Humans Only - US Federal Court Rules that AI Cannot Own Copyright in Created Works

This blog has on many occasions discussed the difficult world that IP can be for both AI creations and inventions (e.g. more here, here and here), with the landscape looking more and more 'hostile' towards AI creations and inventorship. This hasn't, however, put a damper on many who will keep trying to push the envelope, and test the limits of IP laws across the world. Such an individual is the prolific inventor, Stephen Thaler, who has been on a crusade to enable AI to own many IP rights, having failed on many occasions along the way. His saga has since continued, with the US Federal Court being the next court to consider AI authorship this month.

The case of Stephen Thaler v Shira Perlmutter, Register of Copyrights an Director of the US Copyright Office concerned a system called "Creativity Machine", which Mr Thaler owns. Creativity Machine has, according to Mr Thaler, generated a piece of visual art of its own accord, which he then sought to register on the system's behalf. This application was rejected by the US Copyright Office for a lack of human authorship (see link above). Mr Thaler did not accept this outcome and appealed the decision, which landed on the desk of Judge Howell. 

Both parties sought summary judgment on the matter, for which Judge Howell handed down their judgment. At its core the matter concerned "whether a work generated entirely by an artificial system absent human involvement should be eligible for copyright".

Judge Howell first noted that, pursuant to the US Copyright Act 1976, copyright protection attaches immediately upon the creation of “original works of authorship fixed in any tangible medium of expression", provided those works meet certain requirements. 

The judge also noted that "copyright law has proven malleable enough to cover works created with or involving technologies developed long after traditional media of writings memorialized on paper", which gives the Act scope to broadly adapt to changing technologies and methods of creation. 

However, despite this adaptability, at its core copyright still requires human creativity, even if that creativity is "channeled through new tools or into new media". The judge determined that "[h]uman involvement in, and ultimate creative control over, the work at issue was key to the conclusion that the new type of work fell within the bounds of copyright" (referring to the decision in Burrow-Giles Lithographic Co. v Sarony). 

To really drive the point home, Judge Howell states that "[c]opyright has never stretched so far, however, as to protect works generated by new forms of technology operating absent any guiding human hand, as plaintiff urges here. Human authorship is a bedrock requirement of copyright". The important point here is that the decision requires that a human guides the creation of a work by AI systems, so an absence of human intervention can lead to the works falling outside of copyright protection. 

As has been mentioned in earlier decisions, this position is corroborated by the text in the Act itself, which notes that copyright attaches to "original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device". The fixation of the work must also be done "by or under the authority of the author". 

While the term 'author' is not defined in the Act, the judge quickly decided that the Act requires a copyrightable work to have an originator with the capacity for intellectual, creative, or artistic labour who specifically is a human. Additionally, "[t]he act of human creation—and how to best encourage human individuals to engage in that creation, and thereby promote science and the useful arts—was thus central to American copyright from its very inception".

The requirement for human authorship has also been followed and kept as copyright laws have evolved, with the Supreme Court consistently ruling that it is a crucial requirement for copyright protection (e.g. in Sarony above, Mazer v Stein and Goldstein v California). 

The courts have also consistently rejected copyright ownership by non-human authors. This has included divine beings (Urantia Found. v Kristen Maaherra), gardens (Kelley v Chicago Park District) and monkeys (Naruto v Slater). 

Judge Howell nevertheless acknowledges that in the future the courts and/or legislatures will have to grapple with "how much human input is necessary to qualify the user of an AI  system as an “author” of a generated work, the scope of the protection obtained over the resultant image, how to assess the originality of AI-generated works where the systems may have been trained on unknown pre-existing works, how copyright might best be used to incentivize creative works involving AI, and more". 

Judge Howell concluded that the US Copyright Office acted properly in denying copyright registration for a work created absent any human involvement. 

The decision is one in a long string which have denied AI authorship and inventorship, and it looks unlikely that this will change bar legislative amendments to existing copyright regimes. The current, admittedly nearly archaic legislative frameworks have not, and frankly could not have, conceived of a world where computers or AI systems could create as they do currently. This leaves legislative action as imperative, lest we want the law to forever lag behind technology. 

