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Intersection of Intellectual Property and Artificial Intelligence

By Sunaina Nassa

The rise of Artificial Intelligence (AI) has been observed in the context of creativity and innovation, and it is believed that it will be assimilated into everyday life in the foreseeable future. Emerging AI technologies offer promising prospects for breakthroughs in the fields of creative arts, entertainment, and life-improving innovations. It is rapidly transforming societies and industries across the globe. From self-driving cars to generative chatbots, AI is revolutionizing the way we interact with technology. Nonetheless, it is vital to acknowledge and understand the social, economic, and ethical ramifications that arise from this phenomenon and to implement appropriate policies to address them. Intellectual Property (IP) and the advancement of new technologies have traditionally gone hand in hand, necessitating regulatory adjustments to keep up with technological and cultural shifts. The field of intellectual property (IP) is undergoing significant changes due to advancements in technology, and AI is no exception. However, the intersection of intellectual property and artificial intelligence raises significant legal and ethical concerns that require attention from policymakers, lawyers, and stakeholders.

The introduction of AI has the potential to cause major changes in the intellectual property system, posing new problems about everything from authorship and invention to property rights and infringement. In this paper, the main objective is to explore the intricate interplay between Intellectual Property and AI and how the prevailing laws need to be remodelled to reflect the increasing prominence of AI in our daily lives.

The Fourth Industrial Revolution

Artificial Intelligence (AI) is often referred to as one of the most prominent drivers of the Fourth Industrial Revolution. AI is the ability of machines to carry out operations that normally require human intelligence. Machine learning, deep learning, Natural Language Processing, and robotics are just a few of the methods that fall under this umbrella. leading to its increased use in various industries, including technology, healthcare, finance, and entertainment. It is a dynamic field with the potential to transform everything from medicine and transportation to the arts and communication. In recent years, AI has evolved significantly, owing to rapid enhancements in computing power, data storage, and algorithms. The global AI market size was valued at “USD 136.55 billion in 2022 and is projected to expand at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030.”[i] With the advent of AI, technology has become integral to businesses. Industry verticals like automotive, healthcare, retail, finance, and manufacturing are pushing the adoption of AI due to the constant research and innovation demanded by the relevant industries. For example, AI is being integrated into everything from self-driving cars to life-saving medical technology. Then, there is Generative AI which allows machines to develop material on their own. This type of programme is meant to function as a two-way conversation between a human user and the programme itself; the user asks questions, and the programme responds with outputs. This has enabled a person from preparing full presentations to generate futuristic images, within a matter of a few minutes. One of the most popular generative AI is the trending “ChatGPT” developed by “OpenAI”. Needless to say that the tech revolution has only enabled AI to become increasingly capable in its various applications.[ii]

In the current economy that is driven by knowledge, Intellectual Property has gained significant prominence and has become a primary concern for the majority of enterprises. The concept of “Intellectual Property” (IP) encompasses a diverse array of intangible assets that are owned by individuals or organisations and are legally protected against unauthorized use or exploitation. It is an intangible creation and innovation of pure human intellect. The emergence of AI, however, raises many problems and inquiries related to IP. IP encompasses AI since the latter is also an intangible product of human ingenuity. There is a nexus between the enforcement of IP rights and the protection of AI and AI-generated works. This paper will explore the issues that arise when AI and IP intersect. The impact of AI’s explosive growth on IP, and the legal implications surrounding the two fields will be investigated further.

Relationship between AI and Intellectual Property

The laws pertaining to AI are still in their nascent phase. The technology behind AI, namely machine learning and big data, has given rise to an array of IP-related issues. These issues are not only complicated but also multifaceted, ranging from patentability and copyright issues to trademark disputes and trade secret misappropriation. IP law is a crucial factor in the advancement and application of AI, and both business owners and individuals must acknowledge and comprehend these concerns while dealing with AI technology, which is presented hereunder.

Patent

A patent is a bundle of monopoly rights granted to the inventor or the owner of an invention, which provides such inventor with an ‘exclusive right over the invention and patent protection empowers individuals or entities to prevent others from producing, distributing, or utilizing the patented innovation for a specified duration. One of the primary issues concerning IP and AI is patent eligibility. For instance, can an AI-generated invention be patented? In India, the prevailing patent law excludes algorithms from being patented.[iii] Since algorithms are the basic building blocks of AI, AI programmes cannot be patented in India. However, the AI-based invention under the Indian patent law could be patented if such an invention is secondary to primary hardware built exclusively for the application of such AI.[iv]

In the US, only human-made inventions can be patented, meaning an invention created by AI is not patentable. The Indian Patents Act of 1970 does not provide a definitive standard for determining the level of human involvement necessary in the process of any invention through AI. However, under the current law, patent rights are granted to the first and the original inventor, who must be a “natural person.” This gap in the current patent laws in the long run could affect the inventor’s ability to protect and capitalize on their AI-based inventions. The gap in the prevailing patent laws strongly demands that to secure patent rights, AI-generated inventions meet the criteria of human-made inventions.[v]

