Author: JOLT

The EU AI Act: Pioneering Regulatory Framework for Artificial Intelligence

By Audrey Zhang Yang

Introduction

On July 12, 2024, the European Union marked a significant milestone in Artificial Intelligence (AI) regulation with the official publication of Regulation 2024/1689, commonly known as the EU AI Act, in the Official Journal of the European Union.[1] This landmark legislation, comprising 180 recitals, 113 Articles and 13 annexes, establishes a comprehensive framework for the development, deployment, and use of AI systems within the EU.[2] The Act aims to safeguard fundamental rights, ensure public safety, and promote ethical, trustworthy, and human-centric AI innovation.

This work examines the key provisions of the EU AI Act, its scope of application, the risk-based classification system, and the implementation timeline. It also explores the potential impact on various stakeholders in the AI ecosystem and considers the challenges and opportunities presented by this groundbreaking regulation.

Google’s Geofencing Stance: an Ode to Apple in 2016

By JOLT

On July 15, 2024

In Blog Posts

Google’s Geofencing Stance: an Ode to Apple in 2016

By Michael Mellon

In 2016 Apple faced off with the federal government, who had obtained an order to compel Apple to create software which would allow the Federal Bureau of Investigation (“FBI”) to unlock a cellphone used by a suspected terrorist.^[1] The software was needed because Apple had recently redesigned its operating system, making it impossible for anyone to access information stored on one of their devices.^[2] The government maintained that the All Writs Act justified the compulsion because it “empower[s] judges to order that something be done, even if the legislative body (here, Congress) hasn’t officially said that it should be.”^[3] It further relied on a test established in United States v. New York Telephone Co. concerning the same.^[4] Apple was prepared to challenge this, but the issue became moot when the United States Attorney’s Office indicated it had found another means of entry into the phone.^[5] This situation may very well have been the inspiration for Google’s recent stance related to mobile devices.

Satellite States: China and America’s National Security in Space

By JOLT

On May 18, 2024

In Blog Posts

Satellite States: China and America’s National Security in Space

By Samuel Naramore

Introduction

Over sixty years ago, in April of 1961, the Soviet Union successfully left the terrestrial safety of Earth and entered outer space (“space”) for the first time.[1] The Soviets entering space initiated the Cold War’s Space Race, prompting the U.S. to devote extraordinary amounts of resources towards developing its space capabilities––to beat the Soviets to the Moon.[2] After reaching the Moon in 1969 as part of NASA’s Apollo program, the United States (“U.S.”) claimed the position as the World’s premier space power.[3]

Since the “Space Race” of the Cold War, the U.S. has led the world in public and private expenditure in space.[4] Even though direct spending on space initiatives by the U.S. government has waned under recent presidential administrations, compared to other space-faring nations, the U.S. still invests more in its space program than any other country.[5] This expenditure since 1961 helped the U.S. establish itself as the dominant presence in space and leading the world in technological advancements––many of which American citizens increasingly rely on.[6]

Can AI-Generated Output Be Protected Under Intellectual Property Law?

By JOLT

On May 17, 2024

In Blog Posts

Can AI-Generated Output Be Protected Under Intellectual Property Law?

By Audrey Zhang Yang

Introduction

AI-generated output represents a groundbreaking integration of technology and creativity that increasingly challenges established norms in the legal world. Inevitably, it raises the question on whether law and policy on intellectual property protection should evolve and adapt to recognize this changing innovation trend. The Progress Clause of the Constitution gives Congress the power to “promote the Progress of Science…by securing for limited Times to Authors…the exclusive Right to their…Writing.”[i] Pursuant to this authorization, the Copyright Act extends copyright protection for “original works of authorship fixed in any tangible medium of expression.”[ii] The Copyright Act neither defined “authorship” not “works of authorship.”[iii] Traditionally, courts assigns authorship to individuals who create original works. However, determining authorship is more challenging in the case of artificial intelligence (AI). Some believe that since AI systems are tools programmed by humans, the programmers are entitled to authorship rights.[iv] Also, when someone instructs AI to solve a problem, that person might qualify as an investor if she formulates a problem in a manner that requires inventive skill.[v] However, laws on intellectual property, patent, and copyright were not originally passed with AI in mind. Therefore, there is no law specifically addressing AI-generated invention in any jurisdiction.

Videogame Loot Boxes: Is it Gambling or Harmless Fun?

By JOLT

On March 23, 2023

In Blog Posts

By Josh Hall

If I asked you to close your eyes and think about gambling, the first thing that would probably come to your mind is Las Vegas. You would see the bright lights of the Vegas Strip and the beautiful scenery of all the Casinos and Hotels. But what if I told you that there is a new way to gamble, and you don’t even have to leave your house. You just need to own a video game console and be playing a game such as EA Madden NFL Football, 2K NBA, Overwatch, and so many more. Once you load one of these games up, you will be able to purchase (with real money or sometimes earned in-game currency) sealed mystery boxes that reward the player with random items to be used in the game.[1] It’s like having a slot machine in your living room.