A Can of Copyright - US Supreme Court Rules on Fair Use in Andy Warhol's Work

From the iconic lithographic cans of Campbell's soup to the Marilyn Monroe, Andy Warhol's art is iconic and one that most (if not everyone) recognises. However, with success and notoriety comes potential legal battles, particularly if artists "take inspiration" from works of other artists. In the US the doctrine of fair use is very broad and can encompass several acts, but it's remit in relation to more direct copying as 'inspiration' has been hazy. A recent, and rare foray into the realm of the US Supreme Court was set to make matters clearer, and the awaited decision was indeed handed down earlier this Summer. 

The case of Andy Warhol Foundation for the Visual Arts Inc. v Lynn Goldsmith concerned the aforementioned iconic art of Andy Warhol, namely his lithographs of the music artist Prince. The lithographs used a picture taken by a famous photographer in her own right, Ms Goldsmith, in 1984 for Vanity Fair magazine as an "artist reference". Ms Goldsmith had licenced the picture to Vanity Fair with the strict condition that it only be used once in the magazine. Mr Warhol created 15 lithographs of Prince in total, and later his Foundation licenced one of those works to Conde Nast for a story about Prince. Ms Goldsmith subsequently informed the Foundation that they had infringed her copyright in her picture, which then lead to the Foundation suing Ms Goldmith asserting fair use. The lower courts have reached differing outcomes on the matter, which lead to the case ending up in the Supreme Court for final decision.  

The Foundation did not challenge the conclusion made by the Court of Appeal that the lithograph and the series of works created by Warhol are substantially similar. This left the question of whether Mr Warhol's use of the photograph was 'fair use'. In addition, the only factor within the assessment of fair use remained the first factor, i.e. whether "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes" weighs in Ms Goldsmith's favor or if the work would be considered 'transformative'.

The first factor specifically looks at whether, as has been firmly established in Campbell v Acuff-Rose Music Inc: "an allegedly infringing use has a further purpose or different character, which is a matter of degree, and the degree of difference must be weighed against other considerations like commercialism". This means that even though the expression may be new (as the Foundation argued), it, by itself, is not enough to deal with the first factor. 

Justice Sotomayor, handing down the majority's decision, focussed on the meaning of the first factor at issue. She noted that it "considers the reasons for, and nature of, the copier’s use of an original work", and specifically asks "whether the new work merely ‘supersede[s] the objects’ of the original creation… (‘supplanting’ the original), or instead adds something new, with a further purpose or different character". In other words, does the new work 'substitute' the other work, or is its purpose the same or highly similar to that of the original work. 

The preamble to section 107 of the US Copyright Act does give helpful guidance on what may be included in this factor, which includes, but is not limited to: "criticism, comment, news reporting, teaching… scholarship, or research". The similarly will be a degree of similarity, rather than a clear cut similarly assessment, so the Court will not restrict itself to just these categories. 

If a use has a further purpose or different character it is deemed to be 'transformative', which is, yet again, a matter of degree. However, there is a minimum threshold for transformative use, specifically that the "degree of transformation required to make “transformative” use of an original must go beyond that required to qualify as a derivative". 

To summarize a very lengthy and detailed discussion of the minutiae of the definition of the first factor, Justice Sotomayor summarized it as: "the first fair use factor considers whether the use of a copyrighted work has a further purpose or different character, which is a matter of degree, and the degree of difference must be balanced against the commercial nature of the use. If an original work and a secondary use share the same or highly similar purposes, and the secondary use is of a commercial nature, the first factor is likely to weigh against fair use, absent some other justification for copying".

Justice Sotomayor then moved on to considering whether the particular 'use' of the protected works would be an 'infringement'. 

Ms Goldsmith's pictures were used in a variety of ways: (i) to create the Vanity Fair illustration and the other Prince Series works; (ii) Vanity Fair then used the photograph when it published Warhol’s illustration in 1984; and (iii) the Foundation used the photograph when it licensed an image of Warhol’s Orange Prince to Condé Nast in 2016. However, only the latter 2016 use has been argued to be infringing. 

