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November 30, 2023

Intellectual Property Laws and Data Privacy in the Age of Artificial Intelligence

Caleb L. Green, Esq.

Artificial intelligence (AI) is rapidly transforming many industries and creating new opportunities for innovation. A recent study by Stanford and MIT found that generative AI-based conversational assistants, using data from 5,179 customer support agents, enhanced worker productivity by 14%. Even Wall Street has seemingly embraced artificial intelligence with open arms. For example, this year, several publicly traded companies have realized a direct correlation between increased discussions on AI during quarterly conference calls and increased stock performance.

However, the rise in popularity and utilitarian features of AI may pose significant challenges to intellectual property (IP) law and data privacy if not implemented carefully. As AI systems become more sophisticated and merged into the workplace and existing infrastructure, they may be increasingly generating works and inventions that raise complex questions about intellectual property and data ownership, protection, and liability. At the same time, AI is also creating new forms of data collection, analysis, and sharing that require careful consideration of privacy and security issues. In this article, we will explore these challenges and discuss how smart IP laws and data privacy regulations can help balance innovation and protection in the age of AI.

AI and IP: Copyright and Patent Protection for AI-Generated Works and Inventions

One of the most pressing issues that AI raises for IP law is the question of ownership and protection for works and inventions generated by AI systems. In the past, IP laws have generally focused on human creators and inventors, but as AI becomes more sophisticated, it is becoming increasingly common for AI systems to generate content and inventions independently. This raises important questions about who owns the rights to these works and inventions and how they can be protected.

Copyright is one area of IP law that has been particularly affected by AI-generated works. For example, AI systems can be used to generate music, art, and literature, which can be difficult to distinguish from works created by human authors. This raises questions about whether AI-generated works should be eligible for copyright protection and, if so, who should be the copyright owner. Some argue that AI-generated works should be treated as works of joint authorship between the AI and its human creators, while others argue that they should be considered as copyrightable works of the AI alone.

The US Copyright Office and several US federal courts have made it clear that works solely created by artificial intellectual tools will not enjoy copyright protection in the United States. For example, the Thaler v. Perlmutter dispute has become the epicenter of the artificial intelligence copyright debate and raises important questions about the future of copyright law in the age of AI. This dispute involves Stephen Thaler, a scientist and technology entrepreneur, who filed a copyright application to register the computer-generated work, “A Recent Entrance to Paradise,” on November 3, 2018. On the application, Thaler listed Creativity Machine as the author of the work and indicated himself to be the claimant, with a transfer statement explaining he acquired ownership of the work because of his “ownership of the machine.” The Copyright Office refused to register the work on the basis that it did not satisfy the second prong of the US Copyright Act’s originality requirement, which considers “authorship.” Thaler challenged and appealed the Copyright Office’s decision in federal court, arguing that copyright law is expansive enough to encompass AI-generated works. On August 18, 2023, in the Thaler v. Perlmutter matter, the United States District Court for the District of Columbia affirmed the Copyright Office’s position that artwork generated autonomously by artificial intelligence (AI) alone is not entitled to protection under the Copyright Act. The court’s decision is significant because it is the first federal court decision to address the issue of copyright protection for AI-generated works. The decision is also consistent with the Copyright Office’s longstanding position that copyright extends only to works created by human authors.

Similarly, the rise of AI has also created challenges for patent law. AI-generated inventions can be difficult to attribute to specific inventors or teams, which can complicate the process of determining patent ownership and inventorship. Currently, the general rule is that machines using artificial intelligence tools cannot be named as the inventor of a US patent because it is not a legal person. The current law also requires that an inventor contribute to the invention’s conception.

Even if a user’s prompt results in an AI model generating creative content, the prompt may not qualify as “inventorship” of the output. This is a complex legal question that Congress or the courts will need to decide. Specifically, they will need to determine whether a user’s prompt(s) to a generative AI system can qualify as contributing to the conception of the output, assuming that the output would otherwise be considered patentable subject matter. In other words, the question is whether a user who provides an input prompt to an AI model can be considered an inventor of the AI-generated output, even if the AI model itself does much of the creative work.

