AI vs IP

Can Artificial Intelligence software claim copyright in any work that was created using their algorithms?

The short answer is “no”, since only humans can establish copyright in original creative works. Copyright can be assigned to a company or trust, or it can be created under various forms of creative commons, but there still needs to be a human author behind the copyright material. While copyright may lapse over time, it then becomes part of the public domain.

However, the extent to which a human author can claim copyright in a work that has been created with the help of AI is now being challenged. A recent case in the USA has determined that the author of a graphic novel, which included images created using Midjouney, cannot claim copyright in those images. While it was accepted that the author devised the text and other prompts that the software used as the generative inputs, the output images themselves could not be the subject of copyright protection – meaning they are either in the public domain, or they fall under some category of creative commons? This case also indicates that, in the USA at least, failing to declare the use of AI tools in a work when applying for copyright registration may result in a rejected application.

Does this decision mean that the people who write AI programmes could claim copyright in works created using their software? Probably not – as this would imply that Microsoft could establish copyright in every novel written using Word, especially its grammar and spelling tools.

On the other hand, programmers and software developers who use copyright material to train their models may need to obtain relevant permission from the copyright holders (as would anyone using the AI tools and who uses copyright content as prompts), unless they could claim exemptions under “fair dealing” or “fair use” provisions.

We’re still early in the lengthy process whereby copyright and other intellectual property laws are tested and re-calibrated in the wake of AI. Maybe the outcomes of future copyright cases will depend on whether you are Ed Sheeran or Robin Thicke….

Next week: Customer Experience vs Process Design

 

Literary legacies

As more classic works of literature come out of copyright protection, and enter the public domain, publishers and booksellers can look forward to sales of re-packaged titles, for which they won’t have to pay royalties. With the right combination of content and marketing, it’s as good as free money.

Under the Berne Convention, copyright in published works is the life of the author plus 50 years, although many territories have extend this to life plus 70 years (100 in Mexico!). These periods may be subject to extensions if the executors of literary estates are able to renew the existing copyright (under previous copyright regimes) or by issuing revised editions of existing works which are sufficiently different to the original so as to constitute an entirely separate publication – but these are exceptions.

By allowing copyright to lapse, this should mean key works will always be in print, and even more obscure titles can be revived with little to no production cost. For nearly 20 years, Google Books has been scanning works out of copyright and putting them online. But even this process can run into copyright limitations, and questions of provenance (as illustrated by the treatment of George Orwell’s “1984”). But this has also encouraged some enterprising individuals to sell “reprints” of facsimile copies of scanned titles, when the buyer thought they were purchasing an authentic copy, or a contemporary edition (i.e., newly typeset and printed).

Intellectual property law may be complex, and in need of reform to reflect modern technology and contemporary society. But as copyright works pass into the public domain, there remains the issue of moral rights. These give writers the right to be identified as the author of a work (“attribution”), and to protect their work against inappropriate use (“derogatory treatment”). Moral rights also protect writers against “false attribution” – i.e., a publisher can’t claim a work was written by an author who didn’t actually write it.

Moral rights vary from country to country (e.g., Germany, UK, USA, Australia), but generally do not survive when copyright expires. Which can mean that unscrupulous publishers may feel emboldened to “modify” original texts at will, given some recent examples of key 20th century novels. Surely not what authors and their legacies should be subject to?

Next week: Public Indifference?

To be or NFT?

If there’s one consistent lesson to be learned from Blockchain and crypto is that the enabling technology often outpaces our understanding of the viable use case, commercial application or sustainable business model. For example, smart contracts have only recently proven their value with the rise of decentralized finance (DeFi). Even then, they are not perfect and if not well-coded can result in hacks, losses or other damage. Plus, until scaling (transaction throughput) and gas fees (transaction costs) are properly resolved, mass adoption is still some way off.

CryptoPunk #7523 (Image sourced from Reuters)

The latest crypto phenomenon is the market for NFTs (non-fungible tokens). Artworks in the form of digital files are being created, auctioned and traded for serious (or very silly?) amounts of money – just Google EtherRock, Beeple, CryptoPunk or Rare Pepe for recent examples.

NFTs are not just confined to digital art – animation, video, music and text are all being created in the form of NFTs. In addition, NFTs are being minted to represent ownership or other IP rights for physical artworks, real estate assets, collectibles and luxury goods.

Why would anyone pay the best part of US$12m for the original digital file of CryptoPunk #7523, a copy of which I have displayed above?

Perhaps we need to consider the following:

First, the image above is simply a low-res web image, easily reproduced via copy and paste – it’s not the “real” image as represented by the code or digital file embedded in the NFT. The original file is owned by the NFT buyer, and if it is an edition of one, then that is the only authentic version. Scarcity (as well as kudos) is a key market driver in NFTs – but only if someone else attaches financial value to the work (just as in any art market).

