2023 has been a watershed year for AI with its entry into the broader public consciousness. AI has been front and center in the legal space as well, as this blog has detailed here and here. Now, the U.S. Copyright Office (USCO) isseeking public comments on the various legal, technical and policy issues raised by AI systems. The USCO is doing this with an eye toward possible changes or clarifications on what is copyrightable in this realm and to fulfill its functions of advising Congress and serving as a public resource on copyright law matters. In this post, we will provide more information about this USCO initiative and some preliminary thoughts on its implications for the copyrightability of AI-generated works in the future.
The USCO’s AI Initiative launched in early 2023, and has included public listening sessions, educational webinars, engagement with stakeholders, and the publication of a registration guidance statement reiterating the “principle that copyright protection in the United States requires human authorship.” As the Notice further highlights, the USCO has been engaged over the years on questions involving machine learning and copyright, and, in fact, has issued decisions recently declining to register an artwork generated by AI and parts of a graphic novel that were created using a generative AI system.
Our colleague and leader of the firm’s China Intellectual Property team Paolo Beconcini will be speaking at the upcoming INDICAM event Let’s Take Stock: The Evolution of Counterfeiting In Asia and The Importance of Intelligence and Intelligent Strategies.
Paolo will discuss how to protect your IP in China, sharing insights on the new trademark law proposal, as well as current counterfeiting trends and strategies for how to combat them. The in-person event will take place in Milan on October 12; details and registration are available here. The event follows a recent podcast on which Paolo spoke for the organization, covering brand protection in China and the status of counterfeiting — worth checking out here.
On August 15, 2023, the Committee published proposed amendments to Rules 16 and 26 of the Federal Rules of Civil Procedure (“Rules”). The amendments are designed to require that parties address and agree on discovery issues regarding privilege and work product protections at the Rule 26(f) Conference. This is a welcome change that should both streamline the discovery process and reduce the cost of discovery obligations.
The process for amending the Rules can take approximately three years from proposal to final rule. The Judicial Conference meets twice a year and operates through a network of committees. The committees review issues within their established bailiwicks and make recommendations to the Judicial Conference. If approved by the Juridical Conference, the amendment then goes to the Supreme Court for consideration. The Supreme Court must, by May 1 of the year the amendment is to take effect, prescribe and transmit the proposed amendment. Congress then enacts, rejects, modifies, or defers the amendment. Absent Congressional action, the amendment becomes law.
The proposed amendments to Rule 16 and 26 are designed to require parties to address privilege and work product protections early in litigation by adopting agreed procedures regarding the timing and sufficiency of privilege logs. In particular, the amended rules require substantive discussions regarding the contents and timing of privilege logs during the Rule 26(f) conference. Amended Rule 16 would vest the district judge or magistrate judge with discretion to include provisions concerning privilege logs as part of a case scheduling order.
Some argue that strict interpretation of the current Rules requires that privilege logs be delivered to the requesting party when it serves responses or produces documents, unless otherwise agreed. In practice, however, privilege logs are typically provided long after productions have occurred, particularly in cases with thornier privilege issues. Sometimes that results in lengthy privilege logs being delivered such that collateral litigation regarding privilege disputes occurs in a rush near to the close of discovery – to the potential prejudice of the requesting party challenging privilege or work product assertions. The proposed amendments would help reduce opportunities for such gamesmanship.
If the proposed amendments work as intended, counsel should spend less time disputing collateral matters like privilege logs, ultimately saving clients money. These changes will be particularly impactful for patent infringement and trademark matters, given the privilege and work product issues that such matters typically involve. For example, in both patent infringement and trademark matters, privilege concerns can arise, respectively, in relation to pre-filing investigations into infringement or trademark search memoranda. Patent infringement cases can have further privilege concerns relating to the production of prosecution files from the patent owner’s outside counsel. Addressing the timing of the disclosure of and contents of privilege logs sooner should allow parties to spend less time fighting over the timing and sufficiency of privilege logs and reduce the number of collateral disputes the district courts need to hear.
Counterfeiting is a global problem that affects a wide variety of entrepreneurs and innovators – from small businesses to global corporations. Action in China can be an important tool for combating these problems. Head of the firm’s China Intellectual Property team, Paolo Beconcini covers the complex challenges of fighting global counterfeiting for INDICAM (Italian Association for the Protection of Intellectual Property), with focus on the “offline” counterfeiting issues in China. Paolo shares his first-hand experience with raids and enforcement in China over the years and how brands can find the right strategy to enforce their brand in China. Check out the full discussion here.
*It is also worth noting that the deadline for stakeholder comments on future strategies in anticounterfeiting and antipiracy is quickly approaching! The USPTO’s notice can be found here. *
As Paolo notes, in the online context, “in taking down listings, you still have the problem that listings will still pop up (you have not only ecommerce platforms and you have also social media now days that is used for counterfeiting) and all this traffic starts in China.”
Therefore, “…if you want to have an impact on counterfeiters, you must consider enforcing your trademarks in China, against the manufacturers and the organizations that supply counterfeits globally.”
Paolo explains the options. In brief, “China has dual enforcement structure. Civil enforcement, you go to court against an infringer of the trademarks. Or you use administrative enforcement.”