GambleAware charity has had research completed that involved compiling existing research to look at the link between loot box prizes and gambling behaviors. The research found that “of the 93% of children who play video games, up to 40% opened loot boxes”.[2] GambleAware research also stated that “many games use a “psychological nudge” to encourage people to buy loot boxes – such as the fear of missing out on limited-time items or special deals.”[3]

Research and data show that video game loot boxes are gambling or, at the least, very similar to gambling. The last time I checked, paying money, pressing a button, and getting something random in return was a slot machine, which is gambling. But some people would disagree. The question is what is being done about this new form of in-home gambling. Belgium has been one of the most aggressive about regulating loot boxes. In 2018 Belgium said that loot boxes are considered gambling and “companies must possess a license before offering gambling services; however, video game loot boxes are not a product that can be duly licensed within the existing regulatory framework.”[4] In response to the ban on loot boxes in Belgium, the Belgian Minister of Justice has stated that “enforcing the law is too difficult in practice” and “completely ‘banning’ loot boxes might not be practically achievable.”[5] Unlike Belgium, here in the United States, the laws trying to regulate the Video Games industry and their loot boxes had moved no further than a proposed bill in the Senate.[6] It might be a while before the United States gets around to regulating this new form of in-home gambling.

Regulating new technologies can be difficult because new technologies are constantly changing. By the time the law catches up with the new technology, the technology might have already changed again so that it no longer fits the regulation that was placed on it. But when it comes to video game loot boxes, something should be done as soon as possible. The last thing we want is kids developing addictions to gambling because of loot boxes in their video games.

[1] BBC, Loot boxes linked to problem gambling in new research, BBC, (Feb. 28, 2023, 10:18 PM) https://www.bbc.com/news/technology-56614281.

[2] Id.

[3] Id.

[4] Leon Y. Xiao, Loot box State of Play 2022: Regulatory and policy research developments, GamesIndustry.biz, ( Feb. 28, 2023, 10:45 PM) https://www.gamesindustry.biz/loot-box-state-of-play-2022-regulatory-and-policy-research-developments#:~:text=Companies%20must%20possess%20a%20licence,within%20the%20existing%20regulatory%20framework.

[5] Id.

[6] S.1629 – 116th Congress (2019-2020): A bill to regulate certain pay-to-win microtransactions and sales of loot boxes in interactive digital entertainment products, and for other purposes, S.1629, 116th Cong. (2019), https://www.congress.gov/bill/116th-congress/senate-bill/1629/text.

Image Source: https://www.freepik.com/free-vector/shine-old-wooden-chest-realistic-composition-transparent-background-with-vintage-coffer-sparkling-particles_7497397.htm#query=loot%20box&position=2&from_view=search&track=ais

FTC Looks to Ban Non-Compete Clauses with Newly Proposed Rule

By JOLT

On March 21, 2023

In Blog Posts

By Page Skinner

When you are going through onboarding for a new job, you may come across a non-compete clause in your employment paperwork. A non-compete clause “prevent[s] workers from working for ‘competitor’ companies during or after their current employment.”[1] There are several ways in which employers can limit employees when they agree to abide by a non-compete clause, which includes geographic restrictions, industry restrictions, and time bar restrictions.[2] While non-compete agreements are prevalent in many industries, they are especially common in the technology industry.[3] Because of this, many technology experts are weighing in on how the FTC’s proposed rule will impact the technology field if it is approved.

So, what is the FTC’s proposed rule? Under the FTC’s proposed rule, it would be illegal for an employer to: “enter into or attempt to enter into a non-compete with a worker; maintain a noncompete with a worker; or represent to a worker, under certain circumstances, that the worker is subject to a non-compete.”[4] Additionally, another notable aspect of the rule is that it would require employers to terminate any existing non-compete agreements they have in effect and give the employees who originally signed on to them notice that they are no longer in effect.[5] The FTC argues that this proposed rule would increase employee wages by nearly $300 billion per year and provide new employment opportunities to the 30 million employees who are currently under a non-compete agreement.[6] The FTC is currently seeking public comments on the rule through March 20, 2023.[7]

Proponents of non-competes for technology companies hold the position that the proposed rule could come with significant ramifications, as the non-competes are meant to protect those companies’ innovations, which are highly valuable in the technology field.[8] They argue this change could “cause harm to a company’s legitimate business interests, such as the need to protect confidential information and innovations.”[9] Further, they advise technology companies to look into how they can utilize other forms of contracts, like non-disclosure agreements, in case the proposed rule goes through so they can protect their businesses.[10] In the meantime, it is likely that technology companies will take advantage of the comment period and express their concerns with the proposed rule in an attempt to protect their interests.[11]

