  
• Loss of time or money
  
• Disputes over control or decision-making
  
• Intellectual property or confidentiality risks
  
• Reputational damage if the venture fails
  

We often see joint ventures fail because expectations were unclear or not properly documented from the outset.

Joint Venture vs Partnership: What’s the Difference?

A frequent comparison is joint venture vs partnership. While they may appear similar, there are important legal differences.

Partnership

• Long-term, whole-of-business arrangement
  
• Joint and several liability
• Each partner is responsible for the actions of the others
• Changes in partners usually require a new partnership

Joint Venture

• Project or goal-specific
• Several liability only
• Parties remain independent businesses
• Joint venture parties can enter or exit without restructuring the entire venture

Because of these differences, we generally discourage referring to a joint venture as a “partnership”.

Is a Joint Venture Right for Your Business?

A joint venture can be a powerful growth strategy when structured correctly. However, the benefits and risks of a joint venture should always be carefully weighed, and the arrangement properly documented.

If you’re considering entering a joint venture, professional legal advice can help ensure the structure, risk allocation, and joint venture agreement support your commercial goals.

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