The indomitable juggernaut of artificial intelligence (“AI”) continues to make a stir in matters of intellectual property and privacy. Of particular note is a recent announcement by Zoom that the company had changed its terms of service and would now be asking users to allow Zoom to access user data, face and facial movements, even private conversations, to train its AI models.
While Zoom has since clarified that it will not “use audio, video, or chat content for training (its AI models) without customer consent,” questions still remain about how Zoom users could be impacted.
Though Zoom and other remote meeting platforms, such as Microsoft Teams, have been around for years, their popularity surged when the COVID pandemic forced numerous individuals and companies to conduct business remotely. Using Zoom or similar platforms is now an ingrained part of the work routine for many—which means saying “no” to Zoom (and others) might not be as easy to do as it first seems.
“Zoom can apparently use customer video calls and chat transcripts to train AI, so long as users consent,” explains Eric Ludwig, whose California-based law firm, Ludwig APC, focuses on intellectual property, data privacy, and business litigation around the globe. “While having the option to consent or not sounds reasonable to most, what happens when your meeting host agrees to share data with Zoom but you don’t want to? Any participants who don’t agree to share their data will need to drop off the call. How realistic is leaving the call for you if you’re required to attend the meeting to do your job? This could put people in a tough position. Many may have legitimate privacy concerns and reasons for not wanting to share their data. Some may just want to remain private for privacy’s sake. That’s still their right.”
The Right to Privacy
A citizen’s “Right to Privacy” was officially recognized by the Supreme Court in Griswold v. Connecticut. In that case, citing the personal protections of the 1st, 3rd, 4th, 5th, and 9th Amendments, the Supreme Court concluded that the U.S. Constitution created a “zone of privacy” inalienable to all citizens.
As a result, most U.S. citizens rightly assume a reasonable expectation of privacy as they go about their business. Those assumptions might be proven wrong, though, especially as technology advances and the use of artificial intelligence tools become more and more widespread.
Old System in A New Age
Some are expressing concern over eroding privacy and the potential for societal harm in the face of new technologies and AI. Recently, OpenAI CEO Sam Altman expressed concerns regarding AI and the possibility it could compromise elections, while several media organizations co-authored an open letter “calling for more transparency and copyright protection in AI.”
“These and similar calls-to-action are timely and important,” says Ludwig. “How legislators and courts respond in the coming months and years to keep up with new AI innovations and the causal business changes associated with them will be telling.”
Read those Terms of Service
Many jokes have been made about reading user agreements and terms of service. What exactly are users agreeing to … and does it really matter? After all, if you don’t like a particular term in a user agreement, what can you reasonably do? Is declining “terms of service” realistic? Are you really going to forgo using Microsoft Office or Zoom if you don’t like something in the user agreement?
“To the extent privacy matters to individuals, reading those terms of service is important—especially any updates for services you already use,” says Ludwig. “There’s a good chance that many of the more recent updates pertain to AI, whether it’s something you use in your own business or whether it’s others wanting permission to use your data to train their AI models.”
Let’s Work Together: Global Experience, Personal Focus
If you have questions about how AI tools could affect your privacy, the services you use, the privacy of your employees, and potential risks to you and your business, give Ludwig APC a call. We are experts in privacy matters, IP, and business best practices.
Contact us today to arrange a free consultation at (619) 929-0873 or consultation@ludwigiplaw.com.
As we wake to the dawn of a new age filled with artificial intelligence (“AI”) tools, each day seems to pose new questions and concerns. How daring or cautious should we be when using this game-changing technology?
Whether we know it or not, and without explanation, context, or accuracy, most of us encounter some form of “AI” almost daily via platforms such as YouTube, Twitch, or TikTok. That’s where a new phenomenon is emerging within the streaming and video space. It’s called the “AI Parody” and it’s gaining in popularity.
What Is An AI Parody?
AI Parodies are typically derived from existing intellectual property (“IP”) such as TV shows or movies. It’s this IP that is fed into specific AI tools to create new forms of digital media (the aforementioned AI Parody).
This digital product is then presented on video platforms as parody, citing the fair use exception—and these parodies can be created at rates and volumes far outstripping the capabilities of studios or individuals responsible for the original IP content.
Examples of popular AI Parodies include those derived from shows like Family Guy, Seinfeld, and Spongebob Squarepants, all of which can be found on popular streaming platforms. Those creating the parodies will, if they have not already, eventually earn an income from them through advertising, subscriptions, and increased followings.
Another example of an AI Parody is a 24/7 AI Debate between former President Donald Trump and President Joe Biden. This parody features both men gesturing and speaking with highly accurate AI-generated voices. For a donation, audiences can pose questions and both the AI-created Trump and Biden figures will respond to them real-time. The verbal sparring is really quite a convincing, albeit not flattering, representation of the two men.
What Does the Road Ahead Look Like?
Several of the AI Parody examples mentioned in this blog have “hopped” from platform to platform as the result of infringement claims filed by the IP owners of the original characters or likenesses. While no legal precedent has been set in a courtroom, each platform simply suspended the offending account for failure to comply with their Terms of Service related to copyright infringement.
