AI vs IP

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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

 

Trust in Digital IDs

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Or: “Whose identity is it anyway?”

Over the past few years, there have been a significant number of serious data breaches among among banks, utilities, telcos, insurers and public bodies. As a result, hackers are able to access the confidential data and financial records of millions of customers, leading to ransomware demands, wide dissemination of private information, identity theft, and multiple phishing attempts and similar scams.

What most of these hacks reveal is the vulnerability of centralised systems as well as the unnecessary storage of personal data – making these single points of failure a target for such exploits. Worse, the banks and others seem to think they “own” this personal data once they have obtained it, as evidenced by the way they (mis)manage it.

I fully understand the need for KYC/AML, and the requirement to verify customers under the 100 Points of Identification system. However, once I have been verified, why does each bank, telco and utility company need to keep copies or records of my personal data on their systems? Under a common 100 Points verification process, shouldn’t we have a more efficient and less vulnerable system? If I have been verified by one bank in Australia, why can’t I be automatically verified by every other bank in Australia (e.g., if I wanted to open an account with them), or indeed any other company using the same 100 Points system?

Which is where the concept of Self-Sovereign Identity comes into play. This approach should mean that with the 100 Points system, even if initially I need to submit evidence of my driver’s license, passport or birth certificate, once I have been verified by the network I can “retrieve” my personal data (revoke the access permission), or specify with each party on the network how long they can hold my personal data, and for what specific purpose.

This way, each party on the network does not need to retain a copy of the original documents. Instead, my profile is captured as a digital ID that confirms who I am, and confirms that I have been verified by the network; it does not require me to keep disclosing my personal data to each party on the network. (There are providers of Digital ID solutions, but because they are centralised, and unilateral, we end up with multiple and inconsistent Digital ID systems, which are just as vulnerable to the risk of a single point of failure…)

But of course, banks etc. insist that not only do they have to ask for 100 Points of ID each and every time I open an account, they are required to retain copies or digital versions of my personal data. Hence, we should not be surprised by the number of data hacks we keep experiencing.

The current approach to identity in banking, telcos and utilities is baffling. Just a few examples I can think of:

1. In trying to upgrade my current mobile phone plan with my existing provider, I had to re-submit personal information via a mobile app (and this is a telco that experienced a major hack last year, resulting in me having to apply for a new driver’s license). If I have already been verified, why the need to ask for my personal data again, and via a mobile app?

2. I’ve lived at my current address for more than 5 years. I still receive bank statements intended for the previous occupant. I have tried on numerous occasions to inform the bank that this person is no longer living here. I’ve used the standard “Return to Sender” method, and tried to contact the bank direct, but because I am not the named account addressee or authorised representative, they won’t talk to me. Fair enough. But, the addressee is actually a self-managed superannuation fund. Given the fallout from the Banking Royal Commission, and the additional layers of verification, supervision and audit that apply to such funds, I’m surprised that this issue has not been picked up the bank concerned. It’s very easy to look up the current registered address of an SMSF via the APRA website, if only the bank could be bothered to investigate why the statements keep getting returned.

3. I have been trying to remove the name of a former director as a signatory to a company bank account. The bank kept asking for various forms and “proof” that this signatory was no longer a director and no longer authorised to access the account. Even though I have done this (and had to pay for an accountant to sign a letter confirming the director has resigned their position), if the bank had bothered to look up the ASIC company register, they would see that this person was no longer a company officer. Meanwhile, the bank statements keep arriving addressed to the ex-director. Apparently, the bank’s own “systems” don’t talk to one another (a common refrain when trying to navigate legacy corporate behemoths).

In each of the above, the use of a Digital ID system would streamline the process for updating customer records, and reduce the risk of data vulnerabilities. But that requires effort on the part of the entities concerned – clearly, the current fines for data breaches and for misconduct in financial services are not enough.

