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How Intellectual Property Law Regards Generative AI

Learn how the law perceives generative AI and its role in content created for businesses.
AI-generated content has unlocked affordable opportunities for small-business owners to quickly expand their reach. However, the question remains: Do you actually own the content produced by AI? The answer isn’t straightforward.
Content that’s entirely generated by AI, without any human editing, is not eligible for copyright protection and is considered public domain. This means that if your insightful blog post was written by ChatGPT, it can be republished word for word by a competitor. The real question is, how much human input is needed to claim ownership of AI-generated content? The legal framework around intellectual property in AI is still developing and is continually evolving.
To help you navigate this complex landscape, this post will cover the basics of intellectual property and copyright as they relate to AI, and it will offer insights into responsibly integrating generative AI in your business. We’ll dive into a case study featuring a fictional gluten-free bakery’s branding elements created with AI and uncover the challenges it faced. Finally, we’ll examine some pending lawsuits against OpenAI, which are expected to help clarify and shed light on the evolving legal framework for AI content.

Highlights From the Masterclass: Intellectual Property and AI

This blog is based on a live Masterclass by IP attorney Elizabeth Milian, a managing partner at The Milian Legal Group, where she focuses on brand protection strategies and trademark law.
There are two main IP considerations as a small business. First, you want to make sure that your key IP (brand, logo, trade secrets) are protected through trademarks and copyright. Second, you don’t want to incorrectly claim as your own IP any AI-generated content you use to promote your business. Below are the key takeaways from Elizabeth’s session.

Overview: What Is IP Law?

Intellectual property (IP) law refers to the legal rights and protections granted to individuals over their creative works, also known as creations of the mind. These rights give creators exclusive control over the use of their creations for a specific period of time, allowing them to benefit from their original work. Knowing IP law is crucial in marketing and sales, because you don’t want the assets you create using AI to get you in legal hot water.

Why IP Matters

Branding, including elements like a business’s name and visual assets, such as logos, holds significant value for any company. These brand elements play a crucial role in achieving sales and driving revenue. Strong branding also helps businesses stand out in both the online marketplace and brick-and-mortar settings. While the law provides special protections to safeguard your brand, it’s essential to take the correct steps to ensure those protections are in place.

What IP Provides: The Power of Protection

Federal trademark protection, especially through the United States Patent & Trademark Office (USPTO), is considered the gold standard for safeguarding your business name and brand based on its use in commerce. Trademarking your brand offers both legal and practical advantages, allowing you to enforce your rights against unauthorized use, which helps prevent consumer confusion and protect your brand’s value. By deterring and handling infringement, trademark protection also secures your market share and preserves your reputation. Taking proactive steps to trademark your brand can save you from costly, time-consuming rebrands and the risk of receiving cease-and-desist letters.

What Is a Trademark?

A trademark acts as a source identifier, distinguishing your goods or services in the marketplace from those of your competitors. Businesses frequently trademark their names, logos, unique packaging, catchphrases and even specific colors to create a unique brand identity. Intellectual property plays a vital role in the economy and is considered a valuable business asset. Registering your IP supports your business’s value, which can be crucial in attracting investors and funding, as well as in enabling scaling and growth.

Best Practices: Distinguish Yourself From Others

Creating a unique brand identity supports consumer clarity, helping your business stand out in the marketplace. Levels of IP protection vary on a spectrum, from high to low, depending on the distinctiveness of the brand elements. Unique or fanciful names receive the highest level of protection, while descriptive terms offer less protection, and generic names are ineligible for trademark protection.

AI Naming Tools: Finding a Unique Brand Name With AI Tools

Be cautious when using free online naming tools, because they often generate “brandable” names or logos based on basic prompts to create “unique” or “creative” names for your business. Elizabeth explored this by testing a hypothetical business – a gluten-free bakery – on five different free naming sites.
The first site Elizabeth used generated a variety of made-up words by combining two existing words into a new one. However, our favorite AI-generated name was already in use by an actual business in the bakery category with a registered trademark dating back eight years.

AI & IP: Logo-Generation Tool

You can use ChatGPT not only for generating business names but also for creating logo ideas. For our hypothetical bakery, Elizabeth prompted the AI for a logo concept with a joyful, festive look and specific color suggestions. The initial result was then compared to an existing business logo. Although there was overlap in colors, with both using shades of yellow and pink, the designs themselves were distinct.

AI & IP: Output Considerations

Creating a unique brand identity supports consumer clarity, helping your business stand out in the marketplace. Levels of IP protection vary on a spectrum, from high to low, depending on the distinctiveness of the brand elements. Unique or fanciful names receive the highest level of protection, while descriptive terms offer less protection, and generic names are ineligible for trademark protection.

