How AI Affects Intellectual Property Law

The AI Copyright Reckoning: What Disney's Lawsuit Means for Your Business The entertainment industry just fired its biggest shot yet in the AI copyright wars. The Walt Disney Company and NBCUniversal have teamed up to sue Midjourney, marking the first time major Hollywood studios have taken legal action against a generative AI company. Combined with Getty Images' copyright lawsuit against Stability AI that began at London's High Court this week, we're witnessing a critical moment that will reshape how AI companies operate. The Disney-NBCUniversal lawsuit claims Midjourney pirated their libraries to generate "endless unauthorized copies" of characters like Darth Vader and the Minions. Getty Images accuses Stability AI of misusing over 12 million Getty photos to train its Stable Diffusion system. Both cases represent a clear escalation from individual artist lawsuits to major corporate copyright holders taking direct action. AI companies argue they're operating within existing legal frameworks and that overly broad copyright interpretations could stifle innovation. They contend their systems learn patterns to create new, original works rather than storing exact copies. However, courts are showing increased willingness to let these cases proceed, with one California judge recently indicating he was inclined to green-light a copyright lawsuit against multiple AI companies. These disputes have the potential to reshape copyright licensing in the AI age and create new legal frameworks that could materially impact AI development costs and market access. We're likely to see increased demand for properly licensed training data, creating new revenue streams for content creators but higher barriers for AI companies. For businesses, the message is clear--the Wild West era of AI training data is ending. Companies using AI tools should audit their current usage and understand the training data sources behind their systems. Those developing AI systems must invest in proper data licensing rather than relying solely on scraped internet data. The cost of licensing may be less than the potential liability from copyright infringement claims. Companies that adapt by building proper licensing relationships and respecting intellectual property rights will be best positioned for long-term success, while those that ignore these developments do so at their own peril. What steps is your organization taking to navigate AI copyright challenges?

🚨 Part 2 of the Copyright Office report on AI is out!! 🚨 Spoiler alert: Prompting alone ≠ copyrightable Today, the U.S. Copyright Office released the second of a three-part report around #ArtificialIntelligence. The first part focused on deepfakes, or digital replicas. This second part is focused on the big question surrounding the extent to which, if at all, #GenerativeAI output or works can be eligible for copyright protections. In a statement, Shira Perlmutter notes: “our conclusions turn on the centrality of human creativity to copyright. Where that creativity is expressed through the use of AI systems, it continues to enjoy protection. Extending protection to material whose expressive elements are determined by a machine, however, would undermine rather than further the constitutional goals of copyright.” Here are 5 key takeaways from this latest report: 1️⃣ Human Authorship is Essential – The report reaffirms that copyright protection in the U.S. requires human authorship. Works created entirely by AI, without meaningful human involvement, are not eligible for copyright protection. Courts and the Copyright Office have consistently upheld this principle. 2️⃣ Case-by-Case Analysis of AI-Assisted Works – While purely AI-generated material is not copyrightable, human-authored contributions within AI-assisted works may be protected. Each case must be analyzed individually to determine if the human contribution is sufficient to establish copyrightable authorship. 3️⃣ Prompts Alone Are Insufficient for Copyright – The report finds that inputting prompts into an AI system does not, by itself, establish authorship over the resulting output. Since AI models interpret and generate content in unpredictable ways, a user’s control over the output is often too indirect to qualify as authorship. 4️⃣ AI as an Assistive Tool Does Not Impact Copyrightability – The use of AI as a tool in the creative process does not disqualify a work from copyright protection. If a human makes expressive modifications to AI-generated content—such as selecting, arranging, or significantly altering it—those elements may be eligible for copyright. 5️⃣ No Need for Legislative Change – The Copyright Office concludes that existing copyright law is adequate to address AI-related copyrightability issues. It sees no immediate need for new legislation or sui generis protection for AI-generated works but will continue monitoring legal and technological developments. For those of us following in this space, the above highlights shouldn’t come as much of a surprise, and doesn’t deviate really at all from the guidance and public statements made by the USCO to date. I think a point of continuing confusion on the issue will surround what the USCO notes as “works of authorship that are perceptible in AI-generated outputs.” But no doubt there is more to unpack on this point. #copyright #AI #GenAI #ownership #MachineLearning #USCO