We note that the US Patent and Trademark Office is currently seeking comments on effective strategies to combat counterfeiting and piracy (see here). The deadline has been extended to September 25, 2023, and the Office will be sponsoring a roundtable discussion thereafter.
U.S. businesses and investors may be subject to new compliance requirements for outbound investments in certain technology sectors pursuant to U.S. President Joe Biden’s Executive Order (“EO”), titled “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concerns,” and the corresponding the Advance Notice of Proposed Rulemaking (“ANPRM”) issued by the Treasury Department. Our colleagues at our sister blog The Trade Practitioner recently posted on this topic here and we wanted to take a moment and call this to your attention.
Background
The EO and ANPRM establish a “program” to prohibit or require notification concerning certain outbound investments by U.S. persons involving the People’s Republic of China (including Hong Kong and Macau), however other countries may be added in the future.
Whether a U.S. person is subject to a prohibition or notification requirement will be based on the type of activity that the “covered foreign person” conducts with a “covered national security technology or product,” which are defined technologies and products in the following sectors:
semiconductors and microelectronics
quantum information technologies
artificial intelligence
The EO indicated that China’s “rapid advancement” in these three sectors “significantly enhances [China’s] ability to conduct activities that threaten the national security of the United States . . . such as the development of more sophisticated weapons systems, breaking cryptographic codes, and other applications that could provide [China] with military advantages.”
The ANPRM program proposes to regulate the following types of activities: acquisitions of equity or contingent interests, greenfield investments, joint ventures, certain debt financing transactions by U.S. persons, and potentially “indirect” transactions to the prohibition or notification requirement (“potentially” because the ANPRM stated Treasury was “considering” including this activity as well). U.S. businesses and their controlled subsidiaries operating in semiconductors and microelectronics, quantum information technologies, or artificial intelligence sectors are wise to take steps to manage compliance with the forthcoming requirements.
On June 1, 2021, the Fourth Amendment to the Chinese Patent Law became effective. An important part of the amendment is the introduction by Article 76 of the patent linkage system in China – a system for litigation of drug patents prior to market entry of generics, similar to that provided by the Hatch Waxman Act in the US. On July 4, 2021, the National Medical Products Administration (NMPA) of China and the China National Intellectual Property Administration (CNIPA) jointly issued the Measures for the Implementation of Early Resolution Mechanisms for Drug Patent Disputes (“Measures”), which provide more details on how litigations are handled under the patent linkage framework.
How has this new legislation impacted foreign patent holders? Has the Chinese Patent linkage framework worked as designed? On occasion of the second year’s anniversary of the Chinese patent linkage we will try to answer the above questions.
The recent draft amendment of the Chinese trademark law seems to finally zero in on trademark squatters, as described in my previous blog here). The new regulations, if approved as drafted, will make it more difficult for squatters to steal others’ trademark by abusing the first-to-file system in force in China. This could be a historical turning point in China’s fight against trademark theft, a plague that has negatively affected many foreign right holders more or less famous in the past twenty years. Even before the draft amendment, the China National Intellectual Property Administration (CNIPA) had already started loosening evidence and administration standards to favor oppositions and invalidations proceedings filed by victims of trademark theft. However, squatters have taken notice of all this. Ever resourceful and ready to exploit as much as possible any possible legal loopholes, they have devised new ways to hold right holders’ trademarks ransom and thus gain illicit profit. One of the most recent trends is attacking trademark holders with non-use cancellations.
Blog editor and partner in our IP group, Joe Grasser, covers one of the year’s most intriguing IP cases, Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith et al, Case No. 21-869, as part of INDICAM’s podcast series “IPxSUMMER 2023 around the world”. As many will recall, SCOTUS recently upheld a ruling that an early 1980s Andy Warhol’s photograph of the artist Prince was not fair use. The case – and the SCOTUS ruling – have many in the art world still thinking through the impact. Download and listen in on the discussion here.
“Ultimately the dispute at issue was: does Prince made by Warhol, is that a fair use in the context of being used on the Vanity Fair magazine when compared to the original photograph?”
“The Idea of copyright is actually a bundle of different rights… one of the copyright rights is the right to prepare derivate works (e.g., turning a book into a movie, a translation of a book from one language to another). It’s a way where you take your original work and add new expression to it. And you do it sufficiently that it’s sufficiently different, that it’s a new a different thing.”
“Looking forward, what do we say about other fair uses? You have to look at the use, not the work, but the use.”
As we recently covered in this space, the Supreme Court in Abitron Austria GmbH et al. v. Hetronic International, Inc. held that Sections 1114(1)(a) and 1125(a)(1) of the Lanham Act are not extraterritorial and extend only to claims where the infringing use in commerce is domestic. We anticipated that district courts would soon be addressing this decision in pending and future litigation. The first reported decision has now been issued by the District of Delaware, and it holds that Abitron does not prohibit a party from introducing evidence of foreign conduct in support of an infringement claim under the Lanham Act claim.
Whilst much of this consultation is concerned with the regulatory compliance arrangements for the testing and marking of products what has received less immediate media coverage are proposals also included to impose additional duties on the operators of online marketplaces through which products are sold in the UK.
Specific proposals for online marketplaces which the government is now consulting on include:
