Disputes Yearbook 2023:
Intellectual property disputes

Can AI engines use IP protected material to learn?

Courts in both the US and UK are deciding on a number of cases relating to the use of IP protected materials in the training of AI engines. These cases could have significant implications as to whether and how businesses can protect their publicly available material, which may have already been used to train AI engines. In Getty Images Inc v Stability AI, the UK High Court is deciding how existing copyright and database right law applies to Stability AI's use of Getty's library of photographs and images to train its Stable Diffusion text to image generation product. The court will hear preliminary arguments on exactly how the AI engine learns using the training materials to determine whether Getty has a sustainable case and will later look at whether Stable Diffusion's output can also be an infringement. There are parallel proceedings between the parties in the US. In a similar case in the US, Thomson Reuters is objecting to the use of its material on the Westlaw service to train an AI engine.

Policymakers are also working out their approach. In EU AI Act is in its trialogue stage but in the UK, the UK Parliamentary Select Committee has published recommendations, including identifying several areas where IP needs addressing. The UK Intellectual Property Office is also working on a code of practice around AI and IP.

Who owns AI creations?

Another significant area of uncertainty is whether an AI engine's output can be protected under IP law in the same way as human authored materials. The US Copyright Office (USCO) has maintained its view that images produced by AI engines are not protectable by copyright due to the lack of a human author. This was confirmed by the US court in relation to an application made by Dr Thaler for protection for copyright images. While the protectability elsewhere in the world under copyright is still not formally determined, the USCO approach is a warning to companies utilising AI engines that their output may not have the usual IP protections. In terms of patentability, patent offices worldwide have continued to develop guidance on the patentability of inventions involving AI, but the UK Supreme Court has yet to decide if an AI engine can be named as an inventor in the DABUS case. Finally, while courts and policymakers decide whether the output of AI engines infringe existing IP rights, companies have taken matters into their own hands to encourage the uptake of the AI products. Microsoft, Google and Adobe are now offering some form of IP indemnity to reassure customers that use of their respective AI products will not lead to liability for copyright infringement claims.

For further discussion, see our Series: The IP in AI and the AI and Generative AI webinars in the Emerging Tech Academy series here.

Helpful guidance on how courts approach IP issues raised by blockchain and the metaverse  

• Blockchain: One case heading to trial in 2024 will determine whether Dr Craig Wright, who claims to be the inventor of Bitcoin, has valid copyright claims to the cryptocurrency – and, by virtue of this, can restrict its use. The litigation is already raising interesting IP issues, including subsistence of copyright (a first instance decision of the English High Court, finding against Dr Wright, was overturned on appeal). See our blog post here.
• Metaverse: Non-Fungible Tokens (NFTs) can be used simply for marketing purposes or as a new form of asset to attract investment or associated with the transaction of products and services into the metaverse. Damages for IP infringement have recently been handed down by the New York (Birkin) and Californian (Bored Ape) courts, which provide guidance on how courts will approach remedies in metaverse/NFT-related litigation.

For more on IP in the metaverse and NFTs, see our series of blog posts here and HSF's Emerging Tech Academy series of webinars here for blockchain, NFT and metaverse content.

The new unified patent litigation system in Europe makes a promising start

The Unified Patent Court (UPC) has come a long way in the six months since its launch on 1 June 2023. The cases filed include over 50 infringement actions as well as over 20 revocation actions and span a variety of sectors, including life sciences, consumer goods and mechanical engineering, and involve parties from the US, India, UK, Switzerland and UPC-participating EU states.

So far, the UPC has:

• Confirmed that opt-out cannot be withdrawn if national proceedings have been commenced, even if these were begun before the UPC started.
• Granted both inter partes and ex parte injunctions and an order to enforce one of these that had been breached.
• Granted seizure orders.
• Held that a wholly owned subsidiary, newly created and directed by its parent company was a separate party and so could bring a revocation action in the central division when the parent company was already involved in an infringement action in a local division, with the strategic implications that entails.
• Refused seemingly reasonable requests for access to pleadings in some cases and allowed them in others (not the subject of appeal).
• Confirmed how to use the IPC classifications to determine the central division to file revocations in.
• Ruled on many other procedural issues and interpretation of the UPC Rules.

To read more on the UPC's first months in action, see our blog post here and click here to request our briefing providing a more detailed analysis and future quarterly UPC briefings.