In the defense of entrepreneurship, I can understand the funny and entertaining prospects of AI Parody ventures. Once created, these parodies can generate significant passive income with little to no intervention from those who created them. Of course, the characters and likenesses inherent to the popularity of these creations are the IP of others. Therein lies the rub.
As AI tools advance, the barrier for creating ever more sophisticated AI parodies becomes ever lower. The way I see it, as long as the social marketplace welcomes these parodies and enough platforms allow them to be streamed, they will continue to be profitable and popular.
How Can IP Creators/Owners Be Proactive?
While we are still in the early stages of determining the legal implications of AI and IP, for IP owners and creators, keeping as up to date as possible about AI advancements is critical. Ignoring the AI revolution will not protect anyone’s IP interests, nor will it make AI go away.
Like it or not, AI may already be seeping into our day-to-day lives whether we know it or not. AI tools are easy to use and easy to access. They’re typically free and cloud-based, so they can be accessed by pretty much anyone.
That said, if you’re about to adventure into the new “AI Dawn” or if you’re fearful of how AI has impacted (or may impact) your existing IP interests, give Ludwig APC a call or contact us by email. As experts in privacy matters, IP, and business litigation, AI is a topic of great interest to us.
Let’s Work Together: Global Experience, Personal Focus
Ludwig APC regularly monitors technology’s impact on IP and business best practices. Contact us today to arrange a free consultation: (619) 929-0873 | consultation@ludwigiplaw.com.
In a public declaration to the world, the Japanese government recently reaffirmed that—at least in Japan—data used to train artificial intelligence (“AI”) tools does not infringe upon the rights of copyright holders. In response, Amana Images formed the Japan Image Generative AI Consortium in June. This panel of 20 experts was tasked with recommending why Japan should change its policy.
In short, the Japanese government’s policy states that AI can use any data “regardless of whether it is for non-profit or commercial purposes, whether it is an act other than reproduction, or whether it is content obtained from illegal sites or otherwise.”
Given the seemingly wide-open nature of this policy, there seems to be a real possibility that failure to establish some level of AI-related infringement protection could result in a burgeoning “Silicon Valley” style AI industry setting up shop in the land of the rising sun.
What Constitutes AI Art?
In the world of AI, specifically AI Art, every discussion stems from two foundational pillars: “Software” and “Datasets.”
In the “Software” pillar, we find the parameters, features, and core code of the AI before it ever runs its first job. It’s at this stage that the AI tool typically has the learning of its predecessors integrated already. This pillar evolves over time as handlers relax or constrict the conditions and prompts to get better and more convenient results, and as the AI improves itself through deep learning.
The “Dataset” pillar consists of text, audio, video, and other digital assets assembled in a format that the software can digest to reproduce AI-created art of some kind. Based upon how this dataset is introduced, the AI will learn what grass, trees, or people look like, what specific art styles are, what fonts and representations of text are commonplace or preferable, what a dog’s bark sounds like versus a cat’s meow, etc.
Where and how this dataset is obtained by AI and by what rights it is used have up until now been a sticking point in legal debates and infringement claims involving AI and IP. Thus, the Dataset pillar is truly the gas that fuels the fire.
Who Owns the Data?
The Japanese government argues that since AI will never create an identical reproduction of another’s specific IP, then any dataset the AI is trained on does not need to get the permission from the owners of the IP to use it. If you’re the owner or creator of IP, you might rightly view that notion as very dangerous—or at least concerning.
For example, what happens if a business takes the successful IP of a competitor and asks an AI tool to come up with a similar approach? In theory, any logo, character, theme, brand identity, or trademark could be mimicked without repercussion. Similarly, the likenesses of celebrities—or even us less-famous types—could be scraped off the web and used within an AI dataset.
Should You Be Moving to Tokyo?
As the “AI Wild West” forms, conceding oversight and enforcement of copyright infringement matters would not seem preferable to anyone, not even Japan. The Japanese government does not operate in a vacuum. They are not the sole purveyors of IP law worldwide. The interests of other nations apply, as do numerous global laws that already protect IP.
Rest assured that Ludwig APC continues to monitor how AI’s impact on IP creation and ownership is tested here in the United States and across the globe. It’s our goal to stay at the forefront on how AI is impacting IP and business best practices so we can diligently advise clients on copyright matters, IP, and business litigation.
Let’s Work Together: Global Experience, Personal Focus
If you have questions about how AI tools and products could affect your business, or whether you should use them at all, contact us today to arrange a free consultation: (619) 929-0873 | consultation@ludwigiplaw.com.
When it comes to intellectual property litigation, successfully asserting or defending against a claim of IP infringement is only one part of the battle. It’s a big part, no doubt, but calculating the damages resulting from said infringement is equally as vital. After all, if someone capitalizes on your brand’s reputation or other IP asset, what’s the actual value of that infringement to you or to them?
