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LEGAL BRIEF

By Max Stul Oppenheimer, Esq.

You may not realize that you have a valuable asset, one that companies are willing to pay big bucks for.

Unfortunately (for you), to date those companies have paid the big bucks to someone else: $76 billion to Google in the last quarter of 2022, $31 billion to Amazon for advertising alone last year. Those companies (and others) are selling access to your personal information. There is nothing illegal about that — you willingly (although perhaps not purposely) provided them the information.

You have another asset that you may not think of as valuable, but it’s one that is becoming increasingly valuable: your emails, texts, and other things you’ve posted on the internet. These are the grist for the artificial intelligence (AI) mill, the training materials that allow AI engines such as OpenAI’s ChatGPT, Microsoft Bing, Stability AI’s Stable Diffusion, and others to learn enough to be able to respond to prompts and create text and images in response. Once again, though — unfortunately for you — these assets are also being used without your seeing a penny in compensation.

Sarah Andersen, Kelly McKernan, and Karla Ortiz want to change that. In case the names are not familiar, Sarah Andersen is a full-time cartoonist and illustrator whose graphic novel FANGS was nominated for an Eisner Award. Kelly McKernan is a full-time artist who creates original watercolor and acryla gouache paintings for galleries, private commissions, and her online store. Karla Ortiz is an  internationally recognized, award-winning, full-time artist whose art has been showcased in notable galleries such as Spoke Art and Hashimoto Contemporary in San Francisco; Nucleus Gallery, Thinkspace, and Maxwell Alexander Gallery in Los Angeles; and Galerie Arludik in Paris.

We learn this and more in a lawsuit filed in California — they have asked to be granted class action status to recover damages from a group of AI defendants. They offer a number of theories as to why the defendants owe money to the class (which probably includes you): copyright infringement, the right of publicity, and unfair competition. They allege that the defendants used Web-scraping tools to acquire “billions of copyrighted images without permission” to train their AI engines; furthermore, that they used these images to create derivative works which, the suit alleges, are merely collages. If you’re curious about how the process works but do not want to delve into the details of the Sohl-Dickstein model, paragraphs 66–100 of the lawsuit provide a good overview — but you’ll miss a nostalgic trip back to your thermodynamics class.

More specifically, they allege that using an AI engine to create an artwork “in the style of” a particular artist siphons revenue from that artist. However, that allegation goes to the amount of damages rather than to whether there was a copyright violation in the first place.

The copyright claim is the most straightforward — and the one most likely to apply to you, unless you happen to be a famous artist or writer. The copyright statute gives the author of an original work the exclusive right to reproduce that work, publicly distribute that work, and create derivative works based on the original.

According to the suit, the defendants made and stored copies of works in their training data sets and, in response to user prompts, used those works to create derivative works. The defendants will likely respond that what they have done is either licensed (remember that user agreement you clicked to accept? Might be a good time to go back and see what it says —) or is fair use under the Copyright Statute. The fair use provision allows copying, distribution, and preparation of derivative works under specific circumstances — specifically, “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.”

Whether a particular activity falls under those exceptions is determined on a case-by-case basis, but the Copyright Statute offers this guidance: “In determining whether the use made of a work in any particular case is a fair use, the factors to be considered shall include—(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.”

The right-of-publicity theory is interesting. It asserts that when a user requests an image “in the style of” a particular artist, the user trades on the results of that artist’s efforts in “developing distinct artistic identities.” The same theory would apply to something written in the style of a particular author. It rests on a specific California law (Cal. Civ. Code § 3344) and may not be of use to those outside California or those who do not yet have a distinct artistic identity. The complaint does include a common-law theory of the right of publicity, but this too is a right that varies from state to state.

It is interesting that the complaint does not seem to have made any trademark claims. It may be that the plaintiffs had not registered trademarks in any of their works, but common-law trademarks exist.

The case is in its initial stage — there has not even been an answer from the defendants yet — so it would be foolhardy to try to predict how the court will handle it. It is also at the first step of the process of judicial resolution. Once the trial court renders a decision, there are possible appeals to the Ninth Circuit and the Supreme Court.

It does point to the value of copyright in the new AI era, and it suggests that you may have assets you didn’t know about. While you’re waiting to see whether Andersen, McKernan, and Ortiz strike it rich for you, and if you want to improve your claim to ownership of, and the right to be compensated for the use of, those assets, you might want to consider registering your copyright claims.

Copyrights come into existence as soon as you create an “original work of authorship” and fix it in a tangible medium. If someone infringes your copyright, you are entitled to “the actual damages suffered … as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” You need only prove “the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.” So if you sue Google and win, you start with a multi-billion dollar payday.

However, as you might imagine, proving damages can be difficult. The statute provides an easier path to revenue if your work has been registered with the Copyright Office. In that case, if you do not want to prove actual damages, you can instead opt for “statutory damages.” At the moment, they range from than $750 to $30,000 — in the court’s discretion — for each infringement.

Statutory damages are generally available for registered works only, but registration is easy. You can do it online, and fees are typically under $100. The most difficult question on the form is “Will you be paying by credit card?”

Join the conversation! Your questions, comments, and feedback about this topic are always welcome in our forums!

Max Stul Oppenheimer is a tenured full professor at the University of Baltimore School of Law, where he teaches business and intellectual property law. He is a registered patent attorney licensed to practice law in Maryland and D.C. Any opinions expressed in this article are his and are not intended as legal advice.

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