Intellectual property (IP) is the lifeblood of any tech company—and in today’s ultra-competitive market, IP is under attack not only from competitors, but also from customers, former employees, and even foreign nationals. But from AI copyright violations to NFT security violations, the law is still trying to catch up in many respects.
Below, Robert McKinley, Attorney examines a few emerging intellectual property trends and how they seem most likely to play out in the litigation sphere.
“It’s tough to have an IP conversation today that doesn’t involve AI in some respects,” McKinley states.
Take AI-created art as an example. If a computer program is instructed to create a painting of a photograph in the style of Monet, who owns the copyright for the ultimate product? The developer of the AI program? The person who took the photograph? Monet?
The law in this area is still in its infancy, and it’s not clear how it will shake out. Some lawsuits have already begun to challenge how AI tools gain their datasets—that is, if an AI tool relies on copyrighted material to create a “new” product, this product itself may be in violation of copyright laws. Some countries, including Japan and certain EU nations, have revised their copyright laws to account for AI, but the U.S. hasn’t yet, and it’s possible these battles will instead play out in the courtroom.
Disparate Impact Litigation
As more and more processes become automated, including hiring processes, companies are being warned that biases in the automated processes used to screen and assess candidates could run afoul of employment protection laws. It’s important to know what goes into any algorithm—and, sometimes more importantly, what doesn’t—to know whether the use of these AI tools comports with U.S. laws.
“War Exclusion” Clauses
Tech can be a cutthroat industry, with thousands of startups often competing to be the first to market a particular product or idea. But while cyber battles between competitors aren’t a new phenomenon, cyber wars are—that is, attacks made by a sovereign state or nation with the specific goal to undermine or disrupt enemy technology.
In response, many insurers have begun implementing “war exclusion” clauses. Just like property insurers may not pay out claims for acts of war or international terrorism, cyber insurers may not pay out a claim if, for example, a foreign government hacks into Apple’s or Tesla’s servers.
This means that companies with sensitive IP data may need to seek out additional protections to help avoid theft, piracy, or disruption to their processes. “Data loss prevention tools can be one way to do this,” McKinley explains. “These tools can immediately detect any attempted exfiltration of confidential data.”
Security of Remote Work
With remote work becoming a fact of life for many companies, particularly tech companies, employers have faced the new challenge of keeping data secure both on and off-site.
Tech companies can benefit from a holistic management system that allows for easy and remote disabling of corporate accounts, role-based access control, end-to-end data protection technologies, and secure cloud environments. This can ensure that whether an employee’s computer is stolen or they’re simply operating over an unsecured internet connection, any proprietary data can immediately be locked down and any access attempts logged.
Treatment of NFTs
Non-fungible tokens, or NFTs, are assets that have been turned into tokens via the blockchain. Currently, the most valuable NFT is “The Meg,” valued at a whopping $91 million. Every week, between $10 and $20 million in NFTs are traded on the blockchain network, even though about 7 in every 10 Americans doesn’t know what an NFT is.
And while NFTs haven’t officially been classified as securities—yet—the U.S. Securities and Exchange Commission (SEC) began probing one of the most prolific NFT minters recently, sparking rumors that some rulemaking may be on its way.
However, not all NFTs are equal. Some are merely AI-created artwork used as avatars on online message boards; others can provide royalties or services, which would seem much more likely to bring them into the SEC’s purview. The regulation of NFTs remains in its infancy, but with the amount of money being transmitted each day, the next decade is likely to mark an unparalleled uptick in the number of NFT-related lawsuits and newly-enacted statutes.
About the Author:
Robert McKinley is a prominent attorney who has held a number of prestigious leadership roles. He has extensive expertise in intellectual property, litigation, and corporate law and has practiced in New Jersey and Philadelphia and has served as local counsel. Throughout his career, he’s managed assets for over 150 clients. His department was voted Best IP Law Firm for two years in a row by South Jersey Biz. He has 25 years of patent, trademark, and commercial litigation experience.
No Legal Advice or Attorney-Client Relationship: These materials have been prepared for general informational purposes only and are not legal advice.