In the space of a single week, AI-assisted reverse engineering stopped being a hobbyist curiosity and became a business problem. As Dr. Alex Wissner-Gross noted in The Innermost Loop on October 12, Claude Opus 5.5 has “unleashed hundreds of AI-decompiled games,” including near-flawless Halo ports, “leaving publishers playing whack-a-mole.” Two days earlier, his October 10 issue flagged a developer who used the same model to build seven open source clones of Adobe’s creative suite and declared that “software is over.” If you sell software, license it, or buy a company that owns it, this one is about you.
What Happened, and Why Business Owners Should Care
Reverse engineering means studying a finished product to work out how it functions, then building something that does the same job. In software, that has always been slow, skilled, expensive work. That cost was a quiet moat. A competitor could legally rebuild your product’s functionality, but it rarely made economic sense.
That moat is draining. According to Kotaku, browser versions of Halo: Combat Evolved, Grand Theft Auto: Vice City and Call of Duty: Black Ops appeared after an AI model was left to decompile them, work that used to take months. Ars Technica reports that the Artcraft developer calls his Adobe look-alikes “clean-room replacements” and promises feature parity in months. Reviewers say the apps are nowhere near finished, and no lawsuit had been reported as of this writing.
The takeaway is not that every product is about to be copied overnight. It is that the cost of copying the function of software is collapsing, while the law that decides what counts as copying has not changed. Your protection now depends far more on which legal tools you put in place than on how hard your product is to rebuild.
The Legal Impact: 6 Critical Rules on Reverse Engineering
1. Copyright protects your code, not your features
Copyright covers expression, not ideas or functional methods. In Sega v. Accolade (9th Cir. 1992), the court held that disassembling a program is fair use “where disassembly is the only way to gain access to the ideas and functional elements” and there is a legitimate reason for that access. A competitor who rebuilds what your software does, in its own code, may owe you nothing under copyright. A decompiled port that reproduces your original code and art is a different story, and that is why game publishers have strong takedown claims while a functional clone is harder to stop.
2. Trade secret law does not stop reverse engineering
Many companies assume their “secret sauce” is protected as a trade secret. Read the statute. The federal Defend Trade Secrets Act says improper means “does not include reverse engineering, independent derivation, or any other lawful means of acquisition.” The Illinois Trade Secrets Act is just as direct: “Reverse engineering or independent development shall not be considered improper means.” Anything that ships inside your product, where a buyer can study it, gets much weaker trade secret protection once AI makes that study cheap. Logic that stays on your servers is in a better position.
3. Your license agreement may be your strongest wall
Contract can do what copyright and trade secret law will not. In Bowers v. Baystate Technologies (Fed. Cir. 2003), the court enforced a shrink-wrap license that banned reverse engineering, holding that “the Copyright Act does not preempt Mr. Bowers’ contract claims.” The Seventh Circuit, which covers Illinois, enforced shrink-wrap license terms in ProCD v. Zeidenberg (1996). Be candid about the limits, though. Judge Dyk dissented in Bowers, and the Fifth Circuit’s older Vault v. Quaid decision went the other way. A no-reverse-engineering clause binds only people who actually agreed to it, so an enforceable click-through and clean acceptance records matter.
4. Anti-circumvention law adds a separate layer
If your product uses encryption or other access controls, the DMCA’s 17 U.S.C. § 1201 makes getting around them its own violation, whether or not the copying that follows would be infringement. Section 1201(f) carves out a narrow exception for reverse engineering aimed at interoperability. Technical protection measures don’t just slow copiers down. They can give you a second legal claim.
5. The clone itself may not be protectable
Under Thaler v. Perlmutter (D.C. Cir. 2025), copyright requires a human author, and the U.S. Copyright Office has said that material generated by AI must be disclaimed when you register. A business that builds its own product by having an AI rebuild someone else’s may end up owning far less than it thinks. Whether a single AI model reading a binary and writing new code counts as a true “clean room,” which traditionally means two teams kept apart, is untested. That part is our opinion, not settled law.
6. Look and feel is a trade dress question
Even a lawful functional clone can get into trouble if it copies a distinctive appearance closely enough to confuse buyers. That is a trademark and trade dress question, and it is often the most practical claim against a look-alike product. Cannabis brands fight the same battle over packaging, as our colleagues at Cannabis Industry Lawyer explain in their trademark guide.
What Howard East Clients Should Do Now
- Audit your license terms. Confirm your EULA or terms of service bans reverse engineering, decompiling and automated analysis, and that customers affirmatively accept them. Pair that with AI training restrictions in your contracts.
- Map what is really secret. Move high-value logic server-side where you can, and tighten your confidential information definitions and NDAs for anything you show partners.
- Register what you can. Copyright registration for your human-authored code and trademark registration for your brand and interface make enforcement faster and cheaper.
- Diligence code provenance in deals. If you are acquiring a software company, ask how its product was built and whether any of it was AI-reconstructed from a competitor. As we have written, diligence reprices the deal.
- Have an enforcement plan. Cease-and-desist letters, DMCA notices and, when needed, litigation through our affiliated commercial litigation practice at Howard Law Group.
Reverse engineering is legal far more often than most founders assume. The question is no longer whether someone can rebuild your product, but whether you have the right documents and claims ready when they do.
Protect your software before someone clones it. Book a consultation with Howard East to review your licensing, trade secret and IP strategy with our intellectual property attorneys. Building an AI product yourself? Our AI company lawyers can help.
This article is for informational purposes only and does not constitute legal advice.