Next week: AI vs IP  

 

Revisiting Macau – Asia’s Casino Theme Park

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During my recent visit to Hong Kong, I took a side-trip to Macau, a city I last saw nearly 25 years ago. Last time I was here, Stanley Ho still held the monopoly on licensed casinos, with the Lisboa being one of the most noticeable landmarks in the then Portuguese colony.

Arriving by ferry from Hong Kong, berthing at the Outer Harbour attached to the Macau Peninsular, things don’t look that different from last time. Until, that is, you travel further into the downtown area, which now boasts two-dozen casinos. Drive across the bridge that connects to the island of Taipa, and it soon becomes clear not all is quite as it was.

Between Taipa and the island of Coloane is an area of reclaimed land, called Cotai, forming a contiguous mass that incorporates both former islands. Within this district are another 17 casinos, including some of the most lavish gambling and hotel resorts outside of Las Vegas.

As my taxi pulled up to what I thought was the Sheraton Hotel, I stepped out on to a London pavement alongside the facade of the Palace of Westminster (Houses of Parliament), complete with Big Ben clock tower and a Routemaster double-decker bus. Across the street is St. Mark’s Campanile and the Rialto Bridge, and down the road is the Eiffel Tower…Welcome to ersatz Europe, as represented by the Londoner, Venetian and Parisian resorts respectively.

If movies are more your thing, then further along is Studio City, a Hollywood-themed complex, round the corner is City of Dreams, then the MGM Cotai, and finally the Wynn Palace.

Out on its own (in more ways than one) is the Grand Lisboa Palace Resort, complete with Japanese department store, and a hotel designed by the late fashion guru Karl Lagerfeld. This complex has cost US$39bn, and will have to work hard to turn a profit even as visitor numbers to Macau start to recover. “Outlandish” does not even begin to describe what beholds the unsuspecting visitor.

Wandering around inside the resorts and walkways that connect the endless shopping malls of luxury goods, the sense of disorientation is heightened – Venetian canals, bridges and gondolas (on a set that could have come straight from “The Truman Show”); red phone booths, Royal Mail post boxes and London black cabs; replica fountains and horse-drawn carriages; the zebra crossing outside Abbey Road Studios; a fake British pub front.

The latter is a reminder that despite the acres of hospitality these resorts offer, getting an alcoholic beverage was actually very difficult, as there was a distinct shortage of bars; until you realise that it’s probably much easier to get drinks within the gaming rooms….

Away from these pleasure palaces, it was nice to know that some parts of Macau remain the same – in particular Fernando’s restaurant next to the beach at Praia de Hác Sá, on the far end of Coloane. There are still a few other authentic pockets of the strange amalgam of “Asia by the Mediterranean” that epitomises Macau’s past, mostly in the more traditional cafes and restaurants around Senado Square, offering Pasteis de Nata and Macanese breakfasts.

But mostly, Macau seems content to outdo Las Vegas – from the Chinese government’s perspective, if you can’t stop people gambling, better to let them do it locally rather than losing their money overseas.

Next week: Trust in Digital IDs

 

 

 

 

Hong Kong – Then and Now

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I’ve visited Hong Kong twice in the last 6 months, and what a difference half a year can make.

Back in October, the Covid hotel quarantine programme for visitors and returning residents had just ended (which largely prompted my visit). I still had to undergo a PCR test on arrival, plus regular testing for the first 7 days of my stay. In addition, for the first 3 days I was unable to dine-in at cafes, restaurants and bars, or visit public places (museums, cinemas, gyms, etc.), until I had a blue “all clear” QR code on a tracking app. Masks were still mandatory for everyone, indoors and outside, but the QR check-in system was only sporadically enforced.

Of course, this being Hong Kong, the 3-day ban did not prevent me from taking taxis or public transport, going to work, or shopping. So, earn, spend, travel!

Compared to my previous visit in August 2019, there were no signs of any public protests (thanks to ongoing legal and political measures), nor many visitors from mainland China or overseas. The number of expats out and about in Central was well down (although I suspect a lot of people were still working from home), and I don’t recall there being many crowds even during peak shopping and business hours in the CBD.

