FATA News Alert
Contributing Author: Suzanne R. Thompson, CPA, CFF, CGMA, CFE
In the News: The Intersection of AI Technologies and IP Law
Background:
The intersection of artificial intelligence (AI) technologies, including machine learning and deepfakes, with intellectual property (IP) litigation is a rapidly evolving area. As AI technologies advance and the behavior of AI mimicking human actions increases, new trends, opportunities, and challenges emerge in the IP litigation arena.
Trends in AI and IP Litigation:
AI and Patents
The growth of AI tools has led to more inventions created either entirely or partially by AI systems. A key trend is whether AI-created inventions can be patented and who should be listed as the inventor (AI vs. human inventor). This aligns with the Patent Act that defines inventors as "the individual or … individuals collectively who invented" [35 U.S.C. § 100(f)]. Recent court rulings, such as Thaler v. Vidal, affirmed that only natural persons, not artificial intelligence, can be named inventors; this decision was consistent with the U.S. Patent and Trademark Office’s decision to deny Mr. Thaler’s patent application.
However, as AI continues to develop, this could change. Additionally, as more AI-related patents are filed, concerns around the quality of patents and the ability of patent offices to assess the novelty and non-obviousness of AI-driven inventions are growing. This could lead to a rise in litigation around patent validity.
AI and Copyrights
As AI is used to generate creative works (e.g., music, art, articles, etc.), courts and legislatures face the challenge of determining whether AI-generated works are eligible for copyright protection. Traditionally, copyright law protects works with human authorship, but the role of AI in creating content is prompting rethinking. In early 2023, the U.S. Copyright Office launched an initiative examining copyright law and policy issues raised by artificial intelligence, including the scope of copyright in AI-generated works and the use of copyrighted materials in AI training. The first part of the Copyright Office’s report, published July 31, 2024, addresses the topic of digital replicas (the use of digital technology to realistically replicate an individual’s voice or appearance) and concludes with a recommendation that Congress establish a federal right that protects all individuals during their lifetimes from the knowing distribution of unauthorized digital replicas. Subsequent parts will turn to other issues, including the copyrightability of works created using generative AI, training of AI models on copyrighted works, licensing considerations, and allocation of any potential liability.¹
AI and Trade Secrets
Companies are increasingly treating their AI algorithms and datasets as trade secrets rather than patenting them, to avoid disclosure. This leads to litigation involving the misappropriation of AI models, algorithms, and training data under trade secret laws, especially when employees with access to these assets move between companies.
¹ U.S. Copyright Office, “Copyright and Artificial Intelligence,” https://www.copyright.gov/ai/.
Expectations and Emerging Legal Changes:
Changes in Patent and Copyright Offices
Governments and IP offices may revise their rules on AI-related filings. For example, the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO) are actively consulting stakeholders on how AI fits within existing frameworks.² ³ A shift in policy could occur if the consensus leans toward broader protection for AI-generated inventions or creations.
New Legal Precedents
As AI technologies become more prevalent, new legal precedents will likely emerge, particularly in areas related to the admissibility of AI-generated evidence and the legal responsibilities of AI developers. As AI continues to evolve, courts are expected to address novel issues of ownership, liability, and infringement. Future legal frameworks may evolve to include clearer guidelines on AI-generated content, with courts or legislatures potentially recognizing AI as an "author" or "inventor" in certain situations.
Increasing Role of AI in Legal Processes
AI is being used to develop sophisticated algorithms that can automatically detect IP infringement. These tools can scan vast amounts of data to identify unauthorized use of copyrighted material, trademarks, or patents. For example, AI can analyze images and videos to detect potential copyright violations, making it easier to monitor and enforce IP rights. AI tools are also being increasingly used to streamline legal research, document review, and e-discovery in IP litigation. These AI-driven tools can enhance litigation efficiency but may also raise questions about their accuracy and biases in identifying relevant precedents or documents. AI tools are expected to make IP litigation more efficient by automating routine tasks and reducing the time and cost associated with legal research, evidence gathering, and case preparation.
Cautions for Practitioners:
Regulatory Challenges: The rapid advancement of AI technologies may outpace existing regulations, creating challenges for legal and other professionals. Staying abreast of regulatory developments will be essential.
Bias and Misinformation: AI algorithms used in patent and trademark systems, as well as in court proceedings, may inadvertently introduce biases or propagate misinformation if they are trained on inaccurate or misleading data. It is crucial to ensure that AI tools are trained on diverse and representative datasets. Addressing these biases and sources of misinformation, whether in IP portfolio management tools, legal research platforms, or litigation support AI systems, requires a multifaceted approach, including careful selection and curation of training data, transparency in algorithm design, and ongoing monitoring and validation of AI outputs.
Admissibility of AI-Generated Evidence: The legal system is still grappling with the admissibility of AI-generated evidence. Courts may require rigorous validation of AI tools to ensure their reliability and accuracy. Additionally, deep fakes pose a significant risk to the authenticity of evidence. The use of sophisticated AI to create fake videos, audios, or documents could lead to legal challenges in verifying the legitimacy of evidence. Courts will need to develop techniques to identify and authenticate AI-generated materials.
² United States Patent and Trademark Office, “Artificial Intelligence," https://www.uspto.gov/initiatives/artificial-intelligence.
³ European Patent Office, “Artificial intelligence” (May 2023 conference), https://www.epo.org/en/news-events/in-focus/ict/artificial-intelligence.
Takeaways:
The rise of AI, machine learning, and deepfakes is reshaping the landscape of IP litigation. As AI technologies advance, they raise novel legal questions regarding ownership, protection, infringement, and liability. The integration of AI technologies into the IP litigation arena holds significant promise for improving efficiency, accuracy, and outcomes. Legal frameworks and practices must adapt to address these changes, while practitioners need to be vigilant about the challenges and risks associated with AI-driven evidence and processes. As case law develops, expect ongoing debates and refinements in how intellectual property law applies to AI technologies.
Learning Resources:
Forensic Accounting and Litigation Consulting | FVS Eye on Fraud: An overview of AI’s impact on forensic accounting.
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The Forensic Accounting Technology & Analytics (FATA) task force serves as a strategic leadership group for the integrated areas of accounting information systems, data analytics, and digital financial forensics. This group facilitates uniquely cross-trained experts into an innovative and strategic thought leadership team, whose primary roles include: stimulating forward-thinking solutions to emerging FATA issues in our global economies; promulgating best practices that are unique to FATA practitioners and environments; identifying and developing FATA resources to enhance learning and professional development opportunities; and educating members and stakeholders to promote FATA’s mission through strategic global relationships.