Opinion Piece: Temperance and Wisdom As We Create IP In Business  

Ongoing list of AI Copyright cases here-updated Nov. 8 2023

We’re standing in the midst of a precipice of pioneering a new technological advancement so “thorough”, it may be better described as a societal advancement. The world of WALL-E may not be far off. The most similar parallel path we’ve seen as a society may be, I would posit, the Dot Com boom of the 2000’s. 

Times like these require a temperance; a balance of pioneering mindset tempered with prudence and logic. 

Pioneering, in that as business owners, we should lean into every advancement; as entrepreneurs and founders, I daresay it’s our job to remain visionary, continuing to not just push past boundaries, but redefine them. Without entrepreneurs questioning the way things “had always been done”, we wouldn’t have companies such as Uber, AirBnb, etc (all the byproduct of truly gritty visionaries, re-writing boundaries during recessions).  

In tandem; wisdom. No business created by visionary entrepreneurs survives without the ability to learn, readjust, recalibrate, and ride the waves of innovation without the north star of logic guiding the business to a point of wisdom. 

With that, there is no definitive, black and white case law regarding AI-produced content, the definition of ownership, and the ability to register the intellectual property for works partially created by AI. To be clear, guidelines have been released, but continue to be re-adjusted as new case law comes out. For the time being, until federal regulation(s) are put in place, I want to share with you the considerations I am putting in place within my own businesses to remain legal, ethical, and provide the best care possible for my clients, while growing multiple businesses. 

The More You Rely On AI, The More You Lessen Your OWN Ability To Own That Work 

Speaking broadly (and as detailed thoroughly here), you don’t own a trademark until you register it. You can’t take legal action against infringers unless you have registered your copyright before the copying occurs. 

Trademarks protect brand identifiers- business names, logos, and slogans. Speaking again, very generally, trademarks are strongly influenced by  the laws of “likelihood of confusion”. Stripping the legalese, if a competitor trademarks a mark that is phonetically or visually similar to your own before you register, you can be forced to cease and desist from using that trademark. Your literal reputation is on the line until you secure ownership. 

Copyrights protect tangible works of authorship, or “creative expressions in a final fixed form”. Think apps, online courses, etc.  In order to enjoin (stop) an infringer from copying your work, you must register your copyright prior to the infringement occurring. 

In both cases, without registration, you will have to hire an attorney and commence a lawsuit in federal court to protect your common law rights. Generalizing those types of cases, anticipate a lengthy (months, if not a year), and expensive (usually close to, if not a healthy) 6 figures in legal fees. 

In both cases, you cannot obtain registration on a federal level unless you own every element of the work you are registering. 

This is why attorneys have to verify that you own every element of the work you are attempting to register. The question that every legal professional (including the Copyright Office, federal and appellate courts) are grappling with: when AI is used to create the work, what do you own? Do you even own it?

When building your business, do not become so fixated on the quick fixes of AI that you fail to see the forest from the trees. If you build out the entirety of your work product on AI (such as ChatGPT), you will hamstring your ability to secure intellectual property ownership of your work. This means:

• You’ll be a sitting duck for infringement 
• You won’t truly own your own intellectual property (at best, you’ll have to spend significant legal fees to determine if you do, or not)
• You’ll literally devalue your company 
• You’ll be subject to increased federal regulation*

And remember- the ownership of your intellectual property directly affects the monetary value of your company. Not only should every company be built to be sellable, or transferable; put more bluntly: eventually you will exit your business. The point of needing to provide proof of value of your company is inevitable for every business owner. I would argue that a business who’s work product is built on AI actually devalues the company. You’re literally taking from your own bottom line in order to find a “more efficient” way to building the business. 

*see below 

In summary, the more you rely on AI to create your work product, the more you decrease your own ability to actually own your own work. 

(Registered) Intellectual property will become more rare, and therefore valuable.

If only “authors” can be “owners” of registered IP (in the United States), and only humans can be authors….how much can a person rely on AI to create a copyrightable work, and still be considered the owner? Enough to obtain a federal registration?

This is the question that needs to be answered, yet remains unanswered. However, as more and more business lean on the “quick fix” of AI, they unwittingly, possibly, give up their own rights to own their work, and protect their work against infringement. Therefore, it stands to reason that as intellectual property that can be registered becomes more rare, the more valuable registered intellectual property can become. For those business owners who maintain their ability to register their work, you’re in a prime position to charge a premium in licensing fees, or in increasing the value of your company. You’ve just created an asset that’s even more rare.

How much regulation do we want to invite into our businesses?

We’re in the “wild west” phase of AI regulation. With that said, as of October 30, 2023, both Europe and the United States have made it clear the regulation is coming. The European Union has released its first iteration of the AI Act . President Biden has released the first Executive Order laying the framework for government regulation of AI-generated content. Within these parameters, the United States has set forth the parameters for identifying and disclosing what content is generated by AI. Specifically, those agencies must disclose the use of AI-generated content with watermarks. Currently, this Executive Order only pertains to governmental agencies. However, this limitation is only in place because of the constitutional requirements governing Executive Orders. If Congress follows this Executive Order with legislation, it is quite logical to surmise that the parameters set forth in the order can (and will) extend to the private sector.

Consider this the canary in the coalmine when it comes to federal regulation for AI-generated content.  

Because of the confusion in the courts and the intellectual property legal arena as a whole, some sort of standardized regulation is perhaps warranted. However, I would posit that in a decade (or less), we’ll be discussing federal oversight/regulation of AI-generated content in a similar context to the way in which we discuss the FTC as it pertains to privacy policies, or the IRS in relation to taxes. 

The Executive Order posits many debates already percolating in the legal world, a mere 48 hours after it was released. What constitutes a “watermark”? If the purpose of a watermark is to protect against “deep fakes”, how can we know if a watermark is itself a deep fake? If those questions exist, how can we be assured that won’t be falsely accused of manufacturing a watermark? If we are mistakenly accused of mismanaging a watermark, is that content (or ownership of the IP) on pause? Would it be similar to ending up in “Instagram jail” by accident with the algorithm inadvertently flags our accounts? Precisely how can we register the intellectual property of work with a watermark (must it reflect the watermark at all times)?

Clearly, a myriad of  questions remain, and this will likely become lawyers’ playgrounds. But more than that, the question I am asking for my own business: How much regulation do we want to invite into our businesses?

My answer: not much. I’d rather push through my own creative barriers and continue to pioneer as a visionary, unhindered by those shackles. For work that I want to register (copyright or trademark) later, I will be relying upon my own creativity. 

The Solution

Despite what it may sound like, I’m actively progressing my own knowledge of, and proficiency in AI applicable for my own businesses every single day.

From an ethical standpoint, I will always have (and will always be driven by) my ethical obligation to provide the most competent level of legal proficiency for my clients. Part of this will be greatly enhanced by AI- time saved in hourly billing! Accurate summaries and transcripts that further bridge the gap between “legalese” and my clients’ understanding! In every way that I can provide a greater level of care and proficiency for my clients, I will jump at the chance. 

In every way that I create work product that falls within the parameters of intellectual property, I am taking the extra step to ensure that the work product is mine; derived from me, created and produced by me, and owned by me. There is a definitive line between the two; they are not synonymous. 

And this sits well with my integrity.