Articles Posted in Intellectual Property

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This month, our plan is to shift our focus on copyright laws, which at this time, is at a juncture of its own. Artificial intelligence is quickly sweeping across many areas of life.  Google, for example, has just started funding a program that will write local news articles. Perhaps more stirringly, depending on who you are, a group of Dutch museums and researchers unveiled The Next Rembrandt, a portrait created by a computer that had analyzed thousands of the artist’s works.  Google has its hand in the realm of art as well and is working on “Deep Mind” which is a subsidiary-developed software that can generate music by listening to recordings.

For many years computers have been able to generate crude works of art, as though they were tools like many others.  But today, artificial intelligence has reached new technological heights.  It is capable of learning on its own.  Autonomous systems may program themselves based on information they perceive, without the need of being programmed by human beings.  They can evolve and make independent decisions.  With regards to art, machines have not quite achieved the ability to “learn” something so subjective, but the neural networks softwares can generate highly-refined works. You may research Recurrent Neural Networks for more information.

One of the traditional requirements for copyright protection is that a work be original. One of the criteria used to determine whether a work is original is whether it was created by a human being. In fact, Europe and the United States of America have their rationale for this rule. In Europe, where copyright law is based more on a moral theory, centering on the rights of authors and the work, and even parts of their person they put into a piece.  In the United States of America, copyright law is based more on a utilitarian theory – i.e., society and government want to incentivize people to put in the labor and create valuable things with the knowledge that they will be rewarded with the fruits of their efforts, and others won’t be able to steal or unjustly piggyback off the work.

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Today, we continue our focus on blockchain technology and surrounding rules and regulations. It is a nascent area and the subject of much debate. Last week, we discussed the jurisdictional issues this technology poses, as well as questions of liability, contract, and intellectual property. Today, we narrow our focus to one particular area of the blockchain realm: Asset-backed ventures.

The blockchain is by definition an open-ended and malleable tool. One of its most useful applications is to provide liquidity and capital where previous market inefficiencies precluded them.  This makes the biggest difference for small and mid-market ventures.  Crowd-sourcing income for job-producing smaller corporations will compound wealth for the international community in the decades to come in the developed world, and even more starkly in Africa and South Asia.

An emerging innovation in the blockchain space is to hinge digital coins’ value on an asset – i.e., the area of asset-backed tokens.  Variations of this idea include a coinage system based on the productivity of oil and gas ventures.  Investors purchase coins and fund the venture in its early stages and throughout.  Once the venture starts producing and oil is sold, the investor has a right to exchange his or her coin for the market price of that asset. Hence, the supply of oil rises, the price declines, communities prosper, and investors get a healthy return.  If they do not, there is a mechanism within the coin-value determination that adjusts for the poor judgment of the investor and devalues the coin. So, it behooves owners of the coin to choose fruitful projects.

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This week our focus shifts to a topic buzzing about the modern world. We have written on numerous occasions about cryptocurrency, but we have not discussed more pointedly the technological mechanism that yields it – i.e., the blockchain.  A complex, decentralized technology with the power, accuracy, and security to replace traditional financial systems, blockchain is the process that gives cryptocurrencies their true mechanism and value.  Its international scope can pose jurisdictional questions, its decentralized nature can puzzle tort plaintiffs, and the enforceability of “smart contracts” is an issue of first impression for most courts.  Additionally, lines must be drawn with regard to intellectual property.

To provide a brief background, the blockchain is the structure by which value is produced and conserved in cryptocurrencies.  Through a complex system of checks and balances, rewarded for solving algorithms, “miners” validate transactions by mathematically verifying them against previous transactional history of the asset in question. A “block” is created when transactions consolidate after nodes in a given network unanimously corroborate their veracity. From the block, the “miners” compete to solve a highly complex algorithm; the winner receives a coin and the block is added to a “chain.” An innovation has thus emerged onto which legal institutions must overlay their concepts.

