White House Framework for AI Regulation to Set the Stage for Congress

President Trump has released a framework for AI regulation for Congress.  The Press Release states:

The Trump Administration is committed to winning the AI race to usher in a new era of human flourishing, economic competitiveness, and national security for the American people. Achieving these goals requires a commonsense national policy framework that both enables American industry to innovate and thrive and ensures that all Americans benefit from this technological revolution.

The Administration recognizes that some Americans feel uncertain about how this transformative technology will affect issues they care about, like their children’s wellbeing or their monthly electricity bill. These issues, along with other emerging AI policy considerations, require strong Federal leadership to ensure the public’s trust in how AI is developed and used in their daily lives.

Today, the Trump Administration is demonstrating that leadership by issuing a comprehensive national legislative framework  that addresses the most pressing policy topics that AI presents. This framework addresses six key objectives:

1. Protecting Children and Empowering Parents: Parents are best equipped to manage their children’s digital environment and upbringing. The Administration is calling on Congress to give parents tools to effectively do that, such as account controls to protect their children’s privacy and manage their device use. The Administration also believes that AI platforms likely to be accessed by minors should implement features to reduce potential sexual exploitation of children or encouragement of self-harm.
2. Safeguarding and Strengthening American Communities: AI development should strengthen American communities and small businesses through economic growth and energy dominance. The Administration believes that ratepayers should not foot the bill for data centers, and is calling on Congress to streamline permitting so that data centers can generate power on site, enhancing grid reliability. Congress should also augment Federal government ability to combat AI-enabled scams and address AI national security concerns.
3. Respecting Intellectual Property Rights and Supporting Creators: The creative works and unique identities of American innovators, creators, and publishers must be respected in the age of AI. Yet, for AI to improve it must be able to make fair use of what it learns from the world it inhabits. The Administration is proposing an approach that achieves both of these objectives, enabling AI to thrive while ensuring Americans’ creativity continues propelling our country’s greatness.
4. Preventing Censorship and Protecting Free Speech: The Federal government must defend free speech and First Amendment protections, while preventing AI systems from being used to silence or censor lawful political expression or dissent. AI cannot become a vehicle for government to dictate right and wrong-think. The Administration is proposing guardrails to ensure that AI can pursue truth and accuracy without limitation.
5. Enabling Innovation and Ensuring American AI Dominance: The Administration is  calling on Congress to take steps to remove outdated or unnecessary barriers to innovation, accelerate the deployment of AI across industry sectors, and facilitate broad access to the testing environments needed to build and deploy world-class AI systems.
6. Educating Americans and Developing an AI-Ready Workforce: The Administration wants American workers to participate in and reap the rewards of AI-driven growth, encouraging Congress to further workforce development and skills training programs, expanding opportunities across sectors and creating new jobs in an AI-powered economy.

Importantly, this framework can succeed only if it is applied uniformly across the United States. A patchwork of conflicting state laws would undermine American innovation and our ability to lead in the global AI race.

The Federal government is uniquely positioned to set a consistent national policy that enables us to win the AI race and deliver its benefits to the American people, while effectively addressing the policy challenges that accompany this transformative technology. The Administration looks forward to working with Congress in the coming months to turn this framework into legislation that the President can sign.

Fair Use and the Future Explored: Chip N' Dale: Rescue Rangers Movie

Yesterday, my kids and I watched the new movie, Chip N’ Dale:Rescue Rangers.  This is probably the funniest Intellectual Property law related movie I’ve seen.  Disney takes on IP Law doctrine and policy in a very humorous way.  As an exercise in understanding U.S. IP law, the facts the movie raises are very nice.  Here’s a few examples: ET v. Batman; Ugly Sonic; Chippendales; and on and on.  They also take on: a glimpse at the future of augmented reality; artificial intelligence and creativity; culture wars; Hollywood nostalgia reboots (talk about bootlegging); and the future of counterfeiting. There are so many references my brain almost exploded from overload. As a tip, be sure to take in the background materials, e.g., advertisements. Lol. They take some pretty nice shots at competitors, but I wonder what’s going to come back.  Interestingly, the Pirates of the Caribbean ride at Disneyland has been closed for “refurbishment.”  [In full disclosure, I am a very big fan of Disney and may be extremely biased.]

US Supreme Court will hear Google v. Oracle Copyright Suit

The United States Supreme Court has just granted review of the Google v. Oracle Copyright law suit.  This is a huge case concerning copyrightability and the scope of fair use of software.  Additional information, including briefs, can be found at the SCOTUS blog, here.  Hat tip to Dmitry Karshtedt.  

Report States Copyright Fair Use Contributes $2.8 Trillion to U.S. Economy

The Communications and Computer Industry Association has released a report that attempts to ascertain the value of fair use to the U.S. economy.  The 2017 report places the value added to the economy at $2.8 trillion dollars in 2014 with 18 million workers “benefiting from fair use.”  The 2017 report also states that $5.6 trillion dollars of revenue was generated by fair use industries.  Some examples of fair use industries include: “manufacturers of consumer devices that allow individual copying and recording; educational institutions; software developers; and Internet search and web hosting providers.”  In discussing fair use, the report states:

One of the benefits of the flexible fair use doctrine is its adaptability, which can cover unanticipated new uses and technologies. Whereas narrow exceptions drafted around specific technologies become outdated rapidly, the flexibility of the fair use doctrine has, at different times, enabled both consumer electronics and online services. The breathing space provided by fair use has facilitated  a thriving technology industry in the United States. New online products and services almost inevitably involve some transitory copying, if only for technological purposes. This makes the fair use doctrine a necessity, as licensing every time an image is copied into a computer’s memory, for example, would be prohibitively expensive and time-consuming.