Second, owning the NFT does not necessarily mean you own the copyright or other rights associated with the art work. (I may own a Picasso painting, but I don’t own the image contained in the work.) So, apart from holding an NFT in your digital wallet or displaying it in a virtual art gallery, the only right you have is to re-sell the work. This means you can’t commercialise the image for t-shirts, on-line redistribution or reproduction (unless the owner has agreed to grant such rights within the NFT). (My use of the image here would be covered by the “fair use” principle, for the purposes of illustration and/or critical analysis.)

Third, unless you are able to export the NFT from the marketplace or platform that sold it, the NFT may “vanish” if the platform goes offline for any reason. (Doubtless, platforms need to enable token transfers to other market places and to users’ own digital wallets, otherwise there could be a lot of stranded and/or worthless NFTs in years to come.)

Fourth, the creator of the original work may be entitled to a % of the resale value of the NFT. This is obviously an important consideration for artists and other content creators, and I see this as a positive development. By extension, musicians, authors, film-makers and designers can more easily track and control the downstream revenue generated by the use and licensing of their works by third-party marketplaces, streaming platforms or 3D printing and fabrication services.

Fifth, NFTs support improved authentication, provenance and chain of ownership, as well as bringing more transparency to the world of art auctions – valuations, bidding and prices could all be hashed on the Blockchains that track the NFTs.

Finally, if NFTs are seen as a form of bearer bond (linking ownership to whomever controls the token), they could also be used to package up a portfolio of different crypto or digital assets, and auctioned as a single lot. The buyer could then unlock the disparate assets, and combine them into subsequent bundles – bringing a new dimension to block trades and the transfer of large bundles of stocks.

Next week: I got nothing

 

Copyright – Use It Or Lose It?

I was browsing in one of the last remaining record stores in Melbourne’s CBD last week, flipping through the secondhand racks for independent vinyl releases of the 70s and 80s. (I was in search of some sounds of the Paisley Underground, if anyone is interested.) The shop owner, who also runs a record label, lamented that there are a whole bunch of out-of-print recordings of that era that he wants to license for reissue in physical format – but in many cases, the rights have since been acquired by major record companies that have no interest in re-releasing this material themselves. Yet, when approached for permission, oftentimes they ask for prohibitive licensing fees, making the venture uneconomic.

The sound of the Paisley Underground (on vinyl, of course) – Image sourced from Discogs.com

The irony is, most times the major labels have no idea what they have in their back catalogues, because the content they own has been scooped up through corporate mergers or is still managed via a series of archaic territorial licensing and distribution deals based on antiquated geo-blocking practices. Plus, understandably, they are usually more interested in flogging their latest product than curating their past.

There’s nothing wrong with content owners wanting to charge licensing fees, but surely they need to be commensurate with the likely rate of return for the licensee (we’re usually talking about a small circulation among enthusiasts, after all). Plus, the original production costs have either been written off, or amortized on the books – so, given there is little to no new cost to the content owner, ANY additional revenue stream would surely be welcome, however modest?

But what about streaming and downloads? Surely all this back catalogue content is available from your nearest digital music platform of choice? Well, actually no. In many cases, “out-of-print” also means “out-of-circulation”. And even if back content is available to stream or download, the aforementioned geo-blocking can mean that rights owners in certain markets may choose not to make the content available in specific countries. (I’ve even had the experience where content I have purchased and downloaded from iTunes Australia is no longer available – probably because the rights have subsequently been acquired by a local distributor who has elected to withdraw it from circulation.)

Of course, copyrights eventually expire or lapse, and unless renewed or otherwise maintained, usually fall into the public domain (but not for many years…..). Again, nothing wrong with affording copyright owners the commercial and financial benefits of their IP. But, should content owners be allowed to sit on their assets, and do nothing with their IP, despite the willingness of potential licensees to generate additional income for them?

In a previous blog, I ventured the idea of a “use it or lose it” concept. This would enable prospective licensees to re-issue content, in return for an appropriate royalty fee or share of revenues, where the copyright owners (and/or their labels, publishers and distributors) no longer make it available – either in certain markets and territories, or in specific formats. To mitigate potential copyright exploitation, copyright owners would be given the opportunity to explain why they have chosen to withhold or withdraw material that had previously been commercially available. There could also be an independent adjudicator to assess these explanations, and to help set an appropriate level of licensing fees and/or royalties.

Meanwhile, on-line sites like Discogs.com provide a welcome marketplace for out-of-print back catalogue!

Next week: Big Data – Panacea or Pandemic?