Senators Blackburn, Coons, Klobuchar, and Tillis have sponsored the "NO FAKES" Act, a bipartisan measure that aims to provide key legislation addressing the issue of digital reproductions. According to the bill, a "digital replica" is any computer-generated, incredibly lifelike electronic representation easily identified as a person's voice or image. The creation, publication, replication, display, distribution, transmission, or other making of the individual's voice or likeness in a digital replica is exclusively permitted by the individual, at least in cases where the activity impacts interstate commerce. Liability, however, only arises when the exclusive right is infringed upon by the knowledge that the user illegally uses digital reproduction.
A person who possesses the NO FAKES digital duplicate right will live for at least life+10 and up to life+70. The descendible right is contingent upon the ongoing, approved public use of the person's voice or likeness for longer than the initial ten years. The bill suggests that a database or registration of these post-mortem rights be kept updated by the Copyright Office.
Another part of the measure is to protect the individual against unscrupulous dealings. The right to a digital replica is inalienable and cannot be transferred during the individual's lifetime, but it may be licensed. You must have a written license signed by the individual, and a reasonably detailed description of the intended uses of the digital replica must be included. It may also have a maximum term of ten years. A minor's digital replica license must expire when the minor reaches 18 and cannot be renewed for longer than five years. The permit is exempt from all those restrictions "if the license is governed by a collective bargaining agreement that addresses digital replicas."
The bill also addresses the First Amendment, with some exceptions to the exclusive right to use a digital replica in documentaries, sports broadcasts or accounts, public affairs, news, or biographical or historical contexts. These exceptions include some degree of fictionalization, legitimate commentary, criticism, scholarly research, satire, parody, and "fleeting or negligible" usage. Courts may interpret the fact that this restriction applies to one exemption but not the others to suggest that using a digital copy in "commentary," "satire," or a "news broadcast" might give the misleading impression that the participant was present.
The NO FAKES Act targets record labels, performers, and online platforms. It creates a takedown system that shields "online service" providers from liability if they block access to an unauthorized digital replica after receiving a notice that resembles the DMCA. Additionally, AI businesses are shielded from secondary liability. Yet, the measure uses a structure akin to 17 U.S.C. 1201(a)(2) to deny this liability protection to goods or services meant to create deepfakes and digital copies.
In a recent case, an Indian playback singer, Arijit Singh, filed a motion with the court to have his name, voice, signature, picture, likeness, caricature, and other personality features protected. He took this move after learning that artificial intelligence platforms used complex algorithms to emulate his personality. Text-to-speech software was even employed on a website to translate text into his voice.
The Bombay High Court favored Arijit Singh, ruling that "this form of technological exploitation not only infringes upon the individual's right to control and protect their likeness and voice but also undermines their ability to prevent commercial and deceptive uses of their identity."
The proposed federal NO FAKES Act broadens the right of publicity, allowing anyone to file a lawsuit without the offender exploiting the victim's commercial value or identity. It prohibits creating a digital clone of a person without their consent, regardless of the identity's financial worth or intended purpose. Each infraction will result in $5,000 fines or standard monetary damages. The act serves as a significant deterrent for unlawful digital duplication by combining restrictions with punitive penalties and discretionary lawyers' fees. It would be illegal to create unauthorized digital replicas and impose statutory damages in multiples of $5,000 for both the creation and distribution of the unauthorized digital replica. Liability could extend to anyone hosting or transmitting such content. This damages formula offers assurance over speculative "causation" damages, avoiding the need to establish intimate and challenging-to-quantify losses for right of privacy cases.
If offenders are "knowledgeable" that the digital duplicate was not permitted, the NO FAKES Act, as proposed by the US Senate, seeks to prohibit the publishing, dissemination, or transfer of such copies. Both people sharing content and websites hosting it may fall under this category. The measure specifically addresses AI models by declaring that their use in the construction, development, distribution, or dissemination of a digital replica is not a defense against a claim made by the offender. This effectively ends the preemptive arguments that owners of AI models would make, as they are unable to escape accountability by claiming that they did not "create" the digital duplicate.
