“One of the more intriguing—and worrisome—copyright developments of the year comes from the use of artificial intelligence (AI) to generate creative works…. If you ask ChatGPT who owns the copyright in its creations, the answer may surprise you: ‘As the creator, I own the copyright to it.’”
The Constitution empowers Congress to enact federal copyright laws because the Founders recognized that the best way to advance the public interest is by enabling creators to pursue their own private interests. The copyright system secures uniform property rights to creators across the nation as a reward for their productive labors and as incentive for them to profit in the marketplace. The incredible selection of creative works available to consumers today, in terms of quantity and quality, shows that copyright law is working well. Of course, that doesn’t stop the detractors from throwing as many monkey wrenches as they can. However, looking back over this past year, there’s good reason to think that the naysayers are becoming less relevant. There’s cause to be hopeful that the plight of all creators, big and small, is improving and will continue to get better in the years to come. Striking the proper balance between the rights of creators and the public is never easy, and the digital revolution in particular has caused significant hardships for copyright owners. But after years of disappointing developments, the tide seems to genuinely be turning for the better.
Supreme Court Supports Creators and Tackles Overbroad Fair Use
Let’s be honest. The Supreme Court has delivered some unwelcome news for copyright owners with its most recent decisions. Last year, the Court declared in Google v. Oracle that Google’s verbatim copying of Oracle’s original computer code for use in a competing product was somehow transformative fair use. In 2020, the Court held in Georgia v. Public.Resource.Org that the nonbinding annotations to the Code of Georgia, which merely summarized judicial opinions and cited other reference materials, were unprotectable under the government edicts doctrine. That same year, the Court found in Allen v. Cooper that Congress had not validly abrogated state sovereign immunity for infringement suits in the federal courts, leaving creators like petitioner Rick Allen with limited avenues to pursue claims against infringing states. Thankfully, that regrettable trend for creators came to an end earlier this year with the Court’s decision in Unicolors v. H&M—a rare pro-copyright opinion by the notoriously skeptical Justice Stephen Breyer.
Unicolors marks the Supreme Court’s most recent look at Section 411 of the Copyright Act, which provides that a work must be registered before instituting an infringement suit. The Court clarified in 2019 that registration occurs only once the Copyright Office acts on the application to register. By contrast, Unicolors considers the effect of “inaccurate information” in an application under Section 411’s safe harbor for registrants lacking “knowledge that it was inaccurate.” After some confusion about the scope of the question presented, the Court held that “the word ‘knowledge’ means actual, subjective awareness of both the facts and the law.” This is a huge win for copyright owners. As the government noted in its amicus brief, Section 411 isn’t “a trap for the unwary or for those unschooled in copyright law.” The Court’s decision protects creators by preserving the validity of registrations based on honest mistakes of fact or law. This is especially important given that applications call for complex legal conclusions, such as whether the work is published—a remarkably difficult question to answer.
The Supreme Court also heard oral argument this year in Andy Warhol Foundation v. Goldsmith, a case with the potential to work a sea change to the law on transformative fair use. While the Court addressed fair use last year in Google v. Oracle, that decision was expressly limited to functional computer code. Goldsmith presents the Court with the opportunity to weigh in much more broadly on transformative use under the first factor of Section 107, which assesses “the purpose and character of the use.” As an empirical study by Professor Jerry Liu demonstrates, the issue of transformativeness has been swallowing up the entire fair use analysis to the detriment of creators. This decision, which is expected in early 2023, will potentially rebalance the doctrine away from the expansive understanding of transformative use that erodes the exclusive right of copyright owners to prepare derivative works. At oral argument, the justices peppered the advocates with difficult questions and hypotheticals aimed at nailing down a better test for transformative fair use. The good news for creators is that the Court appears to grasp the exceptional importance of getting it right.
AI-Generated Works Go Mainstream, But Creators Are Cautious
One of the more intriguing—and worrisome—copyright developments of the year comes from the use of artificial intelligence (AI) to generate creative works. From search engines and spam email filtering to virtual assistants and self-driving cars, there’s no denying that AI has become a mainstay of our digital lives. And while AI-generated art and text have been around for some time, the headlines this year are filled with stories about the powerful new AI tools for creating digital works that have become widely available. These include programs that can create images from users’ textual inputs, such as DALL-E 2, Stable Diffusion, and Midjourney, as well as text-based chatbots like ChatGPT that interact with users in a conversational manner. The interesting question for copyright law is whether these AI-generated works are protectable. If you ask ChatGPT who owns the copyright in its creations, the answer may surprise you: “As the creator, I own the copyright to it.” But can an AI really own a copyright?
