Embracing the AI Revolution: Navigating Intellectual Property Challenges and Opportunities

Dechert LLP

Dechert LLP

1. Introduction

Artificial Intelligence (AI) has become one of the most transformative technologies of the 21st Century. It is revolutionizing the way we create and protect intellectual property (IP), presenting both challenges and opportunities for IP professionals and content creators alike. As AI-generated creative works and AI-assisted inventions become increasingly prevalent, it is crucial for all stakeholders to understand the implications for the protection, enforcement, and monetization of IP rights and adapt accordingly.

2. The Rise of AI-Generated Creative Works

One of the most significant recent developments is the emergence of generative AI algorithms (including large language models (“LLMs”), such as Chat GPT and Google Bard) which are capable of creating content, including audio, code, images, text, music, simulations, and videos. Such AI-generated creative works are pushing the boundaries of traditional IP concepts and raise important questions as to IP ownership and protection.

For copyright law, the use of generative AI will have a profound impact on the creation and distribution of copyrighted works (which protect original works of authorship), including written content and artwork. Current laws grant copyright to human creators, including where the works are created by using a computer, since the computer is considered a tool which aids the creative process, but AI-generated works challenge the status quo and there is keen debate over who owns the copyright in such AI-generated works. Should it belong to the person providing the input to the AI, the AI developer or even the AI owner itself? A further intertwined consideration relates to the originality of AI-generated works. Since the work is generated in large part by the AI without any human input, it is arguable that machine-generated works lack the human creativity required for copyright protection. However, the somewhat radical corollary of this position is that that the output should not be protectable by copyright and that it should be free for use by anyone. The more prosaic alternative position is that that AI-generated works can be original if they result from human input and guidance. Nevertheless, given the proliferation of such works and their commercial significance, the legislature and the Courts will invariably provide answers to these questions in quick time.

AI is also having a significant impact on patent law. As a starting point, AI is making it easier to develop new inventions and AI will be capable of drafting new patent inventions taking into account large swathes of the prior art in the process. The idea of coming up with an idea, dictating that idea into a personal device and using AI to draft and file a patent application might once have been the realm of sci-fi novels, but is now becoming a reality. That notwithstanding, on the flip side, there are concerns that AI will lead to a flood of new patents, which could make it difficult for businesses to innovate as it may become more challenging for businesses to navigate the patent landscape and identify potential conflicts or infringement risks (although of course businesses might also use AI to help them circumvent this issue!). Also, and in a similar way to copyright law, the ever increasing involvement of AI in the invention process raises questions about who should be considered the inventor for the purposes of patent law. This is particularly relevant in cases where the AI system has been trained on existing IP, as it may be difficult to determine whether an invention is truly novel and non-obvious.

Some of these questions have recently been considered, based on the existing IP law framework. In the US, Stephen Thaler applied for patent protection for ostensibly novel inventions (a drinks holder device and an emergency light beacon) generated by an AI system which Thaler had developed. Thaler listed the AI system as the inventor of the patent, The USPTO refused to grant a patent on the basis that patents can only be issued to human inventors (the USPTO’s decision was upheld by the Virginia Eastern District Court and recently the US Supreme Court declined to hear Thaler’s appeal). Thaler has also sought patent protection on the same basis elsewhere internationally and has had his application rejected in Australia, Germany, Israel, the UK and by the EPO although interestingly Thaler was granted permission to appeal to the UK Supreme Court and the decision of the UK Supreme Court is eagerly awaited). Thaler was granted patent protection in South Africa, but the South African IPO uses a depository system and a patent application is only thoroughly examined for validity if it is subsequently challenged by a third party.

Moreover, the way in which different jurisdictions approach the ownership of inventions may have wider economic, and even geopolitical impact. Those countries whose laws provide more favourable protection for AI generated inventions may incentivise investment from innovative industries. It is possible that there will be geographical and political competition as territories strive to position themselves as the best place in the world to build, test and use AI. Given that one of the key foundational aims of IP law is to promote innovation, one might also argue persuasively that sufficient encouragement should be afforded to the use of and investment in AI that will create inventions that advance and benefit society.

3. IP infringement by AI

Another pertinent question is the enforcement of existing IP rights against infringing works generated by AI. By way of illustration, if AI is designed to mimic the voice or personality of a celebrity or public figure, there is the risk of infringing that person's right of publicity or personality rights, in those those jurisdictions where such rights exist.

As another example, take AI algorithms which are used by companies to scrape copyrighted content from the internet and repurpose it for their own means. In both the UK and the US, Getty Images, a provider of photographs and visual content, has filed IP infringement claims against Stability AI, a company which specialises in AI driven image recognition and analysis. The crux of the dispute revolves around Stability AI's alleged unauthorized use of thousands of copyrighted images from Getty's vast collection to train its AI algorithms. Getty Images claims that Stability AI scraped and downloaded a significant number of copyrighted images from its website without obtaining the necessary licenses or permissions and that Stability AI then used these images to train and improve its AI-powered image recognition software. That case continues to make its way through the Courts and, like all judgments at this nascent stage of the conflux of law and AI, is highly anticipated (provided it doesn’t settle beforehand!).

However, as the Courts continue to grapple with the legal issues surrounding AI and IP, the Getty case serves as a reminder of the need for clear guidelines and legal frameworks that address the unique challenges posed by AI-driven innovation. That legal and regulatory framework will inevitably arrive quickly given the growth of the industry and such a framework will hopefully strike the correct balance between protecting existing IP rights and fostering an environment that encourages the development and advancement of AI technologies.

4. How to use AI to help protect and enforce IP rights

Despite the challenges, AI also presents a number of opportunities for IP rights holders. AI will play a significant role in the IP enforcement process by automating the detection of potential infringements and streamlining the enforcement process. AI-powered tools can analyse online marketplaces, social media platforms, and other digital channels to identify potential IP infringements, enabling businesses to take swift action to protect their IP rights. Similarly, AI will be able to evaluate patents to identify potential infringements, as well as novelty or obviousness issues in the patent prosecution process. That said, AI may be used to make it more difficult to enforce IP rights by helping infringers hide their activities, for example by creating fake websites and social media profiles that make it hard to identify the identity of the infringer.

In addition to its role in IP enforcement, AI has a role to play in IP management and strategy, not least through analyzing analyse vast amounts of data to identify trends, assess the competitive landscape, and make informed decisions about IP portfolios. Used in this way, will be able to assess the strength and value of existing patents, identify potential licensing opportunities, and prioritize R&D investments. By leveraging AI in IP management and strategy, businesses have the ability to optimize their IP assets and better position themselves for success in the rapidly evolving innovation landscape.

5. How to respond to these questions and challenges

As AI continues to transform the world of IP, it is essential for all stakeholders, including legislators, courts, regulators, and IP professionals, to collaborate and adapt to the changing landscape. This may involve updating existing IP laws to address the unique challenges posed by AI-generated works and inventions, developing new legal frameworks to accommodate AI-driven innovation, and establishing an environment that encourages the responsible use of AI in IP management and enforcement. By working together to navigate the challenges and opportunities presented by AI, stakeholders can ensure that IP rights remain strong and resilient, and that businesses and content creators can continue to protect and monetize their IP assets in the face of rapid technological change.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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