Opponents of non-competes focus more on the employees rather than the businesses that are issuing the agreements.[12] They state that competition for an employee’s labor is the “most fundamental bargaining power” an employee has, and non-compete agreements take that power away from employees. This taking away of power, they argue, places a chilling effect on the workers by limiting their mobility, stifling innovation, and negatively impacting wages.[13] Technology companies such as Amazon, Microsoft, and IBM have taken legal action against former employees who have breached their non-competes, which they argue further chills the employees looking to leave their current workplaces if they are confined by an agreement.[14]

While the FTC’s proposed rule to ban non-competes seems to heavily favor employees, some argue that it can also benefit employers.[15] Taking away non-compete clauses in employment contracts will make it easier for employees to leave workplaces, which means more talented and knowledgeable employees will be available on the job market.[16] Without the restriction of a non-compete, it will get rid of the red tape that employers sometimes have to work through and allow them to retain talented employees that they may not have otherwise been able to retain.[17] However, in order to see if any of these impacts will be felt by employers and employees alike, the rule will have to make it through the rulemaking process and withstand any and all legal challenges that are thrown its way.[18] For now, we will just have to wait and see what happens.

^[1] Najah A. Farley, FAQ on Non-Compete Agreements, Nat’l Employment Law Project (May, 2022), https://s27147.pcdn.co/wp-content/uploads/Fact-Sheet-FAQ-Non-Compete-Agreements-May-2022.pdf.

^[2] Id.

^[3] Mitchell Clark, The FTC wants to ban the noncompete clauses ensnaring some tech workers, The Verge (Jan. 5, 2023, 4:02 PM), https://www.theverge.com/2023/1/5/23540953/ftc-noncompete-ban-proposal.

^[4] FTC Proposes Rule to Ban Noncompete Clauses, Which Hurt Workers and Harm Competition, Fed. Trade Comm’n (Jan. 5, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-proposes-rule-ban-noncompete-clauses-which-hurt-workers-harm-competition.

^[5] Id.

^[6] Id.

^[7] Id.

^[8] Kate E. Gehl & Thomas R. Hutchinson, What the FTC’s Proposed Ban on Employee Noncompete Agreements Could Mean for the Technology Industry, Foley (Jan. 26, 2023), https://www.foley.com/en/insights/publications/2023/01/ftc-proposed-ban-employee-noncompete-tech.

^[9] Id.

^[10] Id.

^[11] Clark, supra note 3.

^[12] See Megan Rose Dickey, Tech’s non-compete agreements hurt workers and anger some lawmakers, protocol (May 13, 2021), https://www.protocol.com/policy/tech-non-compete.

^[13] Id.

^[14] See id.

^[15] Tom Spiggle, Why The FTC’s Proposed Rule Banning Non-Competes Is Good For Workers, Forbes (Feb. 14, 2023, 5:15 AM), https://www.forbes.com/sites/tomspiggle/2023/02/14/why-the-ftcs-proposed-rule-banning-non-competes-is-good-for-workers/?sh=4edf967a5fca.

^[16] See id.

^[17] See id.

^[18] Id.

Image Source: https://www.payscale.com/wp-content/uploads/2022/07/non-compete-1464×976.jpg

MetaBirkin: Digital Warhol or Trademark Infringement?

By JOLT

On February 28, 2023

In Blog Posts

By: John Vantine

On February 8th, a federal jury awarded French luxury design house, Hermès, $133,000 in damages for “trademark infringement, dilution, and cybersquatting.”[1] The verdict comes on the jury’s finding that artist, Mason Rothschild’s, “MetaBirkin” non-fungible tokens (NFTs) are not protected as free speech under the First Amendment and that they violated Hermès’ trademark rights.[2]

NFTs, digital assets with unique identifying codes, frequently take the form of artwork and have exploded in popularity and price in recent years.[3] Rothschild created 100 MetaBirkin NFTs as a “commentary on the way that society places artistic value on status symbols and high valued goods” and sold them at Miami’s Art Basel fair in 2021.[4] During trial, an expert estimated that Rothschild made $87,700 worth of Ethereum from his sales of MetaBirkin NFTs.[5]

Rothschild argued that the First Amendment protected his NFTs, in the same way it protected Andy Warhol’s Campbell’s soup can prints.[6] His legal team also relied upon the “Rogers” test, first established in Rogers v. Grimaldi.[7] In Rogers, the Second Circuit held that “artistic works” are free from trademark restrictions unless “the public interest in avoiding consumer confusion outweighs the public interest in free expression.”[8] The test stems from the confusion standard set forth in the language of the Lanham Act.[9]