Fair use has proven to be critical to other industries as well. For example, the varied industries that encompass the entertainment industry all rely on fair use. Fair use is also crucial in the context of education and reporting the news, which depend upon reproducing and disseminating primary sources. This reliance often becomes most apparent in litigation, as all of these industries have defended ordinary business conduct before courts by relying on the fair use doctrine.

In addition to being critical to a vast number of U.S. constituencies, fair use has also gained recognition abroad as a crucial information technology policy. While fair use is a principle of uniquely American origin, nearly 50 other countries have adopted some version of American fair use or its British counterpart, fair dealing, into their domestic copyright law.1 Perceiving the success that has resulted from the balances in the U.S. copyright system, many countries aspire to emulate the U.S. fair use model. This is the case even in countries with well-developed copyright systems. For example, in 2010, then-Prime Minister David Cameron announced an inquiry into adopting a fair use-type provision in UK law, in order to “encourage the sort of creative innovation that exists in America.”

It would be interesting to see if a similar analysis could be done for experimental use type exceptions to patent infringement in Europe.  

Electronic Frontier Foundation Successful in DMCA Take-Down Ninth Circuit Case But Issues Remain

The U.S. Court of Appeals for the Ninth Circuit (with jurisdiction over federal appeals in California and several other western states) issued an opinion in Lenz v. Universal Music Corporation.  The Ninth Circuit held that before submitting a Digital Millennium Copyright Act take-down notice a content holder must determine that a use was not a fair use.  The Lenz case involved a take-down notice based on a portion of a Prince song playing during a posted video of Ms. Lenz's children playing.   The Electronic Frontier Foundation, that represented Ms. Lenz with Keker and Van Nest, noted that the decision is particularly important given the upcoming Presidential election and the amount of critical content that may be subject to efforts to censure.  However, the Ninth Circuit also stated that:

To be clear, if a copyright holder ignores or neglects our unequivocal holding that it must consider fair use before sending a takedown notification, it is liable for damages under § 512(f). If, however, a copyright holder forms a subjective good faith belief the allegedly infringing material does not constitute fair use, we are in no position to dispute the copyright holder’s belief even if we would have reached the opposite conclusion. A copyright holder who pays lip service to the consideration of fair use by claiming it formed a good faith belief when there is evidence to the contrary is still subject to § 512(f) liability. . . .

In order to comply with the strictures of § 512(c)(3)(A)(v), a copyright holder’s consideration of fair use need not be searching or intensive. We follow Rossi’s guidance that formation of a subjective good faith belief does not require investigation of the allegedly infringing content. See 391 F.3d at 1003, 1005. We are mindful of the pressing crush of voluminous infringing content that copyright holders face in a digital age. But that does not excuse a failure to comply with the procedures outlined by Congress.

The Ninth Circuit went on to later hold that “willful blindness doctrine may be used to determine whether a copyright holder “knowingly materially misrepresent[ed]” that it held a “good faith belief” the offending activity was not a fair use.”  Notably, the Ninth Circuit briefly touched on the usage of software to discover potentially infringing content, but expressly declined to address the important issue:

We note, without passing judgment, that the implementation of computer algorithms appears to be a valid and good faith middle ground for processing a plethora of content while still meeting the DMCA’s requirements to somehow consider fair use. Cf. Hotfile, 2013 WL 6336286, at *47 (“The Court . . . is unaware of any decision to date that actually addressed the need for human review, and the statute does not specify how belief of infringement may be formed or what knowledge may be chargeable to the notifying entity.”). For example, consideration of fair use may be sufficient if copyright holders utilize computer programs that automatically identify for takedown notifications content where: “(1) the video track matches the video track of a copyrighted work submitted by a content owner; (2) the audio track matches the audio track of that same copyrighted work; and (3) nearly the entirety . . . is comprised of a single copyrighted work.” . . . Copyright holders could then employ individuals like Johnson to review the minimal remaining content a computer program does not cull. . . . During oral argument Universal explained that service providers now use screening algorithms. However, we need not definitively decide the issue here because Universal did not proffer any evidence that—at the time it sent the takedown notification to Lenz—it used a computer program to identify potentially infringing content.

The value of copyrights (and trademarks) rely upon cost-effective enforcement for sure.  And, the issue of automated processing of analysis of trademark and copyright infringement is an important one.  Notably, the U.S. does not have an analogous statutory take-down procedure for trademarks as well.  However, websites are known to follow the basic procedures of the Digital Millennium Copyright Act when trademark owners allege trademark infringement based on third party posting of content on a website.  Trademark owners would be wise to consider whether to follow the Lenz case before issuing a trademark take-down notice.