Navigating Copyright in the Age of AI

In 2023, the Copyright Office launched an initiative to explore the copyright issues created by AI-generated content, including whether AI-generated work is copyrightable. The Copyright Office announced their examination in the Federal Register in August 2023 and received thousands of comments in response. This year, the Copyright Office intends to release its interpretations of copyright law as it relates to the emerging technology in the realm of generative AI. As creators wait for the full report, many new developments in copyright law shed light on the relevant issues.

AI is powerful. It can reproduce copyrighted works, like music and digital art, replicate voices and likenesses, and generate material when prompted by a user. Further, AI is trained on a massive body of work, much of which is protected by copyright requiring licensing for commercial use. Federal Courts must decide how to enforce copyrights, protect artists, and promote innovation against the backdrop of constantly evolving technology.

For example, in late 2023, publisher and copyright-holder the New York Times brought suit against OpenAI, the owner of Chat-GPT, for copyright infringement. Specifically, the New York Times alleged that OpenAI used millions of its articles to train ChatGPT without obtaining a license for such use. Recently, OpenAI made a discovery request to the New York Times seeking reporter notes and memos related to each article to prove the publisher has a valid copyright in every single article in question. This ongoing case will have far-reaching implications for how AI models can be trained and to what extent AI companies owe damages to various copyright holders for their unauthorized use of materials.

Another court recently held that images created by the AI-powered Midjourney image generator for a comic book were not copyrightable material because the author of the comic book claiming the rights was not the author of the images. The court decided that Midjourney, not a human, created the images and thus has no author and deserves no copyright protection.

The Copyright Office, through which artists register their work for copyright protection, has stated it will not give copyright protection to "works produced by a machine or mere mechanical process that operates randomly or automatically without any creative input or invention from a human author." The Office was unpersuaded by the argument that the output of AI models depends on the creative input of the artist writing the prompt.

On this topic, the US Copyright Office says:

"Digital art, poems, and books generated using tools like DALL-E, Stable Diffusion, Midjourney, ChatGPT, or even the newly released GPT-4 will not be protected by copyright if they were created by humans using only a text description or prompt, USCO director Shira Perlmutter warned."

The Copyright Office further stipulates that AI-generated content may be valid subject matter for copyright protection if a human author contributed enough creative expression to create the content. This may include cases where the author modifies the AI-generated content

to such an extent that the human can be said to have authored it. The analysis will be fact-specific, and the question will be analyzed case-by-case.

The Trademark Filing Process

Trademarks are important pieces to many businesses. They are how people associate a business with a particular service or product. While there are certain common law protections provided to trademark holders even if they do not file with the United States Patent and Trademark Office (“USPTO”), filing with the USPTO provides the most protection for a mark. This will serve as a general outline of the process for filing trademark applications with the USPTO. 

Identifying the Mark and Goods and/or Services Provided

The first step is to identify the mark you wish to protect. This could be a design mark (ie. a logo), a wordmark (ie. a word or phrase), or both. The key is to determine how you are using or plan on using the mark and identifying whether certain colors or fonts are going to be integral portions of your mark. Another key thing to identify is what goods and/or services are going to be provided in connection with the mark. This aids in the review of existing marks and is required in the application process.

Reviewing Existing Marks

Once you have identified your mark, you should review USPTO records to determine whether there are any existing registered marks that will create issues for your application. The most common would be a mark that creates a “likelihood of confusion.” The determination of whether there is a likelihood of confusion involves an analysis of numerous factors, including the similarity of the marks, the similarity of goods and/or services, and the geographic proximity of where the goods and/or services are provided.

Use in Commerce

The next step is to determine whether you are, or will soon be, using the mark in commerce. A “use in commerce” is a public-facing use, such as use in advertising, on a website, or on packaging for a product. This determination drives which type of application will be filed with the USPTO.

Which application to file

Whether your mark is being used in commerce will guide which application needs to be filed with the USPTO. A Section 1(a) application is used when the mark is being used in commerce. A Section 1(b) application is used when the mark has not been used in commerce. There are various other types of applications but Section 1(a) and Section 1(b) applications are the most common.

Application Timeline

Section 1(a)

After filing a Section 1(a) application, the USPTO reviews the application and the applicant receives a response in approximately three months. The response is typically one of two types: an office action or a notice of publication.

An office action is a letter from the USPTO identifying issues with the application that must be addressed before the mark can be registered. These range from administrative issues such as disclaimers as to certain portions of the mark or adjusting descriptions of the marks or the goods and/or services, to likelihood of confusion refusals.

If an office action is issued and the applicant decides to continue to pursue registration, the applicant has 6 months from the date the office action was issued to file a response. If an applicant does not respond within 6 months, the application will be abandoned. If a response is filed, within 1-2 months the USPTO will either approve the mark for publication or issue a final letter which an applicant can appeal.

