Daily Journal: Legal Experts Highlight Key IP Trends To Watch
From AI to embedded content, litigation and potential new laws could shape the future of IP
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Legal experts are watching significant copyright cases that could reshape intellectual property law in the coming year - with artificial intelligence (AI) playing a significant but not exclusive role.
AI continues to raise novel IP issues, but open questions over things like the applicability of doctrines such as fair use show signs of reaching a resolution in the year ahead. According to Justin Hughes, a professor at Loyola Law School who teaches patent law and intellectual property, one anticipated trend in AI-related copyright litigation is that the sheer volume of new lawsuits from content creators and publishers against AI platforms is likely to slow.
“In copyright, litigation over AI training sets has been fast and furious for the past three years. I assume we will see a slowdown in the number of new cases filed,” Hughes stated in an email.
“More importantly, my guess is that we are going to see more of these disputes settle. With the growing number of business deals between major content owners and AI companies, it is getting harder for the AI companies to argue that it is fair use under 17 U.S.C. 107 to train on the content of everyone else with whom they don’t do deals. The recent district court decision in Thomson Reuters v. Ross Intelligence - written by a Third Circuit judge sitting by designation - also doesn’t help the AI companies. So, I expect to see more settlements.”
The precise impact of the Thomson Reuters case - in which a federal judge in Delaware ruled that an AI legal research company infringed on Thomson Reuters’ intellectual property by improperly accessing and copying content from the Westlaw legal research platform - isn’t clear. The court ruled against the defendant’s attempt to invoke the fair use defense but limited its decision to non-generative AI.
“I will be surprised if that decision becomes a hugely significant decision just because it is so fact specific,” said Steven Stein, a partner with Greenberg Glusker Fields Claman & Machtinger LLP who focuses on media, intellectual property, entertainment and business disputes.
Stein thinks the New York Times et al. v. OpenAI case, ongoing in the Southern District of New York, will be a far more significant test of whether fair use is an adequate defense against allegations AI companies improperly scrape data. The newspaper and other media organizations accuse OpenAI of improperly accessing their data to train its AI models.
“The New York Times case could definitely have broader implications for OpenAI and for AI generally,” Stein said. “And I think if there is an adverse ruling against OpenAI, I think it’s going to lead to and require AI companies to license content from companies like the New York Times to use in connection with their AI, even if it just involves training that AI.”
The case, depending on the outcome, could “also lead to legislation being passed or considered to try to address the ramifications of that decision, because it obviously has what would have a huge impact on this emerging industry,” Stein said. Although there was no significant federal AI legislation in the pipeline, Stein said lawmakers would likely also be looking at a pending U.S. Copyright Office report on the same issue being litigated by The New York Times. The office has been conducting a three-part evaluation of AI and copyright issues, with two reports already released and a third expected later this year examining the legal implications of training AI models on copyrighted works.
International Termination Rights
Outside of AI, Stein said that a potential broadening of copyright terminations to overseas jurisdictions was an issue firmly on his radar for the year ahead.
Termination provisions allow creators to reclaim ownership rights to their work during a five-year window that opens on the 35th year after the original licensing agreement took effect. Stein explained that this legal mechanism often protects authors who license content before its market value is established.
“Part of the issue has been that a lot of people think copyright termination is limited to the United States,” Stein explained. “So, for example, if you have a copyright in the United States and you license it, and then you terminate the copyright, the idea has been or most people often the termination only applies within the United States.” This can create issues when it comes time for authors to try to “renegotiate and get a better deal,” as they lack the international rights to the work, Stein said.
However, a recent ruling in Vetter v. Resnick, in the Middle District of Louisiana, significantly expanded copyright termination rights, establishing that the termination of rights for The Swingin’ Medallions’ 1966 song “Double Shot (Of My Baby’s Love)” applies both domestically and internationally.
“Many commentators believe that the court got it wrong, but that decision is being appealed to the 5th Circuit Court of Appeals, and it’s very interesting to see what the 5th Circuit, and ultimately, maybe even the United States Supreme Court, does with that, because there’s a lot of wheeling and dealing in Hollywood relating to IP and copyright termination notices, and if, in fact, the termination notice applies to broad, to rights internationally that would have a major impact in the entertainment industry,” Stein said.
A Potential Embedded Content Circuit Split
Copyright infringement as it pertains to the use of embedded videos on websites, and the potential for the issue to land before the U.S. Supreme Court, is another development catching Stein’s attention.
He explained that a recent New York federal court decision in Richardson v. Townsquare Media diverged from previous New York rulings by finding that embedding YouTube videos does not constitute copyright infringement.
The court applied fair use principles for one video and determined YouTube’s terms of service granted an implicit license for the second. This ruling differed from the findings of other New York federal courts that have held embedding does infringe, contrasting with the 9th Circuit’s position that it does not. The Richardson decision potentially sets the stage for an eventual Supreme Court review of this contentious copyright issue, Stein said, if the 2nd Circuit took up the issue and ruled differently to the 9th circuit. Stein said that “it’s certainly not imminent, but it’s possible” that the issue could “rise to the level of the Supreme Court in the not-too-distant future.”
Music Copyright Claims on the Rise
Stein said that music publishing companies are increasingly pursuing copyright infringement claims against organizations that use unlicensed music in social media content, with Sony recently filing a lawsuit against USC for music used in university-related social media posts. “Out of all these music infringement cases that have been filed, there haven’t really been rulings in them that address or speak to the issues implicated by these claims. Most of these cases are settled. So, if any of these cases are ever litigated, and there are many pending, including the one that was filed last week , it’d be very interesting to see what the judges do with them.”
Open Questions on Vicarious Liability
Hughes said that he would be keeping an eye on whether the U.S. Supreme Court would take up the question of whether the 4th Circuit correctly upheld a jury verdict that Cox Communications willfully contributed to copyright infringement because it knew of its users’ infringing activity and materially contributed to it.
“If the Supreme Court grants cert. in Cox Communications v. Sony Music Entertainment, we could get some reshaping of the contours of indirect liability in copyright law. Some folks think the Fourth Circuit erred in its contributory liability analysis, while others - myself included - think the appellate court created confusion, if not an outright circuit split, on vicarious liability,” he wrote. He also anticipated that the United States Patent and Trademark Office (USPTO) would continue to crack down on the “monopolize” slogans and words.
“It’s not a ‘court’ per se, but my guess is that the Trademark Trial and Appeal Board at USPTO will quietly continue to strengthen its ‘failure to function’ decisions as a way to deny trademark registration to slogans and single words that are being claimed as trademarks, but really are just efforts to monopolize control of words on t-shirts and other apparel - more power to them in this effort,” he wrote.
The Los Angeles/San Francisco Daily Journal is a publication for lawyers practicing in California, featuring updates on the courts, regulatory changes, the State Bar and the legal community at large.