Typically photographs, such as Ms Goldsmith's, are used accompanying articles relating to the given celebrity or subject. As such, the use by Condé Nast and the Foundation in 2016 was substantially the same. The use was also clearly of commercial nature, as the images were licenced from the Foundation, weighing against a finding of fair use. Taken together these factors weigh against fair use absent some other justification for copying, i.e. any transformative nature of Mr Warhol's work.

Justice Sotomayor then moved on to considering whether Mr Warhol's work was transformative. As described in the Campbell decision, as mentioned above, transformative use is one that "alter[s] the first [work] with new expression, meaning, or message". Agreeing with the Court of Appeals, Justice Sotomayor noted that "any secondary work that adds a new aesthetic or new expression to its source material is necessarily transformative", however, the courts should not attempt to evaluate the artistic significance of a particular work. 

The key, in the Court's view, is what the purpose of the new, potentially transformative work, really is and if the use is distinct from the original. In this case, the licensing of the lithographic image by Condé Nast is similar to the use of the original work, namely as illustrating a magazine about Prince (although acknowledging difference between them). 

Justice Sotomayor noted that "[t]o hold otherwise would potentially authorize a range of commercial copying of photographs, to be used for purposes that are substantially the same as those of the originals". 

Despite arguments made by the Foundation, the Court rejected their argument that the Warhol lithographic was commentary on the dehumanizing nature and effects of celebrity. According to Justice Sotomayor, the commentary could not stand on its own two feet, and the commercial use of it required compelling reasons to see otherwise.  

Ultimately, the Court held against the Foundation, determining that "Goldsmith’s original photograph of Prince, and AWF’s copying use of that photograph in an image licensed to a special edition magazine devoted to Prince, share substantially the same purpose, and the use is of a commercial nature[, and]  AWF has offered no other persuasive justification for its unauthorized use of the photograph". This means that the first factor would weigh in favor of Ms Goldsmith. 

The scathing dissent by Justice Kagan highlights the contentious nature of this decision, and its potential impact on both copyright holders and artists trying to take inspiration of other works. The decision does limit the scope of artistic inspiration in the world of fair use, and potentially may have a cooling effect on art creation (though this remains to be seen). It does, however, add further weight to the copyrights held by individuals and entities, which they will undoubtedly receive with open arms. As said, the impact of the decision will be interesting to see and whether more derivative, or 'inspired' works will be litigated in the future. 

Keeping Their AI on the Ball - US Copyright Office Issues Guidance on the Copyright Protection of AI Generated Works

At this point there probably is no one on Earth that has not heard of, or even tested, various AI content generation systems, including ChatGPT, Google Bard and Midjourney. The tools are already impressive and are only slated to get better, so many legislatures and national bodies are (finally!) getting to grips with AI, its implications, and legal issues around the technology. One such aspect is whether AI generated works can, or will be protected by copyright, as the area remains firmly hazy as the law stands, including in the common law. One of the first off the blocks is the US Copyright Office which recently released guidance on the protection of AI generated works. 

The guidance, titled "Copyright Registration Guidance: Works Containing Material Generated by Artificial Intelligence" is brief and to the point, covering most of the issues to give better light on copyright protection on these emerging works.

The guidance initially starts with the basics, noting that for works to be protected by copyright they must have human authorship. The main decision in this regard is Burrow-Giles Lithographic Co. v Sarony where the US Supreme Court confirmed that  an author is “he to whom anything owes its origin; originator; maker; one who completes a work of science or literature”, which specifically can only be a human author. Subsequent decisions have confirmed the position to be the same, with precedent being clearly set in stone since 1886.

The same requirement is extended to the registration of copyright protected works by the Copyright Office, with its Compendium noting this position clearly. Any works created by AI systems are treated as the result of “mechanical reproduction” instead of an author’s “own original mental conception, to which [the author] gave visible form”, so the authorship of AI generated works will depend on the circumstances, e.g., how the AI tool operates and how it was used to create the final work. 

The Copyright Office notes that this includes simply giving the AI system a prompt and it then produces a new work, which is how most of the systems operate currently, as then the "'traditional elements of authorship' are determined and executed by the technology". What users would have to do is exercise ultimate creative control how such systems interpret any given prompts and then generate the material for them to have human authorship. 