Types of IP: What Is Copyright Law?

Intellectual property law applies to any works that meet three specific requirements: the work must be original, qualify as a work of authorship (meaning it’s created by someone engaging in a creative process), and exist in a fixed and tangible medium of expression. Copyright protection typically lasts for the lifetime of the author plus 70 years. In cases of work-for-hire, the copyright term extends up to 95 years.

Benefits of Having a Copyright

Holding a copyright grants the author or copyright holder an exclusive set of rights over their work. These rights include the ability to reproduce the work in copies, create derivative works (adaptations based on the original) and control public distribution through sale, transfer, rental, lease or lending. Additionally, copyright provides the right to publicly perform and display the work in various settings.

What Copyright Does Not Protect

Copyright does not protect ideas, elements not created by the author (such as facts, functional rules or short phrases) or non-original works. Only original, creative expressions by the author are eligible for copyright protection.

What Is Originality?

Originality means that a work must be independently created by the author, not copied from other sources. The author is considered the maker or originator of the work. Additionally, the work must exhibit at least a minimal degree of creativity. This requirement for originality is rooted in both copyright statutes and the Constitution, as reinforced in the landmark case Feist Publications v. Rural Tel. Serv. Co., 499 U.S. 340, 369 (1991).

Copyright Law and AI

Copyright law and AI present unique challenges. AI-generated output is inherently derivative of the data it was trained on, meaning that any AI output carries the potential risk of copyright infringement. There’s no copyright protection for portions of new work that incorporate copyrighted material unlawfully, making it crucial to verify that AI-generated content doesn’t inadvertently infringe on existing copyrights.

AI Output Copyright Considerations

Are works generated entirely by AI, with no human authorship, eligible for copyright protection? The answer is no – human authorship is a fundamental requirement for any copyright claim. (This was affirmed in Thaler v. Perlmutter (Register of Copyright), U.S. District Court DC, Aug. 18, 2023.)
Content created solely by AI is not eligible for copyright protection, meaning AI-generated works hold no exclusive rights and are considered part of the public domain – free for anyone to use, transform or display.
Here’s an example. If a business publishes blog posts using AI-generated outlines as a starting point, is the content protected? The answer depends on the originality contributed by the author. If the author adds creative wording, and selects and arranges information in a unique way, those elements may meet the originality requirement and be protected. However, only the new, original contributions are eligible for protection; there is no exclusive right over the preexisting material generated by AI.
Any copyright protection applies only to the expressive elements a human adds to preexisting material. However, distinguishing between non-original, unprotectable material and copyrightable human expression isn’t always straightforward. As the law continues to develop, several cases are currently pending that may help define these boundaries in the context of AI-generated content.

Some Prominent Legal Cases – Copyright & AI Case Watch

Alter v. OpenAI Inc., 1:23-cv-10211, (S.D.N.Y.): In several ongoing cases, more than a dozen prominent writers, including John Grisham, Jonathan Franzen and Jonathan Alter, are alleging that OpenAI and Microsoft are liable for copyright infringement. The core argument centers around unauthorized use: OpenAI allegedly used copyrighted works without permission to train its GPT models. Plaintiffs claim this use has caused economic harm, arguing that the unauthorized use of their works has resulted in financial losses. They contend that, without access to these copyrighted materials for training, OpenAI and Microsoft would not have a viable commercial product. This has, they argue, unfairly damaged the market for professional authors’ works.

New York Times v. OpenAI 1:23-cv-11195, (S.D.N.Y.): The New York Times claims that millions of its copyrighted works were used to train Microsoft’s Copilot (formerly Bing Chat) and OpenAI’s ChatGPT without authorization. According to the NYT, its copyrighted works were both directly and indirectly infringed by being included in training datasets. The AI tools allegedly generate outputs that recite the NYT’s content verbatim, closely summarize the content, mimic the expressive style of the NYT and sometimes even falsely attribute outputs to the NYT.

Resources Discussed During the Masterclass

  • USPTO trademark database: This can be used to search for any active trademarks that AI tools may have led you to believe are available.
  • USPTO website: This includes other resources on copyright and trademark.
Navigating copyright in the age of AI is complex, yet it’s critical for safeguarding your business’s original work and brand identity. With AI tools now able to assist in content creation, businesses can achieve new levels of efficiency and creativity. However, understanding the boundaries of IP law is essential; AI-generated content may be public domain or at risk of copyright issues without human authorship. As landmark cases continue to unfold, staying informed on IP best practices will allow you to leverage AI responsibly, protecting both your content and your brand’s long-term value.

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