AI just lost a major copyright battle. Thomson Reuters drew a legal line in the sand. And every AI company should be paying attention. Here’s why this ruling changes everything: 1 – A landmark case for AI and copyright  This is the first major U.S. ruling on AI training.  It sets a precedent for using copyrighted content. 2 – Fair use defense was rejected  Ross said it used facts under fair use laws.  The court ruled summaries were protected content. 3 – Editorial work is protected  Westlaw’s legal notes involved real human effort.  Ross copied them directly without adding value. 4 – Scraping data carries legal risk  AI firms often use massive scraped datasets.  This ruling shows that’s not always legal. 5 – AI faces stricter legal scrutiny  The court signaled tighter rules are coming.  Firms must vet their training sources now. 6 – Commercial value was key  Westlaw’s content is part of a paid product.  That hurt Ross’s fair use argument. 7 – More lawsuits are coming  Content-driven industries may push back hard.  News, legal, and research firms are watching. 8 – The future of AI training is unclear  Data access is now a legal gray zone.  Copyright law could reshape model development. Generative AI just got a legal wake-up call. And this is only the beginning. Found this helpful? Follow Arturo Ferreira and repost.

I posted "Second Degree Intellectual Property" to SSRN today. Abstract: This article explores the emerging challenge of "second-degree intellectual property" - copyrightable works and patentable inventions produced by artificial intelligence systems without direct human creativity. The Article argues that while copyright should not protect AI-generated works lacking human proximate cause, the case for AI-generated patents is more nuanced. The article proposes using the concept of "proximate cause" from tort law to determine when human involvement in AI outputs is sufficient for IP protection. For copyrights, this means identifying human creative expression, not just ideas, in prompts given to AI systems. For patents, it requires demonstrating human contribution to conception of the invention. Ultimately, the article contends that granting IP rights to AI outputs without human proximate cause requires empirical evidence of societal benefit, not just commercial value. The Article's analysis provides a framework for courts and policymakers to address the IP implications of increasingly autonomous AI systems. Read the article: https://lnkd.in/dYgFAZeE

The U.S. Copyright Office released a crucial report on Friday on the intersection of AI and copyright, clarifying key principles about AI systems and fair use. The 108-page report provides the Office’s detailed take on how U.S. copyright law, particularly the fair use doctrine, should apply to the use of copyrighted works to train generative AI models. More specifically, if AI training falls within the fair use exception? The conclusions are: ▪️ AI training often implicates copyright. The key legal issue is whether using copyrighted material to train models qualifies as fair use. It depends on (i) What was used, (ii) From where, (iii) For what purpose and (iv) How it affects the market. ▪️ Transformative uses (like research or analysis) may fall under fair use. 𝗕𝘂𝘁 𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹 𝘂𝘀𝗲𝘀 𝘁𝗵𝗮𝘁 𝗰𝗼𝗺𝗽𝗲𝘁𝗲 𝘄𝗶𝘁𝗵 𝘁𝗵𝗲 𝗼𝗿𝗶𝗴𝗶𝗻𝗮𝗹 𝘄𝗼𝗿𝗸𝘀 𝗮𝗻𝗱 𝗶𝗻𝘃𝗼𝗹𝘃𝗲 𝗶𝗹𝗹𝗲𝗴𝗮𝗹 𝗮𝗰𝗰𝗲𝘀𝘀 𝗹𝗶𝗸𝗲𝗹𝘆 𝗳𝗮𝗹𝗹 𝗼𝘂𝘁𝘀𝗶𝗱𝗲 𝗳𝗮𝗶𝗿 𝘂𝘀𝗲 𝗯𝗼𝘂𝗻𝗱𝗮𝗿𝗶𝗲𝘀. ▪️Licensing is the way forward. While the law doesn't need immediate reform, practical licensing solutions (individual, collective, or extended collective) are essential to support innovation without undercutting creators. ▪️ Ultimately, U.S. leadership in AI depends on respecting both innovation and creativity. AI should benefit developers, rights holders, and the public alike. We’re at a crossroads where tech and culture collide. Embracing fair licensing models could be a solution to the numerous issues that we are seeing on rights holders and their works being used in training AI models. We need to set a global standard that values both progress and authorship. #Copyright #AI #IntellectualProperty #Creativity #CopyrightOffice #Innovation -------------------- I’m Kimiya Shams, a lawyer, writer, and public speaker focusing on the intersection of technology, business, and law. My publications can be found on LinkedIn, Forbes, BusinessOfFashion, and across the internet.