Human authorship is possible, however, if a user "select[s] or arrange[s] AI-generated material in a sufficiently creative way that “the resulting work as a whole constitutes an original work of authorship", or if an artist modifies the works created by the AI systems to meet authorship requirements. 

The guidance is a clear sign that legislation is behind the times and legal requirements for authorship would need to be updated to reflect the new paradigm of AI generation of works and their protection in some form. The protection would still have to balance the remuneration of artists whose works are used in the training data and/or source of any derivative works, while encouraging the development of these AI systems and to remunerate them accordingly. This will be a difficult balance to strike, especially since legislatures across the world are woefully behind the development of these technologies.  

A Row Over Nothing? - UK High Court Considers Whether a Rowing Machine Can be a Work of Artistic Craftsmanship

Art can often be very subjective and, quite frankly, baffling as to why a particular piece is seen to be 'good' or not. Nevertheless, the law doesn't see things that way, and even works that are less of 'artistic merit' can, and should be protected under various IP rights, since those rights don't discern based on the artistic value of something. You don't often get novel things argued as being works of artistic craftsmanship, but a recent case in the Intellectual Property Enterprise Court had to look at whether a piece of exercise equipment could be one, and therefore protected by copyright. 

The case of WaterRower (UK) Ltd v Liking Ltd (T/A Topiom) concerned an application for strike out and/or summary judgment of a claim made by WaterRower against Liking for copyright infringement, involving a water resistance rowing machine called the WaterRower (pictured here) developed by the company of the same name. In its application Liking argued that the rowing machine is not a "work of artistic craftsmanship" within the meaning of section 4(1)(c) of the Copyright Designs and Patents Act 1988. The main focus on the application was this, as the Defendant admitted that, if copyright were to subsist in the rowing machine, Liking's copying machines will infringe that right. 

Although the case also discusses aspects of the law relating to applications for strike out/summary judgment, for the purposes of this article we will skip this as it is by no means the most interesting aspect of the case. 

Section 4 provides copyright protection for 'artistic works', which includes 'a work of artistic craftsmanship', however, the legislation doesn't provide any definition for what this would include. The UK courts have grappled with this definition before, most notably in the case of George Hensher Ltd v Restawile Upholstery (Lancs) Ltd (helpfully summarized here), which has been interpreted further in Lucasfilm Ltd v Ainsworth. 

In considering the definition of 'a work of artistic craftsmanship' Deputy High Court Judge Stone considered the five speeches given by the Law Lords in the Hensher case. 

Without delving too deep into the particular considerations raised by all of the Law Lords, Deputy High Court Judge Stone disagreed with the Defendant that the WaterRower is not a work of artistic craftsmanship. 

He noted that, as discussed in the Hensher case, "…the intention of the creator was at least relevant to whether or not a work of craftsmanship is artistic", which was also mentioned as the primary test to define a work of artistic craftsmanship. The Deputy High Court Judge also mentioned that, as shown by witness evidence, the creator of the WaterRower, John Duke, did indeed intend to create a rowing machine in which the user has "a welcoming emotional connection, as they would with a piece of art or furniture", which clearly demonstrated an intention to create a work of artistic craftsmanship. 

Despite the Defendant's assertion that the intention needs to focus on the primary intention of the creator of the work (and Mr Duke's intention was to simply create a water resistance machine and nothing else), the Deputy High Court Judge disagreed that this would be enough, by itself, to strike out the claim. He determined that "…so long as the artistic purpose was one of the creator’s purposes, it does not need to be the primary or dominant one". 

There is also evidence that could be adduced that show that the WaterRower was indeed a work of artistic craftsmanship, and, as noted by the Deputy High Court Judge, this would be a matter for a trial judge to decide on the basis of that evidence in any event. 

The Deputy High Court Judge also discussed a number of tests put forward by the Defendant on deciding what amounted to a work of artistic craftsmanship. He, however, refused to decide on which of them was the 'real' test, but nonetheless found that there were real prospects of success of meeting all of the relevant tests. He concluded that the Claimant has real prospects of success in proving that "…the WaterRower has a real artistic or aesthetic quality, beyond simply being appealing to the eye, and that the WaterRower embodies a sufficient degree of both craftsmanship and artistry, with the combination of these two things leading to the end result".