Copyright

The legal system grants creators of literary, dramatic, musical, and artistic works, as well as producers of cinematograph films and sound recordings, the entitlement of copyright[vi]AI-generated works might raise significant issues regarding copyright ownership. AI-generated works are created through the processing of massive amounts of data that may belong to different parties, raising concerns over who owns the copyright. For example, a machine learning algorithm might be used to create an image of a superhero such as “Ironman” the copyright over the character, vesting with Marvel. This raises a question as to the applicability of copyright protection to the copyright holder or the machine learning algorithm. The Indian copyright law specifies that only a “natural person” (which includes corporations, businesses, and partnerships) can possess copyrights. The prevailing law renders it impossible for generative AI programmes to secure copyright for the images generated. A ‘natural person’ however, could secure copyright over AI-generated creative expression including but not limited to artworks, songs, and musical and lyrical composition, provided that it does not infringe the copyright protection applying to another individual or entity. It is further interesting to note that Indian Copyright law provides copyright protection to the source codes of computer programmes as “literary work”; meaning, the complex codes used to develop the AI programme could secure Copyright protection in India.[vii]

Trademark and trade secrets

A ‘trademark’ is a recognizable sign of a trade or a business. It could be any “word, phrase, symbol, design, or combination of these things that identifies the goods or services of a business.” They function as source identifiers, allowing consumers to quickly and easily recognize the goods and services of their preferred brands. As the age of AI marketing and product branding takes hold, a decline has been observed in consumers’ decision-making when it comes to online purchasing. E-commerce platforms have now begun to use AI to make product recommendations to customers based on their search behavior, demographic information, personal preferences and previous purchases. For example, the Indian eyewear retail chain “Lenskart” uses AI to scan a consumer’s face, and generate eyewear recommendations based on the shape of their face. Businesses have also started incorporating generative AI on their websites to address user/consumer queries or complaints. As AI continues advancing, brand owners have begun to worry that consumers may ultimately be deprived of choice which could in turn negatively impact their sales and brand value. There is an opposing view that the AI system might also have the option of choosing the brand at its discretion, completely disparaging a consumer’s choice. Furthermore, the influx of AI technology in businesses could also create the risk of misuse of trademarks, owing to high competition. A notable case in this context is the legal dispute of “Lush v. Amazon”[viii], in the UK.

The legal dispute arose from Amazon’s procurement of the keyword ‘Lush’ from Google via a competitive bidding mechanism. Essentially, when a user searched for the term ‘Lush’ on the Google search engine, Google redirected the user to the Amazon website based on that keyword and transferred them to the E-commerce platform. The infringement case was deemed solid due to the discovery that even upon conducting a search on Amazon’s search portal, the displayed results were akin to the ‘Lush’ brand products, albeit not the original ‘Lush’ brand. The case of infringement was established as there was a display of similar products on the Amazon website, despite the absence of any sale of ‘Lush’ products. As a result, the court expressed its opinion that Amazon had incurred liability for trademark infringement in the given situation.  Considering the extent to which AI can influence consumer preferences and behaviour, incidents of unfair trade practices may be at an increase in the near future. Further, artificially intelligent machines may inadvertently infringe another’s trademark rights, while functioning for its user. For example, digital assistants such as Apple’s Siri, Google Assistant or Amazon’s Alexa may use trademarked brand names without obtaining prior permission. All these factors make it essential to consider the various implications of AI-generated content on trademarks and branding.[ix]

A trade secret refers to a proprietary practice or process of a business that is typically not shared beyond the confines of the business. Trade secrets are also a significant issue concerning AI and IP. As AI technologies become more advanced, so do how information can be misappropriated. AI-based software can be designed to learn and replicate specific algorithms, codes, and data sets, potentially leading to trade secret misappropriation. Consequently, it is crucial to enhance the safeguarding of trade secrets and ensure that adequate protections are in place to prevent IP infringement.[x]

Challenges in the intersection of IP and AI

There are several IP issues or challenges that may arise in connection while striking a balance with the AI systems. Some of these include:

  1. Ownership: The issue of IP ownership may arise in relation to the ownership of the IP rights in an AI system or the output produced by such a system. In instances where a team of employees within an organization creates an AI system, the ownership of the IP pertaining to the said system may not be unequivocally attributed to either the organizations or the employees involved.
  2. Infringement: AI programmes have the potential to unintentionally violate the IP rights of third parties. In instances where an AI system produces music or artwork, there is a possibility that the generated content may bear a resemblance to pre-existing works, thereby resulting in accusations of copyright violation.
  3. Validity: The validity of IP in content generated by AI is a debatable subject. There is still a persisting ambiguity in the prevailing laws regarding the validity of a patent on an AI system and the eligibility of AI-generated content for protection under copyright law.
  4. Licensing: There exists a possibility, that businesses may face IP licensing complications when it comes to AI systems. There could be disputes over the terms of a licence agreement or confusion about how to licence an AI system or the content it generates.
  5. Misuse of IP: Potential issues pertaining to the misuse of IP within AI systems can arise at any point.For instance, if an AI system is employed for conducting trademark searches, concerns may arise regarding the potential confusion between said trademarks and pre-existing ones. Furthermore, conducting such AI based search may potentially prompt intentional efforts to obtain trademark registration from unscrupulous and/or deceitful entrepreneurs for marks that are confusingly similar to pre-existing trademarks. with an intention to unlawfully encash upon the goodwill and reputation enjoyed by such pre-existing trademarks, or dilute its consumer base.
  6. Non-obvious inventions: AI has the potential to produce non-obvious inventions that could be eligible for patent protection. However, assessing the patentability of said inventions can prove to be a daunting task, as they result from machine-learning algorithms, which may not be easily understood by a skilled person from the industry.
  7. Publication and misuse of trade secrets: AI-based software can deliberately be designed to learn and replicate specific algorithms, codes, and data sets, potentially leading to the misappropriation of information and leakage of trade secrets.

Remodelling of IP laws

The dynamic progress of AI continues to affect everything that surrounds us, the IP industry being no exception. Thus, there is a constant need to explore and revamp the basic structure of all the existing IP laws, so that they do not turn into mere repositories of easily exploitable loopholes, incapable of providing either protection or exclusive rights over AI-generated IPs to their holders. IP laws may need to be changed or amended, to explicitly include and recognize AI-generated concepts. Further, amendments need to be made in current IP Laws to include provisions specifically dealing with AI rights and infringement matters and, adjudicators must be adequately educated in the field of AI, to deliver accurate decisions in such disputes.

Since AI operates on the web, which means it will be open for global access and use, it is anticipated that a common strategy will be universally implemented by IP offices to effectively address the challenges presented by AI-generated inventions.

The intersection of IP and AI is a complex and rapidly evolving area of law that contains many opportunities while posing significant challenges. IP law plays a pivotal role in the advancement and use of AI, and both businesses and individuals must remain mindful of these concerns when engaging with AI technology. Through understanding the significance of IP laws in the realm of AI, companies and individuals can protect their wealth, promote innovative thinking, and guarantee that the use of AI is equitable and conscientious. Business entities that use AI in their products or services must be aware of the challenges surrounding such a business and develop strategies to protect their IP rights.

However, no definite recommendations can currently be provided regarding restructuring IP laws to effectively integrate the swiftly evolving field of AI, particularly within the Indian legal framework. Policymakers, lawyers, and stakeholders must collaborate to create legal frameworks that promote the development and deployment of AI technologies while ensuring that IP rights are protected. It is essential to address these issues with the utmost caution and care to avoid potential harm and ensure that the full potential of AI can be realized while safeguarding IP rights.

—Sunaina Nassa is a final year LLB student of Amity Law School,
Amity University, Noida

Footnotes

[i] “Artificial Intelligence Market Size, Share & Trends Analysis Report By Solution, By Technology (Deep Learning, Machine Learning), By End-use, By Region, And Segment Forecasts, 2023 – 2030:” https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-ai-market

[ii] Derclaye, E. “Copyright for Artificial Intelligence: The Role of IP in Training AI.” Queen Mary Journal of Intellectual Property, 9(1), 4-23. (2019).

[iii] Section 3(k), the Indian Patents Act, 1970

[iv] Singh, S. P., & Chauhan, P. “Intellectual Property Rights in Artificial Intelligence: Issues and Challenges.” IJLD, 5(2), 78-92. (2019).

[v] Sandvik, K. B. “Artificial Intelligence and Intellectual Property Rights: A Potentially Uneasy Relationship.” QMJIP, 10(2), 212-230. (2020).

[vi] A Handbook of Copyright Law: https://copyright.gov.in/documents/handbook.html

[vii] Scholz, A., & Weel, A. “Intellectual Property Rights for Artificial Intelligence: A Comparative Analysis,” SSRN Electronic Journal. (2019).

[viii] Cosmetic Warriors and Lush v Amazon.co.uk and Amazon EU, [2014] EWHC 181 (Ch).

[ix] Kumar, S. “Intellectual Property Protection for Artificial Intelligence: Challenges and Opportunities.” Journal of Intellectual Property Rights, 25(3), 211-220. (2020).

[x] Suthersanen, U. “Artificial Intelligence and Intellectual Property: An Analysis from the Perspective of Developing Countries.” The WIPO Journal, 9(1), 43-58. (2018).

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