Luckily, there are tools, techniques, and experts who can help IP owners navigate the complexities of not only IP ownership but affixing values to those often-intangible assets. One such expert is Brian Buss of CBIZ Forensic Consulting Group LLC. A long-time colleague of Eric Ludwig, founder and principal of business and technology litigation law firm Ludwig APC, Brian recently presented a 60-minute webinar on the topic of assessing damages resulting from IP infringement.
“In awarding damages to plaintiffs in IP infringement cases, there are a great many vagaries involved,” explains Ludwig, whose firm helps clients protect intellectual property assets, assert IP rights, and defend against infringement claims around the world. “IP valuation experts need to be able to define the asset involved, determine when the alleged infringement took place, and then calculate the actual value of damages to the plaintiff—and they need to be able to do so in a way that’s understandable to jury members, who often are not experts in IP law.”
Reasonable, Testable, Equitable
According to Buss, winning an infringement case is not supposed to be like winning the lottery. “Federal statutes require damages awarded for IP infringement to be fair and reasonable,” he says. “Developing and communicating what’s ‘fair and reasonable’ requires both accurate calculations and the ability to communicate clearly with the jury.”
That’s why IP owners, whether asserting or defending against claims of infringement are best served when working with experts who have experience and success making the case for damages and then communicating the fine points of the case in understandable and relatable ways.
The basic concepts behind IP-related analysis for purposes of assessing damages rely on the following:
- Is the remedy equitable and focused on repairing the harm? Damages should be based on actual lost profits or lost royalties, not be punitive in nature.
- Has the damages amount been calculated using reasonable and tested methodologies accepted by the courts and the IP business community?
- Is calculating the award amount replicable? In other words, would another analyst arrive at the same or similar result?
Challenges of Calculating Damages
One of the main challenges of calculating damages is reflected by the very nature of IP assets. “Valuing IP assets is not like assessing the value of real estate by comparing the sales prices of comparable homes in a given area,” says Buss. “With each business and its assets being unique, performance benchmarks involving comparable assets may be hard to find or not relevant.”
Equally challenging may be defining the asset and infringement event itself. In other words, what specific asset was infringed, what was the nature of the infringement, and when did it occur? For example, asserting infringement of one’s “brand” may not be sufficient or specific enough because a brand could include a bundle of assets. Likewise, accusing a party of stealing a “trade secret” can apply to many things.
Additionally, standard accounting and financial reporting by most companies does not disaggregate profits and losses by their related IP assets or activities. Analysts need to use research and analysis to develop quantitative and qualitative observations that measure the specific financial impact of an asset infringement or event.
“The more complex the offering, the more challenging the valuation of damages and lost profits can be,” Buss explains. “Sometimes, even if there was an infringement, that doesn’t necessarily mean there’s been an impact on profits or brand performance. That’s why it’s important to bring in the experts.”
Methods for Calculating Damages
When calculating IP-infringement-related damages, analysts typically look at one or more of three main areas:
- Lost Profits
- Unjust Enrichment
- Reasonable Royalties
When looking at lost profits, the argument is that an IP owner would have performed better if not for the infringement. Analysts will consider projected performance as though there had been no infringement (commonly known as “but-for” performance) and compare that to actual performance before and after the infringing event, which is often labeled “as-is” performance. The difference is what they project to be lost profits resulting from the infringement.
For example, a former CEO posts disparaging and defamatory comments on Twitter and Facebook about his former company. An analyst could calculate lost profits due to declining online sales using historical data as reference points.
Unjust enrichment (aka profit disgorgement) explores how much the accused party gained as a result of the infringement. An example of this might be an online apparel retailer who benefits from increased consumer demand when an online influencer said the retailer’s clothes “look just like Armani.” In this scenario, the retailer may have achieved incremental profits due to copyright and/or trademark infringement. The analyst’s job is to determine the portion of incremental profit achieved from misuse of the subject IP (in this example, the reference to the Armani and possibly the similarity in appearance).
Infringement-related damages can also be awarded for lost royalties if IP owners can demonstrate the IP assets could have been licensed to the alleged infringing party. Calculating damages based on lost royalties requires review of similar license transactions to assess a reasonable royalty rate that is applied to the amount of sales achieved by the alleged infringing party. Determination of the reasonable royalty rate considers multiple factors including the similarity of benchmark agreements, differences between the parties, other forms of license transaction compensation, and the nature of the subject IP assets.
“As we see with essentially all aspects of intellectual property matters, the playing field is varied and complicated,” says Ludwig. “Great ideas deserve protection, and no two IP cases are alike. Any IP owner faced with asserting IP rights or defending against infringement claims needs the expertise of experienced counsel and IP damage valuation experts like Brian Buss on their side.”
Let’s Work Together: Global Experience, Personal Focus
Ludwig APC works with clients to protect intellectual property assets, assert IP rights, and defend against infringement claims. Contact us today to arrange a free consultation: (619) 929-0873 | consultation@ludwigiplaw.com.