The Deputy High Court Judge then turned to consider the EU copyright law that relates to the matter. The main cases here are Cofemel — Sociedade de Vestuário SA v G-Star Raw CV and Brompton Bicycle Ltd v Chedech/Get2Get. 

In brief, in Cofemel the CJEU considered the potential preclusion of copyright protection over design works which generate a significant aesthetic effect. In its decision the CJEU set out that copyright protects works that fulfil two requirements: (i) the existence of an original object, and (ii) the expression of intellectual creation. This means that the object in question "…must express the “intellectual creation” of its author, ie, the author has made free and creative choices in creating the work". 

However, as specified in Football Dataco Ltd v Yahoo UK Ltd, if the subject matter "…has been dictated by technical considerations, rules or other constraints, which have left no room for creative freedom", it will not possess the requisite originality to be protected by copyright. 

In Brompton, the CJEU had to consider whether copyright applies to a product where its shape is at least in part necessary to obtain a technical result (in the case, a folding bike). In its decision, the CJEU agreed with the position in Football Dataco, but specified that "…in order to establish whether the product concerned falls within the scope of copyright protection… through that choice of the shape of the product, its author has expressed his creative ability in an original manner by making free and creative choices and has designed the product in such a way that it reflects his personality". They also noted that earlier patents, if any apply to have applied to the item in question, will be relevant if they clarify the intentions of creating the shape of that item. In brief, the Court summarized its position as "…that [a] product is an original work resulting from intellectual creation, in that, through that shape, its author expresses his creative ability in an original manner by making free and creative choices in such a way that that shape reflects his personality".

While the position in the UK and the EU are inconsistent, the Deputy High Court Judge nonetheless found that the Claimant would have real prospects of success even in the European context. He noted that the WaterRower: (i) is an original object; (ii) is an expression of Mr Duke’s intellectual creation; and (iii) whilst there were some technical constraints, they are not such that the idea and its expression become indissociable. 

The Deputy High Court Judge did flag that this should be a matter for Parliament of the higher courts to decide and to specify what will amount to a 'work of artistic craftsmanship' and depending on what the judge dealing with the matter decides, the case could very well be appealed to the Court of Appeal for another look. 

The case is a very interesting one and shows that even novel subject matter that one typically doesn't associate with copyright can be one that comes up in litigation. Although the case didn't provide a great deal of clarity on a definition for a work of artistic craftsmanship, it does provide some more discussion and sets the scene for a potential appeal down the line unless the matter settles (or the parties leave it at that following trial). 

Cadbury's Color Conundrum - UK High Court Considers Registration for the Color Purple for Cadbury's After Settlement with Nestle

Sometimes a specific color is really important. Nothing highlights this more than the seemingly never-ending story of Cadbury's fight to register the color purple (or more specifically, Pantone 2685C) in relation to its iconic chocolate products. The fight over the color started nearly 20 years ago in 2004, so those born in the same year can now legally buy alcohol in the UK - which really puts the time spent in perspective. Nevertheless, color marks have always been difficult to register, however, in a highly anticipated victory Cadbury have done just that, potentially putting this matter to bed once and for all.

The case of Societe des Produits Nestle SA v Cadbury UK Ltd concerned an appeal against a decision by the UKIPO Hearing Officer, in which they rejected the registration of three trademarks (specifically applications 3019362, 3025822 and 3019361). Nestle opposed all three applications on the grounds that: (i) the marks did not fulfil the requirements of a "sign" under section 1(1) of the Trade Marks Act 1994, challenged under section 3(1)(a) of the Act; and (ii) whether the marks had distinctiveness under section 3(1)(b) of the Act. The oppositions against marks '361 and '822 were successful. Cadbury then appealed the decision against those two marks to the High Court, which handed down its decision this Summer.

Justice Meade initially focused on the core cases that were argued to be central to the matter. 