Hermès contended that consumer confusion was present, as “some media outlets had incorrectly identified the MetaBirkins as being a project endorsed by Hermès.”[10] The design house also argued that Rothschild initiated consumer confusion by “creating domain names and social media handles bearing the Birkin moniker.”[11] Rothschild rebutted “that the fact that he markets and sells his art doesn’t mean that it is no longer art.”[12]

The commercial element of Rothchild’s NFTs is significant as well. NFTs “are often traded on digital markets,” which “may create the perception that [Rothschild] is selling digital assets ‘that just happen to have his art attached to [them].’”[13] However, art’s commercial nature can be difficult to pin down, as “physical artwork is also traded on a market.”[14]

While Hermès has not yet attempted to enter the NFT market, the firm’s general counsel, Nicolas Martin, feels that any possible future attempts to do so will be hampered by Rothschild’s works, “as there will always be a reference to the MetaBirkins.”[15] In fact, Hermès mentioned in a court filing that it “has its own plans for NFTs.”[16] As NFT popularity expands, Martin’s contention is not as far-fetched as it may appear. In recent years, many brands, including Louis Vuitton, Nike, Ray-Ban, and Lamborghini, have launched NFT offerings of their own.[17]

In March, The Supreme Court will hear argument in Jack Daniel’s Properties, Inc v. VIP Products LLC[18], a case which “will defined the boundaries of the Rogers test.”[19] The outcome of the case “will play a key role in any future appeals and new NFT cases.”[20]

While Rothschild’s team contended that Hermès “was improperly going after a small, independent artist with humble beginnings,” the design house raises legitimate concerns about the impact that MetaBirkin NFTs have on the security of Hermès’ intellectual property.[21] Regardless of one’s feelings about the jury’s decision here, clearly the relationship between art and trademark law is evolving, and will continue to develop, in the digital age.

[1] Blake Brittain, Hermes wins U.S. trademark trial over ‘MetaBirkin’ NFTs, Reuters (Feb. 8, 2023, 2:15 PM), https://www.reuters.com/legal/hermes-wins-us-trademark-trial-over-metabirkin-nfts-defendants-lawyer-2023-02-08/.

[2] Isaiah Poritz & Hadriana Lowenkron, Hermès Defeats MetaBirkins in the First NFT Trademark Trial (1), Bloomberg L. (Feb. 8, 2023, 1:42 PM), https://news.bloomberglaw.com/ip-law/hermes-gets-win-over-metabirkins-in-first-nft-trademark-trial.

[3] Robyn Conti & John Schmidt, What Is An NFT? Non-Fungible Tokens Explained, Forbes (Apr. 8, 2022, 8:36 AM), https://www.forbes.com/advisor/investing/cryptocurrency/nft-non-fungible-token/.

[4] Isaiah Poritz, First NFT Trademark Pits Hermès Against MetaBirkin Artist, Bloomberg L. (Jan. 27, 2023, 4:32 PM), https://news.bloomberglaw.com/ip-law/first-nft-trademark-trial-pits-hermes-against-metabirkin-artist.

[5] Poritz & Lowenkron, supra note 2.

[6] Id.

[7] Id.

[8] Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989).

[9] 15 U.S.C. § 1125.

[10] Poritz & Lowenkron, supra note 2.

[11] Poritz, supra note 4.

[12] Id.

[13] Id.

[14] Id.

[15] Poritz & Lowenkron, supra note 2.

[16] Brittain, supra note 1.

[17] Vanya Gautam, 10 Big Brands That Have Dipped Their Toes Into The NFT World, India Times (Feb. 2, 2022, 12:48 PM), https://www.indiatimes.com/worth/investment/brands-that-have-entered-nft-world-560907.html.

[18] Jack Daniel’s Properties, Inc. v. VIP Products LLC, SCOTUSblog, https://www.scotusblog.com/case-files/cases/jack-daniels-properties-inc-v-vip-products-llc-2/ (last visited Feb. 11, 2023).

[19] Poritz, supra note 4.

[20] Id.

[21] Poritz & Lowenkron, supra note 2.

Image Source: https://www.highsnobiety.com/p/hermes-metabirkin-nft/

The first exclusively online law review.

Author: JOLT

The EU AI Act: Pioneering Regulatory Framework for Artificial Intelligence

Google’s Geofencing Stance: an Ode to Apple in 2016

Google’s Geofencing Stance: an Ode to Apple in 2016

Satellite States: China and America’s National Security in Space

Satellite States: China and America’s National Security in Space

Introduction

Can AI-Generated Output Be Protected Under Intellectual Property Law?

Can AI-Generated Output Be Protected Under Intellectual Property Law?

Introduction

Videogame Loot Boxes: Is it Gambling or Harmless Fun?

FTC Looks to Ban Non-Compete Clauses with Newly Proposed Rule

MetaBirkin: Digital Warhol or Trademark Infringement?