The U.S. Copyright Office has provided essential guidance regarding the registration of works containing material generated by Artificial Intelligence (AI). With more artists thinking about using AI as a part of their creative process, this is a critical document for not only for music lawyers but also for music managers who are helping their clients navigate the use of AI in music. Here are the key takeaways from the Copyright Office's policy statement (full paper is attached below for those who are interested): 🎵 Human Authorship Requirement: Works exclusively generated by AI without human involvement do not qualify for copyright protection as "original works of authorship" must be human-created. 🎵 Significant Human Contribution: The use of AI-generated content that is significantly modified, arranged, or selected by a human artist may be eligible for copyright protection, but only for the human-authored parts of the work. 🎵 AI as a Tool: While AI is acknowledged as a valuable tool in the creative process, using AI does not confer authorship. The extent of creative control a human exercises over the work's output is the key factor in determining copyright eligibility. 🎵 Registration of Works with AI-generated Material: Applicants must disclose the use of AI-generated content in their copyright applications, distinguishing between human-created aspects and AI-generated content. 🎵 Correcting Prior Submissions: If a work containing AI-generated content has already been submitted without appropriate disclosure, it should be corrected to ensure the registration remains valid. 🎵 Consequences of Non-disclosure: Applicants who fail to disclose AI-generated content could face the cancellation of their registration or the registration could be disregarded in court during an infringement action. 🎵 Ongoing Monitoring: The Copyright Office continues to monitor developments in AI and copyright law, indicating the possibility of future guidance and adjustments to the policy. #musicindustry #musicbusiness #musicpublishing #copyrightlaw

Big News from the U.S. Copyright Office! As discussed in the linked article from Perkins Coie, The Copyright Office recently released its second report on Copyright and AI, reinforcing a key stance: AI-generated works without human authorship are NOT copyrightable. This aligns with the Office’s previous rulings—if an AI creates something with little to no human input, it’s in the public domain. However, if a human meaningfully contributes to the final work, that portion may be eligible for copyright. Here are some key takeaways: 🔹 AI as a tool vs. AI as an author – Works must have substantial human involvement to be protected. 🔹 The “selection, arrangement, and modification” standard – If a human selects AI-generated elements and significantly edits them, they might have copyright over the modifications but not the AI’s raw output. 🔹 Implications for creators, businesses, and legal teams – Companies using AI in content creation must rethink IP strategies to ensure human authorship is clear and documentable. https://lnkd.in/eVwTCyYU

AI is rewriting the rules of innovation. But who owns the future? The USPTO just unveiled its AI Strategy (January 2025), a blueprint for navigating AI’s role in intellectual property. With patents, trademarks, and copyrights at stake, this is about more than just technology—it’s about who controls the next era of innovation. Here are 5 takeaways: 1️⃣ AI Won’t Own Inventions—Yet AI can assist in innovation, but human inventors remain at the center of patent law. The USPTO is firm: AI can’t be listed as an inventor, but AI-generated work may influence patentability. The legal line is being drawn. 2️⃣ Patent Reviews Are Getting Smarter The USPTO is using AI to examine AI—leveraging machine learning for prior art searches, classification, and decision-making. This means faster approvals, better accuracy, and a more scalable patent process for the future. 3️⃣ IP Protection vs. AI Creativity: The Collision Generative AI is churning out text, images, music, and designs—but who owns it? Trademark and copyright laws weren’t built for AI-generated content. The USPTO is working to define rights and responsibilities in an AI-driven creative economy. 4️⃣ The U.S. is Playing for Global AI Leadership AI innovation is a geopolitical race. The USPTO is working with international partners to shape global AI patent standards, ensuring U.S. leadership in AI regulation, enforcement, and competition. The message? Innovation without protection is just an idea. 5️⃣ AI for All, Not Just Tech Giants The USPTO wants AI-driven innovation to be accessible, not just locked up by billion-dollar companies. From startups to underrepresented inventors, AI tools and patent protections need to be inclusive and equitable—or we risk leaving brilliant minds behind. What’s the bottom line? AI is not just a technology—it’s an economic force. The USPTO is positioning the U.S. to lead the next chapter of AI innovation while ensuring IP laws evolve to keep up. But will regulations accelerate AI’s potential—or slow it down?

The U.S. Copyright Office just released a report called, Identifying the Economic Implications of Artificial Intelligence for Copyright Policy. This report is produced by a group of economic scholars that analyze the intersection of artificial intelligence (AI) and copyright policy under existing frameworks. Topics include: --> Copyrightability of AI-Generated Works and Demand Displacement --> Copyright Infringement by AI Output --> Commercial Exploitation of Name, Image, and Likeness --> The effects of AI Ingestion on Rightsholders' Incentives --> Developers' Access to Training Data --> Controlling the Use of Copyrighted Materials in Training --> Potential Socioeconomic Biases of AI Policy This report is released ahead of the U.S. Copyright Office's final forthcoming report on Copyright and Artificial Intelligence that will address legal implications of training AI models on copyrighted works, licensing considerations, and the allocation of any potential liability.