Firstly, blockchain disputes run up against jurisdictional issues. The ubiquitous and decentralized nature of the blockchain requires careful consideration of the relevant contractual doctrines.  Applying the rules of whatever jurisdiction in which each node transacts would pose two problems: (1) the location of the transaction in question would be incredibly difficult to pinpoint; and (2) requiring compliance with every single potential location’s rules would be overwhelmingly unwieldy.  Therefore, choosing a governing law for the entire network is essential to ensure certainty.

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This week’s article explores the European Union’s brewing copyright law and its possible effects on the internet.  Proponents intend for the law to modernize and suit copyright law for the digital age.  Critics say the law will make the internet substantially less free.  Today we discuss the Directive on Copyright in the Digital Single Market, and more specifically, three of its most recently approved provisions that could pose problems to internet freedom: its right for press publishers, its filtering obligations, and its text-and-data-mining stipulations.

The law’s right for press publishers would allow news companies to collect compensation when their stories are shared on social media platforms.  Known as the “link tax,” it would require platforms to purchase a license to post current-events information coming from news institutions.  Current copyright law already protects journalistic articles as literary works; republishers must ask permission to use such content.  The proposed right, however, effectively expands this protection to data and facts that have already been published. Whereas only creative descriptions or puns in headlines are now protected, mere non-creative fact could be too; this would effectively hold information for ransom.  The purpose of copyright law is to grant a limited monopoly over specific creative works and original ideas.  To extend the law to envelop full ideas or factual content is nonsensical, and stymies the very processes copyright is meant to assist.  Rather than foster innovation by protecting its fruit, the law would chill it by stealing its raw material.  It would obstruct citizens from running businesses and from creating original products using factual information.  In a region without the First Amendment, there is cause for concern.

The law’s filtering provision would require all website hosting providers to use filtering software that checks content against a database of copyright material.  As the law stands, platforms such as YouTube, Facebook, and Twitter are not liable for the copyright infringement of their users, as long as when they are notified of it, they take it down.  The users who post it, however, are still liable to authors or authorship-rights holders.  The current law attempts a balance between honoring the investment of creative authors and promoting innovation through the spread of information.  The “notice and takedown” process allows rights holders to notify the platform, requires that the platform take action but only once it’s told, and reminds users that they may ultimately be held accountable for infringement; this spreads liability out somewhat evenly. The proposed version would subject this process to automation.  This would nominally place the majority of liability on platforms by forcing them to monitor content proactively.  However, the users and their speech will feel the brunt due to the platforms’ much stricter resultant guidelines.  The arbiter of this would be a machine, checking content against a copyright database, which would include factual material.  The necessary software also doesn’t exist—allowed uses of copyrighted content like parody or criticism would be at risk because artificial intelligence cannot distinguish them from infringement.  This imperils important content such as university lectures, for example.

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Now, by closing out this month and a deep dive into the future of copyright law comes a slightly more obscure reference to a recent change we’ve covered previously. Namely, what is, and what is not, protected under copyright when it comes to clothing? We now know that cheerleading uniforms are protected. However, what about bananas? An odd question, but one that the courts will be looking at as a recent case has been filed regarding the design and sale of banana costumes and has prompted questions in a Post-Star Athletica world. Is this the limit to Star Athletica? Has Justice Sotomayor’s comment about killing knockoffs come true already? Is it possible that the follow-up question to Star Athletica may be a banana battle?

The Now-Settled Case

The now-settled case was between Rasta Imposta, and Kmart, which is a subsidiary of Sears. Rasta Imposta had sold a banana costume and had good business relations with Kmart until Kmart notified Rasta Imposta that it would not be purchasing its costumes any longer.

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In general, parody is a well-tested defense to copyright infringement claims. For example, legal cases involving Barbie Girls and Pretty Women have hammered in the points quite definitively, though the question of what exactly is parody has persisted throughout the years.  Generally, it would be seen as something that ridicules the original work.  So, using the comical characters from the Game of Thrones to ridicule the current state of politics is probably fair use.

