This is the second entry in a series of posts by our team about AI generative tools such as ChatGPT and related legal issues (our first was ChatGPT: The Future May Be Bright, But on What Terms?).  Many people are aware of recent copyright litigation around the use of AI generative tools (AI Products).  That litigation, along with legal terms provided with AI Products, require the re-examination of common intellectual property issues for businesses.  In short, it is often unclear whether you have the rights to use the AI Products for the intended purposes or for the output created by them.  There are also different types of AI Products emerging that are more “bespoke” and that are not trained on or do not use “public” information from the Internet to create output.  This blog focuses on intellectual property issues around using AI Products, and we provide a list of things to consider at the end of this blog.

To begin, here is a refresher on some of the copyright litigation:

Getty Images Inc. v. Stability AI Inc.

Getty Images (US), Inc. sued Stability AI, Inc. for copyright infringement for the Stable Diffusion AI generative tool.  Stable Diffusion uses text prompts to generate computer synthesized images. Stability AI also offers a user interface called DreamStudio that is powered by Stable Diffusion that allows subscribers to generate images on their personal computers. A diffusion model uses hundreds or even thousands image-texts pairs from open-source databases (or in this case copyrighted images from Getty Images, allegedly) to “train” the machine and allow it to produce images based on a prompt. For example, to get an image of a dog, the machine would learn the patterns between text that describes a dog and the pictures themselves. Then, it can reproduce its “own” image of a dog when prompted by the user and create a “unique” image.

Getty Images alleges that Stability AI copied more than 12 million copyrighted images from Getty Images’ collection without permission or compensation and used these images to train the Stable Diffusion tool. Getty Images states that they have routinely licensed images to other similar companies for similar uses related to AI and machine learning. In this case, Getty Images is asking for $150K per infringement of the more than 12 million alleged infringing photographs, totaling about $1.8 trillion in alleged damages.

Andersen et al. vs. Stability AI et al.

Stability AI is also being sued in a class action lawsuit, along with Midjourney, Inc. and DeviantArt alleging that the Stable Diffusion tool is a collage tool that violates artists’ copyrights. Like the Getty Images case, the plaintiffs allege that the model infringes on the copyright of original works because their art works were used without their consent or compensation and used to “train” the tool that now produces competing works. While this case is another example of infringement of visual works, the outcome of this case and the others discussed will impact Chat GPT and other AI Products, and also challenge the intellectual property rights of their “learned” outputs. 

Intellectual Property and ChatGPT Terms of Use

Here's some thoughts about intellectual property based on a review of the most recent Terms of Use for ChatGPT (as of March 14, 2023).  Other AI Products may have their own terms of use, but below is an example of the analysis required with respect to intellectual property.

As of the date of this blog, the ChatGPT Terms of Use state that you can use input and output from the program “. . . for any purpose, including commercial purposes such as sale or publication, if you comply with these Terms.”  Other language, however, makes this statement unclear:

“[y]ou may provide input to the Services (“Input”), and receive output generated and returned by the Services based on the Input (“Output”). Input and Output are collectively Content.  As between the parties and to the extent permitted by applicable law, you own all Input. Subject to your compliance with these Terms, OpenAI hereby assigns to you all its right, title, and interest in and to Output."

OpenAI leaves “open” whether it has rights under law to provide any comfort of use or ownership in Output when the Output is a function of the Input and the program itself.  In fact, the terms go further and state “[Y]ou are responsible for Content, including for ensuring that it does not violate any applicable law or these Terms.”  As discussed above, the Output is exactly what is the subject to copyright infringement litigation.  And, finally, the terms disclaim any warranty of non-infringement or indemnity for infringement.

So, what does this all mean?

Here are some things to consider when using AI Products as it relates to intellectual property rights:

• Determine whether the AI Product for a use case trains on or generates output from the public Internet or similar sources.  The answer to this question can generate further inquiries regarding use of the AI Product itself as well as rights to use any output and potential restrictions.  If applicable and you have access, consider using AI Products that mine and train on proprietary data to help avoid third party intellectual property claims.
• Create or supplement company use policies regarding the use of AI Products and analyze internal use vs. external use.  Like with open source, many companies are putting together special committees or processes to examine incoming use of AI Products and intellectual property rights needed to use the program and any output.
• Make due diligence inquiries of sellers of AI Products as part of the procurement process, including analyzing terms and conditions of AI Products for intellectual property and related terms.  This also includes making inquiries regarding the source material on which the AI Products were trained in the first instance, along with how it will continue to be trained in the future.
• In mergers and acquisitions or investments, add AI Products to due diligence request lists to help determine proper use and ownership rights, along with accompanying representations, warranties, and indemnities.
• Revisit “standard” intellectual property representations and warranties and indemnities and liabilities specific to AI Products in commercial agreements.  Many times, “standard” on-online terms will disclaim everything.  In addition, these agreements are not yet mature from a drafting standpoint and often leave potential gaps, ambiguities, or even conflicting provisions.
• Speaking of on-line terms of use, the terms for AI Products are updated early and often.  As is the case with electronical contracting generally, consider how these terms are updated and whether material terms can be changed, including intellectual property provisions, unless otherwise negotiated!
• While copyright comprises most recent litigation, the race for patents covering AI Products has already begun! Take special care with respect to potential patent infringement in addition to copyright, publicity and other intellectual property rights (and consider the differences between international and domestic laws regarding the same).