Business

How AI Impacts Intellectual Property

Dan Nicholson

Intellectual property (IP) encompasses the rights granted to individuals and businesses over their creations, including inventions, literary and artistic works, symbols, names, and images used in commerce. The World Intellectual Property Organization defines IP as “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce.” These rights, protected through patents, copyrights, and trademarks, are crucial for allowing businesses to benefit financially and gain market recognition. In an era where artificial intelligence is becoming integral to business operations, understanding the intersection of AI and IP law is essential to protect creative assets and ensure compliance with IP regulations.

Copyrighted Content: A Battleground for AI and IP

One of the most significant impacts of AI on IP is in the realm of copyrights. Traditionally, copyrights protect original works of authorship including books, music, and art, provided these creations are fixed in a tangible form. However, AI complicates these grounds, primarily because it challenges the notion of what constitutes an author. 

A recent example of how AI complicates IP rights surfaced last year in the music industry. A song titled “Heart on My Sleeve” was supposedly released by Drake featuring The Weeknd. Intriguingly, neither artist had actually created or produced the track. Instead, the song was generated by an AI using voice-mimicking technology and subsequently uploaded to various music streaming platforms. The growing prevalence of such AI-generated content highlights the ongoing and escalating risks of copyright infringement in the creative sectors.

In the United States, the Copyright Office has ruled that AI cannot be considered an author. Although AI can generate music, literature, and art that might qualify as original under traditional definitions, current laws state that they cannot get copyright protection if they were made “without any creative contribution from a human actor.” This stance reflects a broader consensus but also highlights a growing area of contention as AI becomes more sophisticated at creating works that might otherwise be indistinguishable from those created by humans.

Can AI-Generated Work Be Patented?

Patents are another area of IP law that is being challenged by AI. Current regulations stipulate that patents are granted to individuals, explicitly requiring that an inventor be a natural person. This definition excludes AI, regardless of the role it may play in the inventive process. The debate over whether AI can be an inventor has been highlighted in several legal battles, such as the 2022 case involving an image generated by an AI called DABUS, which sought recognition of the AI as an inventor.

These cases underscore the need for IP laws to adapt and potentially redefine what constitutes an inventor. As AI increasingly plays a role in creative and inventive processes, the law may need to consider new frameworks that acknowledge AI's contributions without undermining the foundational principles of patent law.

AI's Challenge to Trademarks and Brand Identity

Trademarks protect symbols, names, and logos that distinguish goods and services. The proliferation of AI-generated content poses new challenges for trademark protection, primarily through the increased risk of unintentional infringement. AI systems can generate images or text that may inadvertently violate existing trademarks, potentially leading to consumer confusion and diluting brand identity.

Moreover, as AI technology advances, the potential for these systems to autonomously create logos or brand names without human oversight could lead to legal conflicts over trademark infringement and brand identity theft. At the same time, AI also offers solutions to these problems, such as advanced algorithms capable of monitoring and identifying trademark infringements across digital platforms.

Challenges and Solutions for Businesses

Businesses face significant challenges in managing IP in the age of AI. One major issue is the risk of AI-generated content inadvertently infringing on existing copyrights. To mitigate this, companies should establish robust content review processes and utilize AI monitoring tools to trace data origins in AI training models, ensuring compliance with copyright laws. Moreover, businesses must be vigilant about trademark infringement risks posed by AI-generated logos or brand names. Implementing AI-driven trademark monitoring systems can help identify potential conflicts early, safeguarding brand integrity.

Dr. Keegan Caldwell, founder of Caldwell Law, gave the following example in an article for Forbes: Imagine “an advertising proposal asking competing agencies to draft a commercial script. While a user might make revisions to the AI-generated response, there is still a high chance that the LLM will draw on copyrighted material and produce a plagiarized piece. This problem intensifies when multiple users provide the LLM with the same prompts. Even without using copyrighted material in the response, the LLM might produce multiple identical pieces of work.” This puts businesses at risk for unintentionally breaking copyright law, leaving them vulnerable to legal actions. 

To mitigate these risks, businesses should integrate legal reviews and use advanced AI tools to monitor and validate AI-generated content and inventions. Legal and marketing experts Gil Appel, Juliana Neelbauer, and David A. Schweidel, writing for Harvard Business Review, have some recommendations to help businesses protect their IP assets. First, they should “demand terms of service from generative AI platforms that confirm proper licensure of the training data that feed their AI” and take legal action if AI developers fail to respect these protection measures.

They also suggest that “businesses should add disclosures in their vendor and customer agreements (for custom services and products delivery), if either party is using generative AI to ensure that intellectual property rights are understood and protected on both sides of the table.” 

Developing internal guidelines for AI use in content creation and invention can prevent potential IP conflicts. Furthermore, regular training for staff on IP rights related to AI will ensure that employees are aware of the legal landscape, reducing the risk of infringement.

Conclusion

For business owners, adapting IP strategies to accommodate AI technologies is crucial. By understanding the complexities AI introduces to copyright, trademark, and patent laws, businesses can better navigate the potential pitfalls. Proactive measures, including implementing AI monitoring systems and seeking legal advice, are essential to protect IP rights effectively. As AI continues to evolve, staying informed and prepared will enable businesses to leverage AI responsibly and maintain their competitive edge in the marketplace.

Sources

WIPO

NPR

Copyright.gov

Juve Patent 

Harvard Business Review

Dan Nicholson is the author of “Rigging the Game: How to Achieve Financial Certainty, Navigate Risk and Make Money on Your Own Terms,” deemed a best-seller by USA Today and The Wall Street Journal. In addition to founding the award-winning accounting and financial consulting firm Nth Degree CPAs, Dan has created and run multiple small businesses, including Certainty U and the Certified Certainty Advisor program.

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