The first case was CJEU decision in Libertel Groep BV v. Benelux-Merkenbureau, which set out that "a colour per se, not spatially delimited, may... have a distinctive character within [the Trade Mark Directive then in force] provided that... it may be represented graphically in a way that is clear, precise, self-contained, easily accessible, intelligible, durable and objective". The key here is that a color mark has to be represented graphically clearly for it to be distinctive, and not merely set out as e.g. 'purple' without any distinction as to the hue or use of the color in packaging or otherwise. The case also noted that "...the latter condition could not be satisfied merely by reproducing on paper the colour in question; there had to be a designation using an internationally recognised code" (such as Pantone). 

The second case was the Court of Appeal decision in the Cadbury saga itself in 2013, where the Court of Appeal saw that the mark that was being applied for registration did not meet the requirements for registration, because it was not a "sign".

Justice Meade then discussed the legislative position in the matter, namely Article 2 of the Trade Mark Directive. Article 2 requires that, for a mark to be registered as a trademark, it has to: (i) be a sign; (ii) be capable of graphical representation; (iii) be capable of distinguishing the goods or services of one undertaking from those of other undertakings. 

"I wish I had any idea who owned this color..."

The main issue at hand in the Court of Appeal decision was whether the mark was indeed a 'sign', largely focused on its description as "applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods". The latter part of the description left a lot of leeway in the application of the color, so long as it was the "predominant colour" being applied to the packaging. The Court of Appeal rejected the mark as not being a 'sign' as it couldn't be clearly graphically represented and therefore lacks "clarity, precision, self-containment, durability and objectivity".

Justice Meade then moved on to the Hearing Officer's decision. 

The Hearing Officer noted, in relation to mark '361, that although it only referred to the application to packaging of the goods without any limitation to the surface area covered, it still didn't mean the mark would be a single color with no variation and would cover the representation of the trade mark that the Court of Appeal rejected. 

Justice Meade agreed with this position and set out that the formulation of the ‘361 mark is indeed worse than what was rejected by the Court of Appeal, nothing that "[r]emoving the wording held by the Court of Appeal to let in multiple forms and to be objectionably ambiguous is cosmetic at best and does not help".

In relation to mark '822, the Hearing Officer aligned its position to that of the above '361 mark, since it does not explain the use of the color and where it will be in the packaging or advertising materials. Justice Meade, however, disagreed with the Hearing Officer. 

He determined that the mark was for the color, which can include its application on the packaging or otherwise. He also distinguished the wording "predominant" from simply the color, which does not cause the same issues. There is no need to specify a simple color mark in relation to, for example, an area of packaging, since requiring that would limit color marks significantly. 

The appeal therefore succeeded in relation to the '822 mark, but not the '361 mark. 

Justice Meade did give some parting words on the issues around the '361 mark, highlighting that it "…leaves it significantly, undesirably and unnecessarily unclear whether combination marks including purple and other colours would be within the scope of the right applied for (and in particular whether they would be identical to ‘361)". How he distinguished the '822 mark from this is through its simplicity; only covering the color purple. 

Although the case is not a huge upheaval of the world of color marks, it does give some clarity as to appropriate wording for similar marks in the future and notes the pitfalls that can befall any application drafter. The key is sufficient specificity so as to not make the mark very difficult or impossible to understand but considering the '822 mark there is clearly room for some degree of generality. If anything Cadbury will be happy that the saga might just be over now, but who knows what the future will bring. 

You Gonna Keep That? - EU General Court Considers Trademark Registrations of Dormant Brands and Bad Faith

Many brands from the distant past have fallen by the wayside or haven't been used in years or even decades, despite some still fondly remembering them. These 'dormant' brands do also present an opportunity for revival and use of the potential remaining goodwill in those brands, but what happens when an unrelated third party decides to "revive" one of these dormant brands and register it as a trademark? The answer isn't always crystal clear, but a recent decision by the EU General Court set to look at just that and whether this could amount to a bad faith registration. 

