December 19, 2023
This year has brought us some of the early rounds of the fights between creators and AI companies, notably Microsoft, Meta, and OpenAI (the company behind ChatGPT). In addition to the Hollywood strikes, we’ve also seen several lawsuits between copyright owners and companies developing AI products. The claims largely focus on the AI companies’ creation of “large language models” or “LLMs.” (By way of background, LLMs are algorithms that take a large amount of information and use it to detect patterns so that it can create its own “original” content in response to user prompts.)
Among these cases is one filed by the Authors Guild and several prominent writers (including Jonathan Franzen and Jodi Picoult) in the Southern District of New York. It alleges OpenAI ingested large databases of copyrighted materials, including the plaintiffs’ works, to train their algorithms. In early December, the plaintiffs amended their complaint to add Microsoft as a defendant alleging that Microsoft knew about and assisted OpenAI in its infringement of the plaintiffs’ copyrights.
Because it is the end of the year, here are five “things to look for in 2024” in this case (and others like it):
- What will defendants argue on fair use and how will the Supreme Court’s 2023 decision in Goldsmith impact this argument? (In 2023 the SCOTUS ruled that Andy Warhol’s manipulation of a photograph by Lynn Goldsmith was not transformative enough to qualify as fair use.)
- Does the fact that the output of platforms like ChatGPT isn’t copyrightable have any impact on the fair use analysis? The whole idea behind fair use is to encourage subsequent creators to build on the work of earlier creators, but what happens to this analysis when the later “creator” is merely a computer doing what it was programmed to do?
- Will the fact that OpenAI recently inked a deal with Axel Springer (publisher of Politico and Business Insider) to allow OpenAI to summarize its news articles as well as use its content as training data for OpenAI’s large language models affect OpenAI’s fair use argument?
- What impact, if any, will this and other similar cases have on the business model for AI? Big companies and venture capital firms have invested heavily in AI, but if courts rule they must pay authors and other creators for their copyrighted works it dramatically changes the profitability of this model. Naturally, tech companies are putting forth numerous arguments against payment, including how little each individual creator would get considering how large the total pool of creators is, how it would curb innovation, etc. (One I find compelling is the idea that training a machine on copyrighted text is no different from a human reading a bunch of books and then using the knowledge and sense of style gained to go out and write one of their own.)
- Is Microsoft, which sells (copyrighted) software, ok with a competitor training its platform on copyrighted materials? I’m guessing that’s probably not ok.
These are all big questions with a lot at stake. For good and for ill, we live in exciting times, and in the arena of copyright and IP law I guarantee that 2024 will be an exciting year. See you then!
December 5, 2023
The web is rife with information and advice on how to register a trademark and, more importantly, how to protect one once you’ve got it. Much of the latter boils down to policing your mark by sending cease and desist letters whenever you suspect someone is infringing it. Good advice and, in many cases, all you need to ward off an infringer or potential infringer. But cease and desist letters aren’t always enough. Two recent cases highlight different routes that businesses traveled to protect their marks, one wrapping up quickly while the other dragged on for six years of litigation, with opposite results.
The rapid resolution came in a proceeding Mattel, Inc. brought this summer against Burberry Ltd. For anyone who has been living under a rock, Mattel makes Barbie — the dolls, the movie, the inescapable cultural “phenomenon.” The toy company brought an action before the United States Patent and Trademark Office to prevent fashion house Burberry — perhaps best known for its famous plaid-lined trenchcoats — from registering the mark “BRBY.”
Mattel claimed BRBY was likely to cause confusion because it is “visually similar” to Barbie and, “when spoken aloud, the marks are phonetically identical.” What’s more, according to Mattel, the likelihood of confusion was increased because many products sold by Mattel bearing the Barbie trademark overlap with the types of goods that Burberry was proposing to make with the BRBY mark, such as clothing, jewelry, and cosmetics. As the action stated, “[c]onsumers would be likely to wonder if, or assume that, [Burberry’s goods] are licensed by or affiliated with [Mattel].”
It’s impossible to tell exactly what went down in the proceeding because the parties reached an undisclosed settlement. However, Burberry subsequently withdrew its application to register the BRBY mark so I think we can take it as game over — in just under four months. If you ask me, it seems unlikely that anyone was going to get confused between Barbie and BRBY even though the vowelless mark could be pronounced in the same way. But clearly, Burberry figured the value of the BRBY mark wasn’t enough to justify protracted litigation.
