This blog is an update to “Legal Issues with Using AI to Create Content – Written with Help from AI” by Devin Ricci on April 28, 2023

On August 18th, the United States District Court for the District of Columbia issued an opinion stating that Artificial Intelligence (AI) generated artwork lacks “human authorship,” thus it cannot be the subject of a valid copyright claim. This decision raises many issues regarding copyright ownership that will require further court involvement and/or policy reform.

The primary challenge arising from AI-generated artwork pertains to copyright existence and ownership. Copyright law traditionally assigns authorship to individuals who create original works. However, in the case of AI, determining authorship becomes complex. Some argue that since AI systems are essentially tools programmed by humans, the programmers should retain authorship rights. Others believe that if AI can autonomously create something new without direct human intervention, it should be granted certain rights. This debate challenges the very essence of copyright law, which is built around the concept of human creativity.

Case Summary

The plaintiff, Stephen Thaler, used the “Creativity Machine,” a generative AI technology, to generate a piece of artwork. Thaler was unsuccessful with obtaining a copyright registration for the AI-generated artwork. In the copyright application, Thaler identified “Creativity Machine” as the author. The United States Copyright Office (“USCO”) denied the application because the work “lack[ed] the human authorship necessary to support a copyright claim.” Thereafter, Thaler filed a complaint in the D.C. District Court against the USCO and its director requesting the refusal be set aside and the AI-generated artwork be registered.

Thaler filed a motion for summary judgment arguing that AI-generated work is copyrightable because the Copyright Act provides protection to “original works of authorship.” This argument was premised on Thaler’s assertion that “author” is not explicitly defined in the Copyright Act and that the ordinary meaning of “author” encompasses generative AI. Ultimately, the D.C. District Court disagreed. The Court held the Copyright Act plainly requires human authorship. As explained by the Court, an “author” is “an originator with the capacity for intellectual, creative, or artistic labor,” which is necessarily a human being.

Implications and Considerations

This decision raises a host of questions and demonstrates that a more comprehensive legal framework is required as AI generated content becomes more sophisticated and prevalent. AI has revolutionized various industries, and the realm of creative expression is no exception. AI-generated artwork has gained significant attention in recent years, raising fascinating questions about the intersection of technology, creativity, and intellectual property rights. As AI systems create artwork independently, it becomes imperative to analyze the implications of this emerging trend on copyright, ownership, and the very definition of creativity. The legal framework is continually evolving and there are many issues that content creators, artists, and marketing companies need to be cognizant of as the legal framework develops.

If this ruling is upheld, a work created solely by AI theoretically is not susceptible to copyright protection at all. Because copyright law is preemptive, meaning it exclusively governs the subject matter of claims that fall within the purview of the Copyright Act, this could severely limit the ability to prevent infringement of an AI-generated work. In theory, because the work would not be protectable, there is no property right to infringe and may not be a legal basis to prevent third party use of the material. 

It is important to note that this recent decision may not stretch to underlying works created by a human, or to the extent a human could be considered a co-author of AI-generated content. In any event, it does implicate works where AI is fully creating the work with little to no human involvement. For example, if you use a program similar to the Creativity Machine and type into the program: “create a picture of Santa getting run over by a reindeer with cookies flying everywhere and a dog laughing,” the resulting image would not be protectable under this decision. In particular, advertising companies should be aware that AI-generated advertisements may not be subject to copyright protection.

However, there must be some middle ground between complete human authorship and complete AI-generated content. AI might be utilized in developing a work, but if there is enough human involvement it should be fair to say there is human authorship. Perhaps a photographer snaps a photograph and uses an AI editing tool to filter/edit the photo. Is the photographer’s involvement enough to make the edited photo a human-authored work? How much human involvement is required to constitute authorship? Courts will have to wrestle with the intersection of AI’s involvement in creative works to sort out these questions. Otherwise, it will be up to Congress to create a new framework for addressing AI generated or augmented works.

Conclusion

AI-generated artwork represents a groundbreaking fusion of technology and creativity that challenges established norms in the art and legal worlds. The complex questions it raises about copyright, authorship, and the essence of creativity underscore the need for collaborative efforts among legal experts, artists, programmers, and policymakers. Balancing the rights of human creators and the capabilities of AI will shape the future landscape of artistic expression and intellectual property rights.

On June 29, 2023, the Supreme Court adopted a restrictive view of the extraterritorial application of the Lanham Act, holding that federal trademark law cannot support a claim for trademark infringement against solely foreign conduct.

The case is Abitron Austria GmbH v. Hetronic International, Inc. Hetronic, an Oklahoma-based corporation, sells a wide range of radio remote controls in over forty-five countries, all of which are marked by their distinctive black-and-yellow trade dress. In 2006, Hetronic entered distribution and licensing agreements with Hydronic Steuersysteme GmbH (later purchased by Abitron Austria GmbH). These agreements authorized Hydronic to build and sell Hetronic-branded products so long as the parts were purchased directly from Hetronic.  In 2011, Hydronic began reverse-engineering Hetronic parts and contracted new suppliers to source them. When Abitron purchased Hydronic in 2014, they began selling products identical to Hetronic’s remote controls in foreign markets with the recognizable black-and-yellow coloring. Prior to litigation, Abitron’s global sales revenue from infringing products amounted to over $90 million, of which $240,000 came from U.S. sales.