The case of Ladislav Zdút v EUIPO concerned a trademark for a figurative mark for the brand "NEHERA" (EUTM 11794112), which was applied for and registered in 2013-2014, including a number of different types of goods such as clothing and footwear. Some 5 years after registration three interveners, Ms Isabel Nehera, Mr Jean-Henri Nehera and Ms Natacha Sehnal, filed an application for a declaration of invalidity of the trademark, alleging that the registrant, Mr Zdut, had acted in bad faith when he filed the application for registration of the contested mark. This was due to the first two interveners' grandfather, Jan Nehera, having established a business using the same brand in Czechoslovakia in the 1930s and had acquired a trademark in Czechoslovakia for the same. However, the brand has not been used since the 1940s. The application was rejected at first instance by the Cancellation Division, but the decision was reversed by the Second Board of Appeal which declared the trademark invalid. Mr Zdut subsequently appealed that decision, with the matter ending up with the General Court.

Considering the law around the matter, Article 52 of the CTM Regulation sets out that an EU trademark should be declared invalid where the applicant was acting in bad faith when they filed the application for registration of that trademark. 'Bad faith' in this regard "… presupposes the presence of a dishonest state of mind or intention" so it means that the applicant "…has filed the application for registration of that mark, not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark". 

However, the subjective intentions of the applicant must still be assessed objectively considering all the factual circumstances relevant to the particular case. These circumstances can include: (i) the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought; (ii) the applicant’s intention to prevent that third party from continuing to use such a sign; and (iii) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought. 

Even Superman had no respect for historical ownership
of things

Even outside of the specific circumstances above, the General Court noted that other factors, such as the origin of the sign at issue and of its use since its creation, the commercial logic underlying the filing of the application for the trademark, the reputation of the sign at the time of the registration, and the chronology of events leading up to that filing might be very relevant. 

The General Court then turned to the actual matter at hand. It initially noted that there is currently no registration for the "NEHERA" brand in the EU, and that the earlier Czechoslovakian trademark had lapsed in the 1940s and hasn't been used since. 

Interestingly Mr Zdut had been fully aware of the existence and reputation of Jan Nehera and of the old trademark in Czechoslovakia, and even had noted that he wanted to launch the brand to ‘pay a tribute’ to the ‘great days of the Czechoslovak textile industry of the 1930s’ and in particular to Mr Jan Nehera. 

Considering the law in light of the matter, the General Court set out that "[f]ree-riding behaviour with regard to the reputation of a sign or of a name… is, in principle, only possible if that sign or that name actually and currently enjoys a certain reputation or a certain celebrity". With that in mind, the EU courts have found an intention to take unfair advantage of the surviving reputation of an earlier mark, including where that mark was no longer used or of the current celebrity of the name of a natural person, where the surviving reputation or fame was established.  

In contrast to this position, there is no usurpation of the reputation of a term claimed by a third party and, therefore, no bad faith, where that term was neither registered, used, nor renowned in the EU. 

With that in mind, the General Court noted that in the absence of surviving reputation in respect of the former Czechoslovak trademark and of current celebrity in respect of Jan Nehera’s name at the time of filing, the use of the mark wouldn't be free-riding behavior indicating bad faith. Even though Mr Zdut knew of the individual and the original trademark, it isn't sufficient to establish the existence of bad faith. 

The interveners also highlighted an intention to create a link between the name and the new brand, but the General Court saw that this wasn't in itself sufficient to support a finding that unfair advantage was taken of the reputation of the sign or of the former name. 

The General Court also focused on the lack of a current reputation in relation to the old trademark or the name. As they noted, currently both have been forgotten by the relevant public, and the applicant had made considerable efforts to build up the brand again. This was far from merely parasitically taking advantage of an existing reputation. 

The General Court also determined that it is possible, in certain specific circumstances, that reuse by a third party of a previously renowned former mark or of the name of a previously famous person may give a false impression of continuity or of inheritance with that former mark or with that person. This can happen where the applicant presents itself to the relevant public as the legal or economic successor of the holder of the former mark, when there is no continuity or inheritance relationship. That could then be considered in establishing bad faith. However, no such intention was found in relation to Mr Zdut. 

In summary, the General Court found that the concept of bad faith presupposes the presence of a dishonest state of mind or intention, which they were unable to find in the present matter, and overturned the Board of Appeal's decision. 