Recently, the question has popped up with a new and stranger answer that makes the situation complex. What is this potential new parody standard? How has it changed with time? Does this new standard go where it has never gone before?

The lawsuit

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Following in the theme of “advances in copyright law,” there is an additional snag that seems to occur every now and then. Who owns a picture of you? Naturally, a person may say: “Well, that is a picture of me, and if someone is selling it, or making money from it, then I own it and should be profiting as well.” We can extend this abstraction even further. A tattoo artist creates a design for a famous person, and with that person’s appearance on a film, or a video game, the tattoo artist demands payment. The famous person may say: “But it was a tattoo on my body. Why should I be forced to pay?” Ultimately, it comes to a two-fold situation: First, who is the author? Second, was there a license granted to make it acceptable?

What is authorship?

The first item to determine is authorship. In copyright, one does not necessarily have to be the one who “creates” the work to own the copyright. There are contracts known as “works-for-hire” agreements that can infuse ownership and authorship towards a legal entity. This would mean the legal entity (e.g., corporation, LLC) would be the author and able to file suit under the Copyright Act.

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In general, copyright lawsuits can be expensive. They require a lawyer who is well-versed with the copyright laws and federal court system. Yet, any creator or owner of copyright knows that the real scourge tends to happen with piracy. In some instances, no alterations, no messy facts, and no major damages can make it easier to recoup litigation costs. However, Hakeem Jeffries, who is the Representative for New York’s 8th Congressional District, has acknowledged the issue, prompting another round to get legislation passed starting this year. So, what is in the law? What is the possible effect? Why would this be more beneficial to a copyright holder?

What is a Small Copyright Claim?

The idea is simple and has been thrown around since 2013.  It is an expedited and limited system for copyright claims, akin to small claims courts that exist in state courts. This system would allow copyright holders to affordably pursue claims of up to $30,000, seek declarations of non-infringement, or DMCA claims under 17 U.S.C. 512(f). Also, the officers in this system would be different from federal judges and would be required to have experience in copyright laws and alternative dispute resolution.

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A question for you to consider: Imagine a world where music is created by a random set of numbers. Who owns the music? Is it the programmer? Is it the user who gave specifications for the music? It’s certainly an odd question to ask, and unsurprisingly, one without a clear answer. The question has been mostly unlitigated, although programs such as the Artificial Intelligence (“AI”) made by DeepMind can produce music by listening to it.  For example, some programs can restore or create mimics of Rembrandt. One might wonder: With the increasing role of technology, what are the limits to copyright laws? Who is a creator, and hasn’t this issue already been settled in courts?

Previous Litigation

To determine the possibility of authorship to AI, it’s important to simplify things. Technology is a little complex. What about monkeys, animals, or something that occurs naturally?

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The Supreme Court recently reviewed Matal, Interim Director, United States Patent and Trademark Office v. Tam (Matal v. Tam), which deals with trademark laws and what can be trademarked.  In fact, before the case reached the Supreme Court, we have previously discussed how much is unsettled in this area of trademark law. With this new decision, much of the law should be clearer with regards to what can be officially trademarked.

What are the case facts?

A rock group chose the band name “The Slants” because they wanted to “dilute the term’s denigrating force as a derogatory term for Asians.” When the band tried to trademark this name with the United States Patent and Trademark Office the application for registration was denied. The government agency denied the application because it was against 15 U.S.C. § 1052(a), also known as the Lanham Act, which prohibits the registration of any trademark that may disparage or bring into contempt any persons living or dead. The lead singer of the rock group, Simon Tam, challenged this denial initially through the administrative appeal process, which did not bring him any result. Then, Simon Tang brought his case to federal court. The federal court decided that the disparagement clause in the Lanham Act was unconstitutional because it violated the First Amendment’s Free Speech Clause. This decision was then appealed to the United States Supreme Court.

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