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Litigation versus innovation-treading the IP tightrope in the AI era

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by Tim Mulligan

The year so far has been largely shaped by AI and perception of just how much it is poised to transform consumer lives. The primary focus has been on the technology and how it may be applied. However, the emerging legal framework around which the AI ecosystem will operate is equally important. Currently, the leading consumer-focused AI companies are based in the US. As a result, the companies and individuals most at risk in this early wave of AI disruption are seeking to use the case law model of the US legal system to establish vital foundational boundaries. These boundaries would dictate how far for-profit companies such OpenAI can freely use copyrighted material to train their Large Language Model (LLM)s in order to replicate and potentially supplant the human creators behind the training material. Two cases currently being brought against OpenAI highlight the parallel twin threats to media. They also offer differing routes for post-settlement monetisation of AI for the entertainment ecosystem.

The news publisher case against OpenAI

In December 2023, The New York Times launched a lawsuit against OpenAI, the company behind AI search / output tool ChatGPT. The New York Times believes that millions of its published articles were used without permission to train ChatGPT. The lawsuit also claims that the tool is now competing with The New York Times as a trustworthy information source and that ChatGPT sometimes generates verbatim excerpts from New York Times articles which are behind its subscriber paywall, thus undermining its core business model. With damages estimated in the billions of dollars, a ruling against OpenAI will force the tech disruptor to either seek an expensive licensing deal with The New York Times or pay out the insurmountable damages to maintain its current operating model.


The authors case against OpenAI

Earlier in September 2023, a group of US authors led by George R. R. Martin (known for his fantasy series A Song of Ice and Fire, which was adapted into the successful HBO show Game of Thrones) and John Grisham (known for his legal thrillers such as The Firm and The Pelican Brief) launched a copyright infringement case against OpenAI regarding copyright violations incurred during its LLM training. If successful, then the court case will have similar implications for OpenAI to The New York Times case. However, a licensing model for the authors will be far less likely to succeed. This is due to the fact that what is at risk for authors is ultimately theft of their creativity, which will be exacerbated by licensing away works for LLM training.

Ultimately, both legal cases have the importance of acknowledging (and enforcing) copyright on the one hand, and securing a post-AI disruption future for news publishing and creative fiction on the other. With Sora now launched, TV and film is next in line for existential disruption. How they handle this will depend heavily upon the precedents set by the resolution of these two lawsuits. The success of streaming in monetising a new way of consuming media hints at how this might be achieved if the media majors are willing to embrace forward-thinking ways of monetising their assets through the likes of IP sandboxes and IP banks. If the regulatory framework is robust, then the opportunity for mass customisation becomes a reality. Reach, engagement, and licensed monetisation will ultimately follow.

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