At the other end of the spectrum, we have a federal litigation between Alfwear, Inc. and Mast-Jaegermeister US, Inc. (“MJUS”), initially filed in August 2017 and, after six years in the courts, concluded this September with the 10th Circuit Court of appeals affirming the lower court’s grant of MJUS’ motion for summary judgment.
Alfwear is a Salt Lake City company that makes outdoor apparel and gear under the brand name “KÜHL” (yes, it’s German for “cool”) and has registered trademarks for this brand name. MJUS is the US-based distribution arm of the German company that makes a herbal liqueur under the brand name — you guessed it — Jägermeister, which had a fairly repulsive shot of popularity in the mid-aughts as the drink of choice for frat parties.
As stated in the 10th Circuit’s decision, in 2016 MJUS “launched an advertising campaign to distance itself from its association with ‘pukey frat guys’ and spring break parties and remake the Jägermeister image as a ‘more premium’ brand and emphasize its German heritage.” Mast-Jaegermeister’s campaign did this by incorporating German words such as “kühl” “perfekt,” “and “dekadent ” into phrases such as “Drink it ice kühl” and “Be kühl — throw it back.” These phrases, which were intended to be easily understood by English speakers, were consistently accompanied by the Jägermeister mark.
In August 2017, Alfwear filed suit against MJUS, asserting that MJUS’s unauthorized use of the term “kühl” in connection with the advertising of MJUS’s goods or services infringed Alfwear’s registered trademarks and constituted federal and common law unfair competition. The district court held that MJUS’s use of “kühl” did not infringe on Alfwear’s “KÜHL” trademark, which it uses on its line of outdoor products, “because no reasonable juror could find a likelihood of confusion between the parties’ marks.” Yet Alfwear, refusing to back off, appealed and the case trundled on.
The 10th Circuit affirmed the district court, agreeing that MJUS’s use of “kühl” was unlikely to cause any consumer confusion and noting that MJUS had never put the word “kühl” on a Jagermeister bottle or any promotional clothing, and that Alfwear and MJUS’s products generally occupied distinct markets. (It is, however, worth mentioning that Alfwear has a pending trademark application for “KÜHL” in connection with wine, which presumably suggests that Alfwear is contemplating entering a market closer to that in which MJUS sells its products.)
So why did Mattel triumph in a matter of months while Alfwear fought MJUS for six years and, ultimately, lost? Was Mattel’s case really that much stronger than the one brought by the maker of KÜHL? Well, one key distinction is that there is overlap between Mattel’s Barbie-branded products and what Burberry sells, whereas there is no current overlap between KÜHL and Jägermeister. Knowing this, should Alfwear have realized it had a weaker case than Mattel and backed off earlier or not filed suit at all?
I think not. It isn’t always easy to accurately predict whether you’ll win or lose a trademark dispute because there are so many variables. Is your adversary going to be reasonable (like Burberry) or stand firm (MJUS)? How much time and effort have you and your adversary invested? Do you know all of your adversary’s motivations?
With that said, despite the risks, protecting a mark through litigation is a critical part of maintaining a mark and its value. Each time you don’t defend your mark, it potentially weakens your rights to it in the future. This is cumulative and can make it possible for others to obtain similar marks for their products. Moreover, even a loss might have a silver lining. It can aid in future decision-making when considering expansion into new markets.
November 21, 2023
This week, I’m taking a break from talking about court cases and instead focusing on a draft bill aimed at creating a federal right of publicity that was introduced in October by a bipartisan group of Senators. A quick refresher: the right of publicity allows an individual to control the use of their voice, and laws or cases governing this right exist in about two-thirds of the states.
Now, with generative AI and “deepfake” technology, celebrities and entertainment companies are pushing for greater protection against the creation of unauthorized digital replicas of a person’s image, voice, or visual likeness. And the Senate, it appears, is responding, raising concerns among digital rights groups and others about First Amendment rights and limits on creative freedom.
Before diving into the specifics of the bill and its potential implications, I want to step back and talk about the underlying reasons for intellectual property laws. These laws are the subject of entire law school classes (I took several of them), but I can quickly summarize two fundamental reasons why they exist. The first is to encourage artistic works and inventions, an idea that can be found in the U.S. Constitution. The idea is that allowing creators (in the case of copyright law) and inventors (in the case of patent law) to exclusively reap the economic benefits of their work will incentivize people to make art and invent useful things. Notably, both copyrights and patents are in effect for a limited amount of time: for patents, 20 years from the date of the application, while copyrights run for the life of the creator plus 70 years (note that length; it’s going to come up again).
The second reason is to prevent consumer confusion. This is the central concern of trademark and unfair competition laws, which are intended to ensure that no one other than the company associated with a particular good or service is selling that good or service.
The idea behind the right of publicity (you can read more about it in the context of generative AI here), includes a dash of both of these rationales. It ensures that individuals can profit from their investment in their persona by preventing others from using their name, likeness, voice, etc., without their permission. It also prevents brands from claiming someone endorsed a product without that person’s consent.
With generative AI and the ease with which anyone can now create a digital replica of a celebrity to endorse a product or perform a song, artists and entertainment companies are worried that the current patchwork of state laws isn’t enough. Hence, the Nurture Originals, Foster Art, and Keep Entertainment Safe Act of 2023 or the NO FAKES Act of 2023, which, if enacted, would create a federal right of publicity. (A side question: in hiring staff, do Members of Congress test job applicants’ ability to come up with wacky bill titles that can be made into acronyms? Because this one certainly took some legitimate skill.)
The bill protects against the creation of an unauthorized “digital replica,” which the NO FAKES Act describes as: “a newly created, computer-generated, electronic representation of the image, voice, or visual likeness of an individual that is [nearly indistinguishable] from the actual image, voice, or visual likeness of an individual; and is fixed in a sound recording or an audiovisual work in which that individual did not actually perform or appear.”
In other words, NO FAKES bars using a computer to create an audiovisual work or a recording that looks or sounds very much like a real person when that person has not consented. This proposed right bars the creation of a digital replica during a person’s lifetime and for 70 years after death (the same as existing copyright laws). In the case of a dead person, the person or entity that owns the rights to the deceased’s publicity rights (often, the deceased’s heirs) would have to consent to the creation of a digital replica.
If NO FAKES is passed, anyone who creates an unauthorized digital replica can be sued by the person who controls the rights; the rights holder can also sue anyone, like a website or streaming platform, who knowingly publishes, distributes, or transmits a digital replica without consent. This is true even if the work includes a disclaimer stating the work is unauthorized.
That said, the Act as currently drafted does include some exceptions intended to protect the First Amendment. For example, NO FAKES states that it is not a violation of the Act to create a digital replica that is used as part of a news broadcast or documentary or for purposes of “comment criticism, scholarship, satire, or parody.”
Some other things to note:
- The right to control the creation of a digital replica does not extend to images that are unaccompanied by audio.
- The draft bill states that the right to control digital replicas “shall be considered to be a law pertaining to intellectual property for the purposes of section 230(e)(2) of the Communications Act of 1934. This means that Internet service providers cannot rely on Section 230 to avoid liability.
Now, it is likely the draft will have undergone significant amendments and revisions if and when it is passed. As mentioned above, digital rights groups and others worry that the right of publicity can be used to litigate against speech protected by the First Amendment, as public figures in the past have tried when they don’t like something that has been said about them in the media.
To me, the Act seems a bit suspicious. You may notice I’ve stressed how the Act extends protection against digital replicas to 70 years post-mortem, the same exact length as copyright protection. Isn’t this expansiveness a bit much considering the current state of play is no federal right of publicity at all? The extreme length of the proposed protection, coupled with the Act eliminating the use of disclaimers as a shield for liability, suggests NO FAKES is less about protecting the public and more designed to prolong celebrities’ and entertainment companies’ abilities to profit. After all, the right to publicity created in the NO FAKES Act can be sold by an actor or their heirs to a company like, say, a movie studio… that could then, in theory, continue to feature digital replicas of the aged or deceased actor in their films unchallenged for seven decades after death. Thelma and Louise 4: Back From the Abyss is coming, and Brad Pitt won’t look a day over 30.
Good, perhaps, for Brad Pitt. The rest of us, maybe not.