A jury in the District Court for the Western District of Oklahoma awarded Hetronic $90 million in damages for Lanham Act violations to account for their lost revenue in both the U.S. and abroad. The District Court also granted Hetronic’s motion for a permanent injunction against Abitron’s infringement activities worldwide. The Tenth Circuit affirmed the injunction but narrowed it to the countries in which Hetronic marketed and sold products. 

The Supreme Court granted certiorari on the issue of whether the Lanham Act applies to infringing uses of trademarks outside of the United States. To assess the issue, the Court applied a two-step framework. The Court first asked if the statute explicitly applies to foreign conduct. The Lanham Act applies to persons who, without the consent of the trademark registrant, “use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark…[if] such use is likely to cause confusion…”. No mention is made of foreign versus domestic use of a mark, so the Court found the Lanham Act did not explicitly indicate it applies to foreign conduct.

Second, the Court considered the “focus” of the statute and whether the “conduct relevant to the focus” occurred in the U.S. Hetronic argued that the goal of the Lanham Act is to avoid consumer confusion or mistake, and so long as consumer confusion is likely to occur in the U.S., it does not matter whether the infringing products are sold in the U.S. or abroad. In response, Abitron contended – and the Supreme Court ultimately agreed – that the focus of the Lanham Act is to avoid the unauthorized use of a trademark in U.S. commerce, meaning that profits lost to trademark infringers abroad cannot be recovered in U.S. courts. “Use in commerce” is the “dividing line between foreign and domestic applications of these Lanham Act provisions.” Therefore, the basis of Abitron’s liability for infringing product sales is limited to the goods sold directly to U.S. customers, a mere $240,000.

The Court unanimously agreed that the infringement scope was limited to domestic activity but split 5-4 on the issue of when an infringing activity becomes “domestic”. Writing for the majority, Justice Alito opined that an infringing use is only domestic when the use in commerce occurs within a U.S. state or territory. Justice Sotomayor penned a concurrence in which she agreed with the overall finding but suggested that the trademark infringement provisions of the Lanham Act could extend to foreign sales when there is a likelihood of U.S. consumer confusion. 

During oral argument Justice Jackson posed hypothetical questions about how the Lanham Act could apply to foreign sales of infringing goods later resold in the U.S., such as when an American traveler purchases counterfeit designer purses in another country and then resells them inside of the U.S. Justice Jackson continues this line of thinking, writing that the Lanham Act could apply to a foreign company whose goods are resold in the U.S. or who engages in online activities that penetrate U.S. commerce without a physical presence in the country.

In many ways, the decision is unsurprising. The Supreme Court’s decision aligns with the international norm of each country granting and enforcing their own trademark rights within their own borders. In the future, U.S. trademark owners will need to seek relief in foreign jurisdictions if the infringement occurs outside of the U.S. The Supreme Court’s focus on “use in commerce” also aligns with prior U.S. case law in which courts have established jurisdiction over foreign companies that sold infringing goods in the U.S. Yet, the opinion also leaves open questions. The majority opinion explicitly limited the scope of the decision, stating that the case did not present the opportunity to deeply explore the meaning of “use in commerce”, so the particulars of that phrase will be left to the lower courts, leaving some uncertainty as to what would constitute actual participation in domestic commerce.

Read the opinion here.

Special thanks to Mattie Kleinpeter, Tulane Law Class of 2024, for her research and assistance in writing this article.

United States District Court Judge P. Kevin Castel issued an opinion on June 22, 2023, imposing sanctions and other penalties on the attorneys who relied on the artificial intelligence application, ChatGPT, in citing to fake cases in pleadings submitted to the court earlier this year.

Judge Castel’s thirty-four page opinion details the missteps of the lawyers, including filing the submission citing the fake cases, failing to withdraw the submission after opposing counsel identified the fake cases, doubling down on the existence of such cases when their validity was called into question, offering false information to the court in order to obtain an extension to a court ordered deadline, and providing “shifting and contradictory explanations” as to how and why the bogus case citations were submitted to the court.

The opinion makes clear that the real issue was the fact that the lawyers continued to mislead the court. Judge Castel wrote that, had the lawyers come clean about their actions shortly after they received the opposing parties’ brief questioning the existence of the cases, the outcome may have been different. While “poor and sloppy research” would amount to mere “objectively unreasonable” actions, the court found that the lawyers acted with subjective bad faith in violation of Federal Rule of Civil Procedure 11 based on all the subsequent failures to disclose.

Luckily for the offending attorneys, the court found that their submission of the fake opinions did not constitute a violation of 18 U.S.C. § 505. The statute states that it is a crime to knowingly forge the signature of a United States Judge or the seal of a federal court. Because the fake opinions did not include a signature or seal, the statute was not violated. But the court noted that the submission of fake opinions raises concerns with protecting the integrity of federal judicial proceedings and is an abuse of the adversary system.

