Developments in Legislation and Regulation of Artificial Intelligence

European countries are swiftly establishing regulatory standards for AI, to reduce risks arising from artificial intelligence (AI) while fostering technological innovation. Spain recently unveiled the Spanish Agency for the Supervision of Artificial Intelligence (AESIA), marking the EU’s first AI regulatory body. At the same time, Germany announced a substantial AI Action Plan, with the Federal Ministry of Education and Research committing to more than 1.6 billion Euros to boost investments in AI research and skills training. Inspired by advances in the EU and the US, the UK is also progressing its AI governance initiatives.

Global Tech giants like Microsoft are also stepping up to address emerging AI concerns. Microsoft is acknowledging that while AI-powered Copilot offers new opportunities, it also gives rise to significant questions, especially regarding intellectual property infringement claims when using output from generative AI. To address these concerns, Microsoft is introducing the Copilot Copyright Commitment. This initiative aims to reassure customers about using Microsoft’s Copilot services and its generated output, ensuring that users can utilize these services without concern for copyright issues. In the event of any copyright-related challenges, Microsoft is prepared to assume the associated legal risks, underlining its commitment to addressing these concerns and ensuring the seamless operation of its AI services.

Concerns about copyright claims over AI-generated content are also at the focus of the United States Copyright Office. As generative AI’s capabilities expand to producing text, images, videos, or audio, greater concerns about copyright claims for AI-generated content are emerging. The Copyright Office is now processing applications for registering works containing AI-generated materials, and AI companies are facing infringement claims based on AI outputs and processes, highlighting the urgency to address these issues.

To tackle this, the U.S. Copyright Office has launched a comprehensive review of these matters. This effort focuses on understanding the multifaceted challenges AI systems present to existing copyright law and policy. To inform the study, the Copyright Office is actively seeking public feedback on all the issues, including the use of copyrighted works to train AI models, the required levels of transparency and disclosure, and the legal status of AI-generated outputs.

A court decision illustrating these challenges was delivered by a federal District Court in California. The court found that the Reface app, developed by NeoCortext, Inc., met the preliminary requirement for a plausible claim of infringement of the right to publicity of celebrity Kyland Young. Young, a reality TV personality, initiated a class-action lawsuit against NeoCortext, alleging unauthorized use of his animated images by the AI-driven face-swapping app to promote and enhance the sales of its paid version.

Despite NeoCortext’s attempt to dismiss the case, citing California’s anti-SLAPP statute and arguing the transformative use of Young’s images, the Court rejected the defense. The Court found that Young’s complaint properly alleges that the app used elements that maintained Young’s recognizable likeness. The court denied the company’s claim of First Amendment protection.

Click here to read the Spanish Agency for the Supervision of Artificial Intelligence announcement (In Spanish).

Click here to read Microsoft’s announcement of the new Copilot Copyright Commitment for customers.

Click here to read the United States Copyright Office’s announcement on AI.

Click here to read the court’s decision on the motion to dismiss, in Kyland Young V. Neocortext.