In Cramer v. Netflix, Inc., 3:22-cv-131 (W.D. Pa. Sep. 18, 2023), the plaintiff brought a lawsuit alleging copyright infringement because a photograph flashed on the screen during the “Tiger King 2” documentary depicted a tattoo of the now famous “Tiger King” (a/k/a “Joe Exotic”), that the plaintiff tattoo artist had inked. Because ownership of original works, like a tattoo, vests with the author (here the tattoo artist), the tattoo artist owned the copyright in the tattoo, even though it was physically on the someone else’s body.
That tattoo in question came about as the result of a contest that the tattoo artist put on during the beginning of the Covid pandemic. Specifically, while on lockdown, she became concerned about her ability to earn income as people were unable to come in for tattoos. As a way to supplement her income, she put on a contest whereby her social media followers would buy gift certificates for future tattoos and would get to vote on one of several funny tattoos that would eventually be tattooed onto the artist’s husband. Ultimately a tattoo of Joe Exotic won the contest.
A recent Federal Circuit decision, Allgenesis Biotherapeutics Inc. v. Cloudbreak Therapeutics, LLC, provides some interesting insights into patent challenge strategies, and their consequences, when a potentially infringing product is not yet on the market.
Allgenesis, which has been developing a pterygium treatment product using nintedanib, filed an inter partes review (IPR) petition to try to invalidate one of Cloudbreak’s patents relating to pterygium treatment. Allgenesis lost at the Patent Trial and Appeal Board (PTAB), which issued a final written decision upholding the patentability of the challenged claims. The PTAB’s decision included a finding that Allgenesis’s own patent application, on which Allgenesis based a number of its invalidity arguments, was not prior art to the Cloudbreak patent.
Allgenesis appealed to the Federal Circuit, which dismissed the appeal, finding that, although the IPR statute permitted Allgenesis to file the IPR, the law governing appeals to the Federal Circuit (which is an Article III court) did not permit Allgenesis to appeal the PTAB’s IPR decision, because Allgenesis did not have standing.
The Federal Circuit recently issued a decision with important ramifications on how petitions for cancellation due to fraud will be handled by the Trademark Trial and Appeal Board (“Board”) going forward.
In Great Concepts LLC v. Chutter, Inc., the Court, with a 2-1 majority, found that the Board wrongly cancelled the registration of a trademark holder due to the filing of a fraudulent declaration by its former attorney to obtain incontestable status of the trademark “DANTANNA’S.” The Board had historically held that it possesses the authority to cancel registrations altogether due to fraudulent incontestability declarations, thus, the panel’s ruling presents a clear rejection of that practice.
In addition to the challenge of the fast-developing nature and potential use (and misuse) of AI, a common challenge which all regulators have faced is the international nature of AI. Put simply AI does not respect international borders and so any nation seeking to regulate its use has to accept that cannot be done isolation or by reference to borders alone.
The often-controversial UK Online Safety Act (the OSA) has finally become law after receiving Royal Assent yesterday, heralding the end of the era of largely self-regulation for user generated content by technology platforms, whether large or small.
The OSA will impose new duties on all providers who host “user generated content” (i.e. services which allow users to post their own content and/or to interact with other users) and internet search engines. The OSA has extraterritorial effect meaning it applies not only to providers based in the UK but also to any overseas providers of services which have a significant number of UK users (or the UK is a target market for their service) and any such services which are capable of access by individuals in the UK and have a material risk of significant harm to individuals in the UK.
The U.S. is generally viewed as “behind” in its regulation of AI compared to the European Union and Asian countries. Yet ChatGPT’s release triggered a tsunami of U.S. legislation in 2023 from federal and state legislators seeking to address perceived concerns with the emerging and fast evolving technology. State legislatures have introduced nearly 200 AI bills in 2023. Congress does not have nearly that number of AI bills, with about 30 bills tabled thus far. The various pieces of U.S. legislation – federal or state – seek to regulate both the creation of AI models and how those models may be used.
In gridlocked Washington, D.C., a comprehensive federal approach to AI – including the U.S. Government’s role in regulating it – has received bipartisan support. This is likely because AI regulation overlaps nicely with bipartisan issues like national security concerns vis-à-vis the People’s Republic of China; transparency issues (e.g., uses of the technology, and the existence of a human decisionmaker component in “higher risk” AI use categories); deep fakes and election/disinformation concerns; safeguarding against the exploitation of children; and licensing/ensuring copyright protection of existing works. Of course, partisan approaches to AI policymaking also exist. Republican lawmakers want guardrails that do not stifle American innovation, recognizing that AI has a role in ensuring America’s competitive edge globally, while democratic lawmakers tend to focus on the prevention of bad impacts on consumers and workers based on the potential (mis)use of AI.
It seems the Supreme Court will decide (again) whether a claim for copyright infringement can extend to infringement that occurred more than three years before filing suit. In Warner Chappell Music, Inc. v. Nealy, the Supreme Court will resolve a classic circuit split – the Second Circuit holding that no damages can be obtained for acts of infringement older than three years, and the Ninth and Eleventh Circuits holding that a plaintiff can recover all of its damages if it commences litigation within three years of discovery.
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.