Ultimately, the implicated lawyers were required to pay a penalty of $5,000 and to send letters to each individual judge falsely identified as the author of the fake opinions. Judge Castel’s opinion is a reminder that while a court may be forgiving of a lawyer’s choice to cut corners, lying to the court is still sanctionable.

Cite: Mata v. Avianca, Inc., No. 22-cv-1461, slip op. (S.D. NY. June 22, 2023).

Images from Opinion of the Supreme Court of the United States.

On June 8, 2023, the United States Supreme Court unanimously ruled in favor of Jack Daniel’s in the case of Jack Daniel’s Properties, Inc. v. VIP Products LLC, 599 U.S. ___ (2023). The case arose from Jack Daniel’s complaint about VIP’s sale of a dog toy designed to resemble a bottle of Jack Daniel’s whiskey. As shown below, there is no question that the VIP bottle is designed to resemble the Jack Daniel’s bottle, although several of the notable components are modified for comedic purposes.  For example, “Jack Daniel’s” is replaced with “Bad Spaniels”, and references to Old No. 7, is replaced with a numeric nod to dog excrement.

Jack Daniel’s sent a cease and desist letter to VIP shortly after the product launched. VIP filed suit, seeking a declaratory judgment that Bad Spaniels neither infringed nor diluted the Jack Daniel’s brand. Jack Daniel’s countersued, and the District Court initially ruled in favor of Jack Daniel’s, finding both infringement and dilution by tarnishment.

The 9th Circuit reversed on appeal. Finding that the design of the Bad Spaniels bottle was an “expressive work” parodying the elements of the Jack Daniel’s bottle for non-commercial purposes, the 9th Circuit held that the District Court erred in not applying the threshold First Amendment test derived from Rogers v Grimaldi, 875 F. 2d 994, 999 (2nd Cir. 1989). The goal of the Rogers test is to limit the application of the Lanham Act to expressive works where “the public interest in avoiding consumer confusion outweighs the public interest in free expression.” Under the Rogers test, the use of another’s mark in an expressive work will not be actionable under the Lanham Act unless it “has no artistic relevance to the underlying work whatsoever, or if it has some artistic relevance, unless [it] explicitly misleads as to the source or content of the work.” These factors are not a rigid test to be applied mechanically, but instead a balancing test that recognizes that the trademark rights of the senior user and the public’s right to not be confused must be carefully weighed against the artistic license granted to the junior user. The 9th Circuit remanded the dispute to the District Court to review in light of the Rogers test, where the District Court found that Jack Daniel’s could not prove the VIP product had no artistic relevance nor that the product was explicitly misleading.  The 9th Circuit affirmed the ruling, and the Supreme Court granted certiorari.

In a 9-0 opinion drafted by Justice Elena Kagan, the Supreme Court reversed the 9th Circuit’s holding. The Supreme Court criticized the 9th Circuit’s opinion that “because Bad Spaniels ‘communicates a humorous message,’ it is automatically entitled to Rogers’ protection.” The Court noted that applying Rogers to all matters where there is an expressive element would impermissibly extend Rogers to nearly all facets of life and potentially supplant the purpose of trademark law.  The Court explained that trademarks act “as source identifiers—as things that function to ‘indicate the source’ of goods, and so to ‘distinguish’ them from ones ‘manufactured or sold by others.’ And because of this, “trademarks are often expressive, in any number of ways.”

The opinion stresses that the defendant’s use must be considered in determining the applicability of the Rogers test. Citing to a litany of cases, the Court noted that the Rogers test has traditionally been used only in the context of “non-trademark” use, i.e., where the defendant has used the mark at issue in a “non-source-identifying way”, typically in an expressive function. For example, as noted by J. Kagan, the Ninth Circuit applied the Rogers test to evaluate the band Aqua’s song “Barbie Girl” when toymaker Mattel sued the group for trademark infringement. Here, the record presented evidence—including even VIP’s own admission—that VIP used the design elements as a source identifier for its products. As such, the Rogers test should not have been applied. 

The Court further reversed the 9th Circuit’s ruling as to the “fair use” defense related to dilution by tarnishment. The 9th Circuit opined that VIP’s use of the mark was non-commercial in nature even if it was used to sell a product because it “parodies” and “conveys a humorous message.” Without setting the limits of “noncommercial use”, the Court expressly rejected the opinion that every parody or humorous commentary would automatically benefit from this defense. Instead, the Court again turned to the purpose of the use as codified in Section 43 of the Lanham Act, finding that the defense does not apply when the use is as a designation of source for the person’s own goods or services, as VIP had admitted its use to be. 

In summation, the Court held as follows and remanded the case for further proceedings consistent therewith:

Today’s opinion is narrow. We do not decide whether the Rogers test is ever appropriate, or how far the “noncommercial use” exclusion goes. On infringement, we hold only that Rogers does not apply when the challenged use of a mark is as a mark. On dilution, we hold only that the noncommercial exclusion does not shield parody or other commentary when its use of a mark is similarly source-identifying. It is no coincidence that both our holdings turn on whether the use of a mark is serving a source-designation function. The Lanham Act makes that fact crucial, in its effort to ensure that consumers can tell where goods come from.