Once an application is approved for publication, the mark will be published in the Trademark Official Gazette, allowing others to oppose the registration and, if no one opposes, the mark will be officially registered with the USPTO in approximately 3 months.

Section 1(b)

A Section 1(b) application follows a similar pattern to the Section 1(a) application except for one key distinction: once the application is approved and the mark is published for opposition, the applicant has 6 months to file either a Statement of Use showing the mark being used in commerce or an extension, which provides an additional 6 months for the applicant to start using the mark in commerce. An applicant can file up to 5 separate 6 month extensions.

Post Registration Maintenance

Once your mark is officially registered, there are certain filings that need to be done between the 5th and 6th year after registration, between the 9th and 10th year, and then every 10 years thereafter to show that you are still using the mark.

 The trademark filing process is lengthy with various nuances throughout. If you have a mark that you believe could be registered with the USPTO, Erickson | Sederstrom has attorneys that can assist with this process from start to finish or anywhere in between

Third Party Solicitations – Are These Services Necessary?

When you are forming a new entity, registering a trademark, or even just filing deed, you will be receiving numerous documents from your attorney in order to facilitate that process. Be wary of solicitations you receive from third parties requesting payment for services or documents you may not need or which may already be taken care of by your attorney. Some of these solicitations include the following:

• Obtaining Certificates of Good Standing;

• Name publishing;

• Federal Labor Law poster;

• Annual Records Statement;

• Obtaining a copy of your recently filed deed; and

• Publication of your trademark registration on a third-party site.

These solicitations are sent to request payment for services that may not be required. While some of these items or services are necessary, they may already be handled by your attorney as part of the services they are providing to you. If you receive a letter soliciting payment for something you feel may be handled by your attorney or may not be necessary, reach out to an attorney to make sure. They can verify whether what you received is something you need or whether it can be disregarded.

Bitcoins and the Law

Last year Bitcoin and other cryptocurrencies went “mainstream” with regular financial reporting of prices and tales of fortunes made or lost.  This has prompted many ordinary investors to try their hand at cryptocurrency investing.  This has fed an ever widening set of cryptocurrency products being offered to consumers and businesses alike.  These products range from Wall Street backed crypto currency exchanges like coinbase.com to initial coin offerings (“ICOs”) now being used by start-ups to attempt to bypass the regulations that normally apply to the capital-raising process.
 
The sheer exuberance surrounding cryptocurrencies and the often inaccurate depiction of cryptocurrencies as not subject to ordinary laws is fertile ground for fraudsters and high-risk unsound investment schemes.   For example, numerous market players still promote their ICOs as not subject to state or federal securities regulation despite convincing and sound conclusions to the contrary.  In fact, use of an ICO may very well expose the entity (and its individual managers) using it as a capital-raising device to potential civil and criminal charges, sanctions, and personal liability to individual investors.  
 
Due diligence requires that before you or your business involves yourself in any crypto currency undertaking that you consult with competent and experienced business counsel so you can fully understand the true risk of the undertaking.  Investors who have already lost money in a crypto currency scheme should also exercise due diligence by consulting with counsel because, under existing law, those who involved them in the scheme may be personally obligated to repay for the lost investment. 
 

Is Your Small Business Ready for Nebraska’s Updated Data Breach Notification Law?

On July 21, 2016, new changes to Nebraska’s Financial Data Protection and Consumer Notification of Data Security Breach Act become effective. In the event of a breach, any individual or commercial entity that conducts business in the state of Nebraska and owns or licenses computerized data that includes personalized data is required to 1) conduct an investigation to determine the likelihood that the personalized information has been or will be used for an unlawful purpose, and 2) notice any affected Nebraska residents. If notice is necessary, the individual or commercial entity must also notify the Attorney General. Moreover, if the personal information is maintained by an individual or commercial entity, but not owned or licensed by the individual or entity, they must notify the owner or licensee of the breach. Failure to comply may result in suit against the individual or commercial entity for damages a resident incurred because of the breach.

New updates to the law include defining personal information to include “a user name or email address, in combination with a password or security question and answer, that would permit access to an online account”. Additionally, the law is now triggered when encrypted data is stolen in addition to the confidential process or key used to decrypt the data.

Any individual or commercial entity that maintains and follows its own notice procedures regarding data breaches is deemed to be in compliance with the law. However, many other laws or regulations also cover data breaches, such as HIPAA, HITECH, GLBA, and other states where a resident affected by the breach resides. Businesses large and small should contact their attorney to ensure that they have a policy that complies with all applicable laws and regulations and reduces the risk of liability after a breach.