I visited M+, the amazing new art museum in the West Kowloon Cultural District – which was probably the most popular location I saw during my stay, in part because admission was still free. There was a really interesting and charming exhibition of art and design in Hong Kong since 1945, from the context of cultural, social, commercial, industrial and political developments.

On a past visit, the ground had not yet been broken on the Cultural precinct, and the only art exhibition on show was a series of pop-up installations housed in re-purposed shipping containers (a link to Hong Kong’s important role as an entrepôt?).

Staying near Clearwater Bay also meant being among fewer people, and even gave an opportunity to visit a beach I had never seen before – where local residents had posted signs to encourage visitors not to despoil this small and natural idyll amid Hong Kong’s ever-expanding reclaimed land development.

Talking to some local contacts, there was a suggestion that the key motivation for scrapping the hotel quarantine programme in October was due to the Hong Kong FinTech Week being held the following month along with the much-postponed Hong Kong Rugby Sevens tournament (both expected to attract lots of bankers, brokers, traders and investors…). Yes, in Hong Kong, money still talks.

Fast forward to March, and my latest visit was a stark contrast. Not only were airfares much more expensive than late last year, but the number of visitors (especially from the Mainland) had also boomed. Now that there were no PCR tests or mask mandates, and as domestic tourism has opened up, it seems everyone was desperate to get to Hong Kong. Apparently, in the 30 days since the mask mandate was lifted, 1.5 million people had entered the Special Administrative Region, compared to the few thousand monthly visitors in previous months.

During March alone, Hong Kong hosted the Clockenflap festival, Art Basel Hong Kong, Art Central, a major golf tournament and the WOW Web3 Summit, as well as the Hong Kong Rugby Sevens restored its regular (and rightful) spot on the international sporting calendar.

Out and about in Central on a Friday night at the Tai Kwun art and entertainment precinct almost felt like old times, with people competing for taxis along Hollywood Road. I also got my fill of art – Joan Miró at the HK Museum of Art, Yayoi Kusama at M+, modern Chinese art at the JC Contemporary, and installations and pop-up shows at the K11 and Landmark malls.

From a business perspective, most of my meetings centred on the recent consultation process for Hong Kong’s proposed regulations on Virtual Assets, due to come into effect in June this year. It’s expected to boost the number of licensed crypto exchanges and brokerages operating in Hong Kong, and is a significant leap forward compared to past conversations I have had on the topic, where there was a general reluctance to engage in any meaningful discussions. Now it seems, whether encouraged by Beijing, or seeing the regulatory push back on crypto in the USA, Hong Kong is seeking to become a regional and global hub for all things web3, DeFi, tokenisation and digital currencies. (Not content with the WOW Web3 Summit in March, Hong Kong hosted the Web3 Festival earlier in April.)

Hong Kong is usually very good at reinventing its economic profile following business downturns and market setbacks – especially in the areas of trade, technology, commerce and finance. Perhaps the shift towards embracing virtual assets is simply a pragmatic move. While a large part of GDP is still driven by property and traditional finance, there is a recognition among some that the future is digital…

As much as things change in Hong Kong, they also largely stay the same. Back in October, there was 100% compliance with the mask mandate – but the vast majority of passengers ignored the compulsory seat belt regulation on buses. A breach of the former would have attracted a HK$1,000 fine; the latter, HK$5,000 and 3 months’ imprisonment.

Finally, talking of masks, it’s not that long ago that masked protestors on the streets of Hong Kong were a major legal and political issue. Since then, wearing any sort of mask on a public march or demonstration has been illegal. While I was in Hong Kong last month, the city witnessed its first authorised protest march in several years (about the environmental impact of land reclamation). In a new twist on the right of assembly, march numbers were strictly limited, and all demonstrators had to wear a visible number to identify them. From the TV coverage I watched, the march stewards contained the moving protest behind a rope cordon – so that participants did not literally step out of line.

(On this last trip, I also took a side-trip to Macau – more on that next time.)

Next week: Revisiting Macau – Asia’s Casino Theme Park