As the opinion notes, the Court did not make any decisions as to whether VIP actually infringed Jack Daniel’s trademark rights. That decision will be in the Ninth Circuit’s hands, who are ordered to review the dispute without using the Rogers test. Jack Daniel’s must still demonstrate that VIP’s products are likely to confuse an ordinary consumer as to the affiliation between VIP and Jack Daniel’s and dilute Jack Daniel’s brand, although such was already determined when the matter was first heard by the District Court. This case will likely be watched closely by famous brands who often find their brands parodied in unrelated products, as they seek to prevent any damage to their brand image.

We also note that this is the second case within the past month where the Supreme Court reined in a fair-use defense in the context of the nature of the use. In Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. ___ (2023), which we discussed here, the Supreme Court declined to extend fair use to the Andy Warhol Foundations’ licensing of a Warhol print that was based on a photograph of Prince. In that case, the Court focused on the economical use and purpose of the original photograph. The Supreme Court is clearly sending a message that fair use will continue to be fact intensive to the specific issue at hand and that the specific use of the contested material is a crucial focus point. 

When award-winning photographer Lynn Goldsmith snapped a portrait of the artist formerly known as Prince for Newsweek in 1981, she could not have predicted the cultural and legal impact the pop legend’s portrait would have. In 1984, Vanity Fair sought to license the photograph for an “artist reference” in a story about the musician. Goldsmith agreed to license a one-time use of the photograph with full attribution. Vanity Fair commissioned Andy Warhol to create a silkscreen using Goldsmith’s image and used Warhol’s piece in the magazine with attribution as promised. However, Andy Warhol would go on to create 15 additional works using the Goldsmith photograph, now known as the artist’s “Prince Series.” Although Warhol created the Prince Series nearly forty years ago and three years prior to Warhol’s death, it was not until 2016 when Condé Nast featured the “Orange Prince,” one of Warhol’s silkscreen prints, as part of its tribute to Prince’s passing that Goldsmith learned of the additional reproductions. Condé Nast paid the Andy Warhol Foundation for the Visual Arts, Inc. (“AWF”) $10,000 for the license, while Goldsmith received neither a license fee nor a source credit.

Upon failure to resolve the matter privately, AWF filed suit against Goldsmith, seeking a declaratory judgment that Warhol’s works did not infringe Goldsmith’s copyright in the original photograph, or, in the alternative, Warhol’s works constituted fair use of the subject photograph.[1] The Southern District of New York granted summary judgment to AWF on its claim of fair use, but the Second Circuit Court of Appeals reversed.

The Copyright Act motivates creativity by granting the author of an original creative work rights to reproduce their work, prepare derivatives works, and (in the case of pictorial or graphic works) display the copyrighted works publicly. This ownership interest in the creative work is balanced with the general public’s need to access the creative arts and exercise First Amendment rights. The fair use doctrine (the basis of AWF’s copyright infringement defense) allows use of a copyrighted work by persons other than the author for “purposes such as criticism, comment, news reporting, teaching . . ., scholarship, or research”[2] and is evaluated through multiple factors. On petition for writ of certiorari, AWF asked the Supreme Court to evaluate whether the Condé Nast licenses are fair use based on just the first fair use factor, “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.”[3] On this issue, the Supreme Court agreed with the Second Circuit that the first factor of fair use favored Goldsmith. Because AWF did not dispute that the remaining fair use factors favored Goldsmith, the Court affirmed the Second Circuit’s finding of copyright infringement.

The first factor of fair use considers the nature of and reasons for a copier’s use of an original work.[4] “The larger the difference, the more likely the . . . factor weighs in favor of fair use. The smaller the difference, the less likely.”[5] When the original and the copy share a similar purpose, there is a concern that the copy will substitute for the original. Because the copyright owner has the exclusive right to prepare derivative works of their original—that is, recasts, transformations, or adaptations of the original work—the copy must be substantially transformative to have a different purpose or character than the original and that degree of transformation must also be balanced against any commercial nature of the use.

AWF argued that the Prince Series is sufficiently transformative of Goldsmith’s original photograph because the artworks convey a different meaning or message than her photograph. Yet, because the first use factor focuses on the degree in which the infringing use has a different purpose or character, the Court ultimately sided with Goldsmith. The majority found that AWF’s licensing of the “Orange Prince” copy to Condé Nast is not a substantially different purpose than Goldsmith’s photograph. Goldsmith took the original photograph and licensed it to Newsweek for use in an article about Prince, and then similarly licensed the work to Vanity Fair in association with an article about Prince. AWF licensed the “Orange Prince” to Condé Nast for an article about Prince. “As portraits of Prince used to depict Prince in magazine stories about Prince, the original photograph and AWF’s copying use of it share substantially the same purpose,” wrote Justice Sonia Sotomayor for the majority.