Some argue that AI-generated inventions should be treated differently from human-generated inventions since they may involve more incremental improvements or be based on large-scale data analysis rather than individual creative insights. However, others argue that AI-generated inventions should be treated the same as human-generated inventions since they still represent valuable contributions to innovation.

AI and Data Privacy: Challenges in Data Collection and Cybersecurity

In addition to raising questions about IP law, AI poses significant challenges to data privacy and collection. AI systems are heavily reliant on data, and collecting and using this data can raise important privacy and security concerns. For example, AI systems often collect substantial amounts of sensitive personal data from users, such as search history, geolocation data, credit card information, and social media activity. As a result, companies employing generative artificial intelligence tools may need to adopt protocols to ensure the security of sensitive personal identifiable information. Additionally, to avoid liability with US data privacy laws, businesses will be required to update their Privacy Policies, explaining how personal information is collected or sold through these AI-systems.

The implementation of AI-systems also raises cyber threat concerns. At its core, AI algorithms and systems require substantial data to learn and accurately predict. While this data can be used to train AI algorithms, it can also be vulnerable to hacking, theft, or misuse. To address these concerns, there is a need for uniform and smart data privacy regulations that can balance the need for innovation with the need for privacy and security. This may involve new data collection and use approaches, such as data minimization and anonymization, as well as new standards for algorithmic transparency and accountability. Additionally, organizations will need to invest in robust cybersecurity measures to protect against both external threats and internal vulnerabilities.

Additionally, the use of artificial intelligence tools raises questions about the ownership and control of personal information. Clear regulations must be in place to ensure that individuals have control over their data and that consent is obtained before it is used for AI purposes. Currently, there is no uniform data privacy standard in the United States. Data privacy concerns are addressed on a state-by-state basis, each state adopting its own distinct definitions of personal information and requirements concerning disclosing the use of said personal information.

Conclusion: The Need for Tailored Regulations, Collaborative Approaches, and International Cooperation

The rise of AI is transforming many aspects of our lives, from the way we work and communicate to the way we create and innovate. However, as AI becomes more prevalent, it is also raising important questions about intellectual property law and data privacy. To ensure that innovation is properly incentivized and protected, we need prudent IP laws and data privacy regulations that can adapt to the changing landscape of AI.

This will require a collaborative approach that brings together stakeholders from across academia, industry, and government. It will also require tailored regulations that take into account the unique challenges posed by AI-generated works and inventions, as well as the complex issues surrounding data privacy and security. Finally, it will require international cooperation to draft new and update existing treaties and ensure that these regulations are consistent and effective across different jurisdictions.

In conclusion, the rise of AI is an exciting development that has the potential to transform many industries and create new opportunities for innovation. However, to fully realize the benefits of AI, we need smart regulations that can balance innovation and protection in a rapidly changing landscape. By working together and taking a collaborative approach, we can ensure that AI continues to drive positive change while also respecting the rights and privacy of individuals.

Caleb L. Green, Esq.


Caleb L. Green, Esq. is an Intellectual Property Strategist and Technology attorney in the Dickinson Wright Las Vegas office. His primary areas of practice include intellectual property law, cyber-security and data protection laws, entertainment law, and technology. Namely, Caleb’s experience revolves around trademark prosecution, intellectual property litigation and enforcement, intellectual property management, corporate due diligence, and data protection compliance. Caleb merges his legal acumen with his unique background in computer science and information technology to help clients understand complex technical and legal issues and advise them on how to best protect their proprietary goods and services through intellectual property and privacy laws. For example, Caleb consults and advises clients on various emerging technologies, including artificial intelligence. non-fungible tokens (NFTs), blockchain technology, DAOs, cryptocurrency, and metaverse/virtual reality matter.

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