Important lessons learned
The NO FAKES Act unifies inconsistent state treatment by proposing a federal right of action after an individual's death. Additionally, it has broad First Amendment exclusions that do not apply to news articles, documentaries, parodies, or satire. Additionally, the measure allows people to lease their rights to digital replicas, which courts have already ruled can be alienated and licensed. However, the bill prevents firms from obtaining a right to another's publicity through unilateral adhesion contracts, as it needs an attorney to represent the client in order for the license to be legal. As a result, businesses could be prevented from demanding that background performers sign away their likenesses "in perpetuity," a demand that was disputed during the most recent SAG-AFTRA strike.
The bill, supported by both chambers of Congress, aims to curb the growth of generative AI and digital impersonators by introducing more constraints. It's predicted that changes to the legislation will take time, as these technical breakthroughs are only getting started. State laws already in place regarding digital reproductions still need to exclude the new regulations that will go into effect on January 1st in California, New York, and Illinois, respectively. State laws governing sexual deepfakes and misinformation relating to elections remain unaltered. Under the No FAKES Act's trademark and trade secrecy framework, there may be overlapping but distinct state and federal claims.
AI-generated sound recordings are now considered music, and some AI developers even admit that their technology can replicate the vocals of real performers. Actors are taking a stand against deepfake porn and the improper use of digital reproductions in mainstream advertising. The suggested measurement aims to suppress the market for "synthetic content," which deceives consumers and replaces creative professionals.
For most people, this might make AI development less akin to the digital Wild West.
IP Round-up
Anaconda Sues Intel Over AI Software Use After License Lapse: Anaconda Inc., a software maker based in Austin, Texas, has filed a lawsuit against Intel (INTC.O) in Delaware federal court, accusing the chipmaker of illegally using its software for developing artificial-intelligence platforms after its license expired. Anaconda claims Intel has continued to leverage its technology, enhancing its own products and solidifying its presence in the rapidly growing AI market. The lawsuit highlights that over one million companies use Anaconda's software, which is free for individuals and small businesses. Both Intel and Anaconda's attorneys have declined to comment on the case. (Source: Reuters)
Legal Storm Hits Patent Orders, Outsourced Decisions Questioned: In a significant development, the legality of numerous patent and trademark orders issued by the Controller General of Patents, Designs, and Trade Marks (CGPDTM) over the past two years has been questioned. Both the Union Law Ministry and Additional Solicitor General (ASG) Aishwarya Bhati have declared these orders "legally unenforceable" as they were issued by outsourced employees lacking statutory authority under the Trade Marks Act, 1999. The issue arose after CGPDTM outsourced 790 employees through the Quality Council of India (QCI) to address manpower shortages, a decision that led to the approval of over 1 lakh patents, including those for major global companies. However, the Calcutta High Court recently ruled that contractual employees cannot perform quasi-judicial functions, prompting the Department for Promotion of Industry and Internal Trade (DPIIT) to terminate its agreement with QCI and consider annulling the decisions made by these outsourced staff. The ASG has recommended forming a committee of statutorily authorized officials to review the affected orders, emphasizing the need for compliance with legal procedures and the General Financial Rules (GFR) 2017. (Source: IndianExpress)