The majority opinion stresses that its opinion is limited to AWF’s license to Condé Nast: “Only . . . AWF’s commercial licensing of ‘Orange Prince’ to Condé Nast, is alleged to be infringing. We limit our analysis accordingly. In particular, the Court expresses no opinion as to the creation, display, or sale of any of the original Prince Series works.”[6] A concurrence written by Justice Neil Gorsuch (joined by Justice Ketanji Brown Jackson) further argued that the subsequent use (AWF’s licensing to Condé Nast) is the relevant inquiry rather than considering the original copier’s (Andy Warhol) intent in creating the “Orange Prince.” Conversely, Justice Elena Kagan’s (joined by Justice John Robert’s) condemnatory dissent sharply criticized the majority’s purported failure to appreciate how Warhol’s work differed from Goldsmith’s photograph. The dissent specifically cited to the Court’s decision just over two years ago in Google LLC v. Oracle America, Inc., where Warhol’s works were deemed the “perfect exemplar of a ‘copying use that adds something new and different.’”[7] The majority opinion dismisses the dissent as “a false equivalence between AWF’s commercial licensing and Warhol’s original creation” which results in “a series of misstatements and exaggerations, from the dissent’s very first sentence.”[8]

Most often in fair use inquiries, the dispute focuses on a copier’s use of the copyrighted work. It is not often a court is presented with the issue of a third party’s independent use (that is, use without the involvement of the copy’s creator) of the subsequent work. The majority opinion is narrow and focuses on one specific fair use factor in the context of one specific use. The Court’s decision cautions that the motivations behind the third party’s use must be considered on their own merit, rather than allowing the use and motivations of the original work to automatically transfer to the third party’s use.

Significant also to the finding of infringement is that the remaining fair use factors—including the fourth factor, “the effect of the use upon the potential market for or value of the copyrighted work”—was admitted to favor Goldsmith. In fact, that is precisely what occurred in this matter. Throughout her career, Goldsmith regularly photographed celebrities and licensed those photographs to magazines for articles about that celebrity. Condé Nast needed a picture of Prince for its 2016 memorial article about Prince, and it licensed the “Orange Prince” from AWF instead of Goldsmith’s photograph. This use “served the same essential purpose of depicting Prince in a magazine commemorating his life and career.”[9]

Despite the pains made by the majority to limit the opinion’s reach, this decision will likely have significant ramifications for the art world, particularly art markets and licensing. While here the original artist’s use itself is unaddressed, the decision may temper a creator’s ability to market new creative works that incorporate copyrighted works. The fair use doctrine’s intent is to protect use of copyrighted works in particular contexts and has particular importance in artistic criticism and parody. Though a creator may still be able to express themselves artistically using the copyrighted work, finding a gallery or dealer willing to accept the work may prove more challenging. For those willing to accept the work, expect strong warranties and artist indemnification contract clauses.

Read the Supreme Court’s opinion here.

Special thanks to William Wildman, Loyola University New Orleans College of Law, Class of 2023, for his assistance in the researching and drafting of this post.

[1] See Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 382 F.Supp. 3d 312 (S.D. N.Y. 2019).

[2] 17 U.S.C. § 107.

[3] Id.

[4] Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. ___ (2023).

[5] Id.

[6] Id. at ____ (slip op. 21).

[7] Id. at ____ (dissent op. 2).

[8] Id. at ____ (slip op. 22, n. 10).

[9] Id. at ___ (slip op. 23, n. 11).

On May 10, 2023, the Texas State Senate passed H.B. 4, titled the Texas Data Privacy and Security Act (“TDPSA”), sending the bill to Governor Abbott’s desk for final signature. If signed into law, Texas will join a growing contingency of states enforcing comprehensive data privacy laws for their residents.

This alert provides answers to some general questions about the TDPSA as it is currently written. Be on the lookout for additional updates about the Act once signed by Governor Abbott.

Who will be required to comply with the TDPSA?

The TDPSA will regulate persons and entities that: (a) conduct business in Texas or produce products or services consumed by Texas residents; (b) processes or engages in the sale of personal data; and (c) is not a small business as defined by the U.S. Small Business Administration, unless the small business is involved in the sale of sensitive personal information. This applicability standard is broader than many other state privacy laws previously enacted because it does not have a revenue threshold. Rather, the applicability is based on whether the business qualifies a “small business”, which is a variable, context-specific standard, the status of which can be undone by its affiliations.

If you are a small business, but you are selling Texas residents’ sensitive personal data, the TDPSA will require you to obtain the data subject’s consent prior to sale.

Does my business process or sell personal data under the TDPSA?

“Personal data” is defined as any information that is linked or reasonably linkable to an identified or identifiable individual. If you are processing personal data, that means that your business is collecting, using, storing, disclosing, analyzing, deleting, or modifying of personal data. “Sale” means the sharing, disclosing, or transferring of personal data for monetary or other valuable consideration to a third party. We have seen, particularly in California, that “sale” can have significantly broader applications than traditional notions of what constitutes a sale, such as receipt of analytic data. It has yet to be seen whether this Act would take a similar broad approach.

What rights would be granted to Texas residents?