The case is an important reminder for any brand owners (even historical ones), or their potential legatees, to make sure that those brands are properly registered if any use of the brand is ever even contemplated. If this isn't done it may present an opportunity for a third party to jump in and take over the brand, which could very well be fully legal and without much recourse down the line. It is possible that this matter will be appealed to the Court of Justice for an ultimate decision, but in the absence of that any dormant brands could very well be up for grabs. 

Just Can't Catch a Break - US Court of Appeals Decides That AI Cannot be an Inventor of Patents

Artificial intelligence's road to recognition as a legal entity keeps hitting obstacle after obstacle, and as things stand it looks like right's in AI created works or inventions will be questionable without proper legislative intervention. Despite the continuous stumbling blocks, it seems that some inventors are very interested in continuing the fight, so yet another important decision has been reached on AI inventorship of patents in the US. The Court of Appeals recently handed down its decision on the matter, which continues on the near never-ending line of decisions across the globe that have been discussed on this blog before many times (for example here, here and here). 

The case of Stephen Thaler v Katherine Vidal concerned the DABUS AI system, which will be very familiar to the readers of this blog by now. DABUS was created by Mr Thaler and set out to create a number of inventions, and subsequently Mr Thaler applied for patents for some of these inventions (at issue specifically applications 16/524,350 and 16/524,532). In these applications Mr Thaler listed DABUS as the sole inventor. Mr Thaler also handled all of the filing formalities for DABUS, including a number of documents setting out why it is the inventor of the inventions. The USPTO rejected both applications due to them lacking a valid inventor and therefore being incomplete. The District Court, on appeal, found that "an 'inventor' under the Patent Act must be an 'individual' and the plain meaning of 'individual' as used in the statute is a natural person", and Mr Thaler therefore appealed to the Court of Appeals. 

Justice Stark noted that the sole issue in the case is whether an AI software system can be an "inventor" under the Patent Act. 

The Patent Act expressly sets out that inventors are 'individuals', which is means "the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention". The key here is the word individual, which Justice Stark highlighted to meaning "...a human being" (as decided by the Supreme Court in Mohamad v Palestinian Authority). Unless defined otherwise by statute this remains the definition, as is the case under the Patent Act. 

When not inventing, AI likes to take it easy with
a little light gardening in the evenings

Despite the wording 'whoever' being used in the Patent Act, the fact remains that these provisions are still subject to the above, i.e. that an inventor be a human being. Mr Thaler also noted that AI software programs should qualify as 'inventors' since otherwise patentability would depend on "the manner in which the invention was made". Justice Stark rejected this position, specifying that this isn't about inventorship, and also that that inventions may still be non-obvious even if they are discovered during 'routine' testing or experimentation. 

Existing precedent supports this position, with, for example, the decision in the University of Utah v Max-Planck setting out that "inventors must be natural persons and cannot be corporations or sovereigns", and in Beech Aircraft Corp v EDO Corp where it was decided that "only natural persons can be 'inventors'". Justice Stark noted that, while they deal with a different question (i.e. corporate ownership), the cases nonetheless support the position that the plain meaning of 'inventor' in the Patent Act is limited to natural persons.

Justice Stark then touched on Mr Thaler's various arguments to round out their decision. Mr Thaler had argued that inventions generated by AI should be patentable in order to encourage innovation and public disclosure. Justice Stark determined this to be purely speculative and lacking in basis under the Patent Act. Mr Thaler also argued constitutional avoidance where permitting AI programs to be inventors would support the constitutional purpose of patents "to promote the progress of science and the useful arts" and that not recognizing AI as an inventor undermines such progress, raising potential constitutional concerns that we should avoid. Justice Stark also readily rejected this position, setting out that the lack of AI inventorship would be unconstitutional, since Congress has decided to legislative limiting inventorship to human beings. 

The Court of Appeals therefore rejected Mr Thaler's appeal. 

The decision was, by no means, a surprise and continues the trajectory of rejection that AI inventorship has faced over the last several years (despite the South African CIPC registering DABUS' inventions as patents, being the only jurisdiction to do so so far). It remains to be seen whether Mr Thaler will want to try and take the matter to the Supreme Court, but it would seem unlikely to be picked up due to the sheer clarity of the matter in the US. A future involving AI inventorship would clearly require further steps from legislatures across the board, but currently there seems to be very little appetite to do so.