Pakistan's Supreme Court Upholds Penalty in Starbucks Trademark Battle: The Supreme Court has upheld a case against Lahore-based restaurant Options International for using the name and logo of Starbucks to allegedly deceive customers. Starbucks, a globally recognized coffee chain, filed a complaint with the Competition Commission of Pakistan (CCP), accusing the restaurant of fraudulently selling products under the "Starbucks" brand, thus misleading consumers and harming Starbucks' business interests. The CCP found Options International in violation of the Competition Act, imposing a Rs5 million penalty and additional daily fines for non-compliance. The restaurant appealed, but the Competition Appellate Tribunal increased the penalty to Rs6 million. The Supreme Court rejected the appeal, affirming that the use of Starbucks' trademarks distorted competition and misled the public. (Source: Dawn)
Trump’s Sued for Unauthorized Song Use: The family of late soul legend Isaac Hayes has demanded that former President Donald Trump stop using the 1966 song "Hold On, I’m Comin’," co-written by Hayes and David Porter, at his campaign rallies. Hayes’s son, Isaac Hayes III, shared a legal letter from attorney James Walker, which alleges that Trump’s campaign has infringed on copyright and demands $3 million in licensing fees for unauthorised use between 2022 and 2024. The letter claims Trump continued to use the song despite multiple requests to cease, threatening further legal action and $150,000 in damages per unauthorized use. In addition, singer Céline Dion has also rebuked Trump for using her song "My Heart Will Go On" at a recent rally, though she has not pursued legal action. (Source: Gaurdian)
Bill to Tackle Drug Prices and Patent Tricks: The "Affordable Prescriptions for Patients Act of 2023" (S-150), passed by the US Senate on July 11, 2024, aims to curb anti-competitive practices in the pharmaceutical industry. This legislation targets "patent thickets" and "product hopping," which delay the entry of cheaper generic and biosimilar drugs by extending market exclusivity through multiple patents and forcing patients to switch to newer, patented versions. The bill empowers the Federal Trade Commission (FTC) to limit patent litigation and address these practices, potentially saving taxpayers $1.8 billion, according to the Congressional Budget Office. It complements the Inflation Reduction Act's efforts to reduce drug costs by allowing Medicare to negotiate prices. Despite bipartisan support, the bill faces opposition from the pharmaceutical industry, which argues it could stifle innovation and breach international trade agreements. The next steps involve consideration by the House of Representatives and, if passed, the President’s approval. (Source: AJMC: A Center for Biosimilars)
References:
Beaumont-Thomas, B. (2024, August 12). Family of Isaac Hayes threaten Donald Trump with lawsuit over use of song in rallies. The Guardian. Retrieved from https://www.theguardian.com/music/article/2024/aug/12/family-of-isaac-hayes-threaten-donald-trump-with-lawsuit-over-use-of-song-in-rallies
Brittain, B. (2024, August 9). Intel sued for copyright infringement over AI software. Reuters. https://www.reuters.com/legal/litigation/intel-sued-copyright-infringement-over-ai-software-2024-08-09/
Iqbal, N. (2024, August 11). PTI chairman gets bail till Aug 24 in Sarwar Road case. Dawn. Retrieved from https://www.dawn.com/news/amp/1851510
Mishra, R. D., & Ananthakrishnan, G. (2024, August 11). Lakhs of patent orders by outsourced staff null and void, says law ministry. The Indian Express. Retrieved from https://indianexpress.com/article/india/lakhs-of-patent-orders-by-outsourced-staff-null-and-void-says-law-ministry-9506993/
McCarthy, J. T., & Schechter, D. J. (2019). The rights of publicity and privacy (§ 11:31). New York, NY: West Group.
NO FAKES Act, § (c)(2)(A)
NO FAKES Act, § (c)(2)(B)
NO FAKES Act, § (d)(3)(B)
NO FAKES Act, § (b)(2)(A)(ii)
NO FAKES Act, § (b)(2)(B)(i)
NO FAKES Act, § (b)(2)(B)(ii)
Niazi, S. K. (2024, August 12). Biorationality: Bill to remove double patenting that harms biosimilars heads to the House. Center for Biosimilars. Retrieved from https://www.centerforbiosimilars.com/view/biorationality-bill-to-remove-double-patenting-that-harms-biosimilars-heads-to-the-house
Proposed bill. (n.d.). Defines “digital replica.” NO FAKES Act, § (b)(2)(A)(ii). Retrieved from https://www.coons.senate.gov