Texas residents could soon have certain rights related to their personal data, including rights of access, correction, deletion, portability, the right to opt out of certain processing, and the right to appeal a controller’s decision regarding a rights request. The Act could also require data minimization, processing limitations, data security, non-discrimination, third-party contracting, and data protection assessments, as well as impose certain requirements directly on entities who process data on behalf of a party that makes decisions on how that data is used.

Which other states have comprehensive privacy laws?

As of this writing, seven states have signed comprehensive data privacy laws. California was the first state with the California Consumer Privacy Act (“CCPA”), effective as of January 2020. California’s amendments to the CCPA and the Virginia’s Consumer Data Protection Act (“VCDPA”) became effective January 1, 2023. Colorado and Connecticut’s laws will go into effect on July 1, 2023, while Iowa and Indiana’s will go into effect in 2025 and 2026, respectively. Similar laws from Montana and Tennessee are also awaiting final signature.

When will the TDPSA be effective?

If signed, the TDPSA will be effective on March 1, 2024.

Who is responsible for enforcement? Is there a private right of action?

The TDPA does not contain a private right of action. Rather, all enforcement will be through the Texas Attorney General, but the AG can make a civil investigative demand following a consumer request.

What is the penalty for violations?

The penalty is $7,500 per violation plus attorney fees and investigation costs incurred by the AG.

Once the final act is signed, Kean Miller will provide additional resources regarding compliance with this Act. If you want to discuss this possible new Act in further detail, contact your privacy counsel.

Artificial Intelligence (AI) is a rapidly growing field that has the potential to revolutionize many aspects of our lives. One area where AI has already made significant inroads is in content creation. With the help of AI-powered writing assistants, businesses and individuals can generate high-quality content with minimal effort. However, there are legal concerns associated with using AI to generate content, like this blog article, which was created in part through the assistance of ChatSonic AI.

One of the primary legal concerns is related to copyright – both in terms of protecting the work generated and the concern of infringing someone else’s work. Copyright law protects original works of authorship, including literary works like blog articles. When an AI program generates a blog article, it is unclear who owns the copyright. Is it the person who programmed the AI, the AI itself, or the person who uses the AI to generate the content? This is a complex legal issue that has yet to be fully resolved. Currently, US law does not allow for copyright protection on works created solely by AI. This prohibition is currently being challenged in US Courts and will undoubtedly make its way through the appeals process over the next few years. Patent law has about a year’s head start on this issue, but the decisions have not been pro-AI. In 2022, the Federal Circuit ruled that computer programs cannot qualify as inventors under the US Patent Act. Thaler v. Vidal, 43 F.4th 1207 (Fed. Cir. 2022). It stands to reason that if a computer program cannot invent, it also cannot create a work of authorship. The owner of the AI software in Thaler recently filed a petition for a writ of certiorari asking the Supreme Court to review the Federal Circuit’s ruling. Interestingly, the same individual and computer program are behind the leading test case on the copyright side as well. But neither of these cases deals with the scenario where the AI is a co-inventor or, like this article, a co-author with a human. As such, we will not have definitive answers on ownership and protection of AI-generated works for years to come. 

Many are concerned with the potential for plagiarism. In the legal context, however, plagiarism is more properly referred to as “copyright infringement.” While AI writing assistants may be designed to generate original content, there is still a risk that the AI could inadvertently produce content that is substantially similar to existing work. This could result in accusations of plagiarism, causing reputational harm, or liability for infringement. “I didn’t know” is not likely to be a viable defense in such a claim. Most forms of infringement are strict liability torts, meaning that the owner of the infringed work does not need to prove the infringer’s intent or knowledge of infringement. Rather, the infringer’s knowledge and intent really only determine if enhanced damages may be assessed against the infringer. As such, using AI carries intrinsic risk because the user often has no way to determine the source of information or to check that the content is truly original. 

Liabilities may also arise from the publication of inaccurate information. If an AI-generated blog article contains inaccurate, misleading, or even defamatory information, who is responsible? US law does not currently allow suits against computer programs as they are neither natural nor juridical persons (i.e., entities). Furthermore, the use of AI software is typically conditioned upon the acceptance of license terms, which often pass the liability for content onto the end user of the software. In all likelihood, the poster of the content will be liable, at least under a negligence theory. 

To mitigate these legal concerns, it is important to take certain precautions when using AI to generate blog articles. First and foremost, it is essential to ensure that the AI writing assistant being used is reliable and produces high-quality, original content. It is also important to properly credit any sources used in the content generated by the AI. Another important step is to have a clear agreement in place that specifies ownership of the content generated by the AI. This can help avoid any disputes over copyright ownership down the line. It is also a good idea to have a disclaimer on any AI-generated content that clarifies that an AI program generated the content and that the user is responsible for verifying the accuracy of the information presented. Those looking for an example may look at the last line of this article. 

In conclusion, while AI-powered writing assistants can be a valuable tool for generating high-quality blog content, legal concerns must be considered. Copyright, plagiarism, and liability are all potential issues that must be addressed to ensure that the use of AI in content creation is legal and ethical. By taking the appropriate precautions, however, it is possible to harness the power of AI to create compelling and engaging blog articles while also protecting your legal interests.