Earlier this year, the Copyright Office made clear that it thinks not. After Stephen Thaler attempted to register digital artwork that was created autonomously by an AI, the Copyright Review Board affirmed the examiner’s denial of registration. The Office reads the Copyright Act and the case law interpreting it to require human authorship—no monkey selfies allowed. While Thaler focuses on works entirely created by AI, the protectability of those made with AI assistance presents a trickier issue for creators. As the Office’s Compendium notes, the “crucial question” is “whether the traditional elements of authorship in the work were actually conceived and executed not by man but by a machine.” That line is already proving somewhat difficult to draw. After registering a partially AI-generated graphic novel in September, the Office cancelled the registration a month later. The takeaway for creators, though, is that the copyright system protects what matters most—human authorship—and that’s true even when they use tools like AI to bring their creations to life.
Much like NFTs, AI-generated works raise issues for creators beyond mere registrability. OpenAI, the company behind DALL-E 2 and ChatGPT, and others have been sued over the unlicensed use of copyrighted works to train their AI systems, raising significant concerns about authorial autonomy and consent. Likewise, the popular AI-based application Lensa that turns selfies into avatars is under attack by creators for “pilfering their style and threatening their livelihoods.” Artists are unhappy about an AI-generated work winning an art competition, and songwriters are worried about being displaced by AI-generated music. These are all valid concerns, and the Copyright Office has been looking into issues like these with its symposiums in 2020 and 2021. Senators Thom Tillis and Chris Coons recently asked the Office to establish a national commission to study AI with the Patent Office in 2023, and they agreed in principle while noting that “the IP issues involved in AI are complex and growing in urgency and importance.” NFTs may be fading away, but the work for policymakers to address the concerns surrounding AI-based creations is only just beginning.
New State Attacks on Federal Copyright Law Go Nowhere
One of the stranger assaults on the rights of creators comes from state legislatures that have been duped into thinking that they have a significant say in the way creators disseminate their federally protected works in the marketplace. The peculiarity stems from the simple fact that federal copyright law preempts contradictory state laws both explicitly and implicitly. But that inconvenience hasn’t stopped them from trying. The thinking behind this latest vector of attack appears to be that, unlike other businesses that create valuable outputs, copyright owners are wrong to care about making profits. That position profoundly misconstrues the copyright bargain. As Justice Ruth Bader Ginsburg reminds us in Eldred v. Ashcroft, “copyright law celebrates the profit motive, recognizing that the incentive to profit from the exploitation of copyrights will redound to the public benefit.” Creators controlling how their works are sold or licensed in the marketplace isn’t a bug of the copyright system; it’s the primary feature.
The trick to selling states on the notion that they should curb creators’ rights—and violate basic principles of federalism in the process—seems to be finding a sympathetic party that suffers some alleged harm. This dynamic explains recent efforts by a handful of states to pass compulsory licensing laws that would force publishers to license electronic versions of their literary works to public libraries on terms that the state finds reasonable. The New York state legislature passed a bill in 2021, though the governor vetoed it as “preempted by federal copyright law” because “only the author” can decide “to whom they wish to share their work and on what terms.” The governor of Maryland was not so wise, and its version of the compulsory licensing law went into effect on January 1st of this year. A lawsuit brought by the Association of American Publishers quickly shut it down. After scoring a preliminary injunction in February that prevented the law from being enforced, Maryland stopped defending the law’s constitutionality altogether. The district court then declared the law to be “unconstitutional and unenforceable because it conflicts with and is preempted by the Copyright Act.”
The other vector of attack on creators’ rights in the states comes with the compassionate story of farmers who can’t repair their tractors because copyright law somehow stands in the way. The most vocal proponents of the right-to-repair narrative are not true defenders of agrarian society; they are mouthpieces of the technology companies that benefit from weakened copyright protection. Many states have been considering overbroad bills that would force copyright owners to turn over their copyrighted works and the keys to the locks they use to protect them from unauthorized access and copying. As above, these right-to-repair bills are preempted because they conflict with the rights secured to creators under federal copyright law. The New York state legislature passed right-to-repair legislation this past June, but the bill hasn’t even been presented to the governor—the same governor who vetoed New York’s unconstitutional compulsory licensing bill last year. Happily, and despite some claims by advocates to the contrary, these state efforts to hurt creators have been doomed from the start.
Looking Forward to 2023 for Creators
Since the first Copyright Act was enacted in 1790, federal copyright law has benefited us all by enabling creators to determine for themselves whether and how their copyrighted works are distributed to the public. Despite the great cultural successes over the past two centuries, the copyright system has its share of skeptics—and it probably always will. But there will also be plenty of people who recognize the immense value of the creative ecosystem and the fundamental importance of protecting the rights of creators. On that front, creators had some nice wins in 2022, and it looks like there will be even more in 2023. The Copyright Claims Board, which gives individuals and small businesses an affordable venue to enforce their rights, will be in full swing. The controlled digital lending theory, which thwarts the rights of creators and the democratic process, will likely be struck down on the merits. The Electronic Frontier Foundation’s baseless attack on copyright law under the guise of free speech will continue to lose. The list goes on. And most important of all, the Supreme Court seems inclined to rein in transformative fair use and restore some much needed balance for creators.
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