Disclaimer: To be clear, this article was generated using the assistance of an AI program. A human has reviewed, revised, supplemented, and rewritten parts of this content. By doing so, an article that may have otherwise taken an hour and a half to write took about 45 minutes. Nevertheless, as with all blog articles, the reader is responsible for verifying the information presented and should not rely upon this article as providing any legal advice. 

On June 15, 2022, Governor John Bel Edwards signed into law Act No. 425, S.B. 426, named the “Allen Toussaint Legacy Act.”[1] The Act is named after the late Allen Toussaint, a famous New Orleans musician, songwriter, and producer. Toussaint was known for hits such as “Java,” “Fortune Teller,” “Southern Nights,” “Working in the Coal Mine” and “Mother-in-Law.”

After seeing drink koozies featuring Toussaint’s image sold by vendors outside of the Jazz Fest months after the artist died, Tim Kappel, an entertainment law professor at the Loyola University New Orleans, began pushing for a bill protecting the right to publicity in Louisiana.[2] Before the Act, despite the clear commercial benefit from products featuring Toussaint and other New Orleans legends like Fats Domino and Professor Longhair, the deceased musicians’ estates received no benefit from the sales nor had any power to stop the commercialization.

Act No. 425

The right of publicity is not a new concept in the United States. New York and California are leading examples of the right of publicity, particularly because those states are dense with famous individuals, who are more likely to be affected by right of publicity laws. For example, in the 1990s, the Ninth Circuit U.S. Court of Appeals found Vanna White could seek damages from Samsung for an advertisement involving a futuristic female robot turning the letters on a game show board.[3] Although the advertisement did not mention Vanna White by name, or use her actual image, the court held Samsung may have violated the law by “attempt[ing] to capitalize on White’s fame to enhance their fortune.”[4]

Act 425 creates a property right in the use of Louisiana residents’ identity for commercial purposes. The Act prohibits third party commercial use of an individual’s identity in Louisiana without written consent from the individual or the individual’s authorized representative or, if the individual is deceased, by more than 50% of the authorized representatives currently holding the right to commercialize. The Act defines an “individual” as “a living natural person domiciled in Louisiana or a deceased natural person who was domiciled in Louisiana at the time of the individual’s death.” “Identity” includes “an individual’s name, voice, signature, photograph, image, likeness, or digital replica.”

Violations can carry hefty penalties. Successful plaintiffs may recover the greater of $1,000 and the actual damages in compensatory damages, and (to the extent not duplicative of compensatory damages) payment of all profits earned from the violation. Similar to copyright infringement claims, plaintiffs must only prove the gross revenue attributable to the unauthorized use, and the defendant must prove any deductible expenses. A court may also award attorneys’ fees, costs, and expenses to the successful party, as well as equitable relief (e.g., injunctions or temporary restraining orders).

The Act carves out several exceptions, which include the “fair use” exceptions found in the Copyright Act, first amendment exceptions, and protections for works of creative expression. The Act also provides exceptions for advertisers, publishers, speakers, and others who passively transmit or distribute the commercialized material created by the third party.

The granted rights are not perpetual. Termination occurs either: (a) after 3 consecutive years of non-use by the authorized representative after the individual’s death; or (b) 50 years after the individual’s death. The Act is retroactive and will apply to individuals who died on or before the effective date of August 1, 2022. However, the Act will not apply to any alleged violations committed before August 1, 2022; also exempt are works created before this time, even if they are republished or distributed after that date. Any claim under the Act must be filed within 2 years of the alleged violation.

Future Considerations

Several interesting issues arise in response to this passage. Although Louisiana may not be dense with popstars and movie stars like New York, Louisiana does have its fair share of talented athletes. Considering the NCAA’s recent move toward permitting college athletes to profit off their name, image, and likeness, this Act will be instrumental in restricting commercialization of the Louisiana-domiciled athletes to only those authorized by the athlete themselves.

But the Act is not limited to persons in the public eye. It applies to any person domiciled in Louisiana or a deceased person that was domiciled in Louisiana at the time of death. Ordinary persons captured in videos that later go viral on social media often find their likeness plastered onto commercial products. The Act could provide some avenue to capture the monies made off of their “15 minutes of fame.” However, the Act does not provide for statutory damages and attorney fees are within the discretion of the court, which may complicate or discourage recovery by persons with limited means against unprofitable violations.

Legal scholars have expressed concern about defining identity as a property right that is “heritable, licensable, assignable, and transferrable.” Professor Jennifer Rothman at the University of Pennsylvania Carey Law School identified problematic potential for parents’ ability to transfer their children’s identity to third parties, as well as record labels, movie producers, sports leagues, and others who may pressure young, aspiring athletes and performers to assign rights to them in perpetuity.[5] Professor Rothman also questions whether identity being a property right could incur property-based liabilities. The Act specifically prohibits its property rights being subject to a security interest, material property distribution, or debt collection. However, other liabilities could compel commercialization against an individual or heir’s wishes.

Concluding Remarks

Commercialization of individual identities presents a compelling new right for Louisiana residents. How the Act operates in practice remains to be seen. The opportunity to “sign your name away” may be profitable in the short term, but could have long-standing implications if an exclusive license omits favorable termination or sunset clauses. Potential commercial licensees should further ensure that they actually have the right to make commercial use of an individual’s likeness—even if that person is an employee, a student, or has signed a general photograph release.

[1] https://legis.la.gov/legis/ViewDocument.aspx?d=1289308.

[2] James A. Smith, “An Allen Toussaint law? Attempting to ban koozies, unlicensed merchandise using likeness”, The Advocate (April 30, 2019) (available at https://www.theadvocate.com/baton_rouge/news/politics/legislature/article_5ec7233c-6bab-11e9-8279-fb05c40acaea.html).

[3] White v. Samsung Elecs. Am., Inc., 971 F.2d 1395 (9th Cir.1992), as amended (Aug. 19, 1992).

[4] Id. at 1396.

[5] Jennifer E. Rothman, “Louisiana’s Allen Toussaint Legacy Act Heads to Governor’s Desk”, Rothman’s Roadmap to the Right of Publicity (Jun. 6, 2022) (https://rightofpublicityroadmap.com/news_commentary/louisianas-allen-toussaint-legacy-act-heads-to-governors-desk/).

Steven Thaler filed an application for copyright registration in a two-dimensional image entitled “Creativity Machine”.  In his application, Thaler stated that the work “was autonomously created by a computer algorithm running on a machine”.  The Review Board of the United States Copyright Office (“Board”) denied the application stating it lacked human authorship necessary to support a copyright claim.  He filed a request for reconsideration arguing the human authorship requirement is unconstitutional.

In its ruling of February 14, 2022, the Board upheld its prior decision stating that this work lacked the required human authorship necessary to sustain a claim in copyright.  The Board noted court decisions limiting copyright protection to creations by human authors.  Further it cited the Compendium of U.S. Copyright Office Practices, which has long mandated human authorship for registration.  The Board stated, “After reviewing the statutory text, judicial precedent, and longstanding Copyright Office practice, the Board again concludes that human authorship is a prerequisite to copyright protection in the United States and that the Work therefore cannot be registered”.  It concluded that Thaler cited no case law or other precedent that would undermine the Office’s construction of the Copyright Act.

Dr. Keith Bell published a book in 1982 entitled Winning Isn’t Normal which provides strategies for success in athletics. He markets the books through online retailers and his own website. One of the passages in the book that is well known is entitled the WIN Passage. He offers merchandise, including t-shirts and posters, that display the WIN Passage. The WIN Passage is subject to a separate copyright registration and he offers licenses for its use.

In December 2017, Chisholm Trail High School’s softball team and color guard posted the WIN Passage to their Twitter accounts. The posts credited Bell as the author but did not include a copyright watermark that Bell imprints on his digital reproductions of the WIN Passage. The school district did not seek his permission before publishing the tweets. Bell discovered the tweets through online searches.

Bell waited almost a year to notify the school that two of its social media accounts had infringed the copyright. The school district removed both posts and told Bell it was a “teachable moment”. After settlement negotiations broke down, Bell sued for copyright infringement. The school district invoked the fair use defense and moved to dismiss the claim for failure to state a claim. The district court granted the motion to dismiss and awarded attorney’s fees to the school district.

The Fifth Circuit addressed the fair use defense noting it balances protecting an author’s work and permitting others to reference them in cultural conversation. While the overarching goal of a copyright is to stimulate intellectual activity for public good, courts have recognized a limited privilege of use by others in a reasonable manner without the owner’s consent. Congress codified the fair use doctrine in the Copyright Act of 1976 and listed four factors to be considered in applying the doctrine, namely (1) the purpose and character of the use, including whether such use is commercial in nature or for nonprofit educational purposes: (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the work as a whole; and (4) the effect of the use upon the potential market for or value of the work.

Analyzing these factors, the Fifth Circuit concluded the school’s use was in good faith. The use was not commercial as nothing indicated that the school district profited from posting a one-page excerpt from the book. These tweets only served to inspire students to strive for success. Bell argued that the tweets could indirectly benefit the school district by bolstering the professional reputation of its athletic department. However, the court found that the tweets did not tout the success of these programs and were not intended to motivate donors to contribute to the programs. Bell did not argue he lost revenue due to the school’s use of the passage but claimed the use could reduce the incentive to purchase Winning Isn’t Normal or related merchandise; however, the Court noted that the tweets did not reproduce a substantial portion of the work so as to make available a substitute for the original work. Bell failed to allege a substantial adverse impact on a legitimate market for his copyrighted work.

Finally, the Fifth Circuit found that the district court did not abuse its discretion in awarding attorney’s fees to the school district. It noted that Bell has a long history of suing public institutions and non-profit organizations over de minimis uses of his work. Bell was unable to identify any actual financial injury associated with that use and brought suit anyway. The court said that attorney’s fees were an appropriate deterrent to Bell and other copyright holders.