The Impact of AI and Innovation on Copyright : Lessons Learned from Pioneering Digital Media
In the last few decades, the world has witnessed a technological revolution that has fundamentally transformed our way of life. Currently, and for the foreseeable future, at the forefront of this technological transformation is Artificial Intelligence (AI), a groundbreaking innovation that has, and will cause, substantial disruption, and unprecedented challenges and opportunities to industries and society, including computer generated content and the resulting challenges to copyright.
AI machine generated content is often based on copyrighted works, including art, music, film, and literature, however, AI can generate both substantially different derivative works from copyrighted works and original works, often in seconds or minutes. This creates copyright issues relating to how original copyrighted works will be protected and whether AI generated content is entitled to protection. In the next two years, it will be critical to explore new technologies and legislation to honor and protect the rights of content creators and also to provide for machine generated original works.
As we face the effects of AI on copyright, it is valuable to reflect on the digital media landscape of 1998 and the Digital Millennium Copyright Act (“DMCA”) that addressed the copyright challenges related to the Internet, electronic works and digital media.
As a lawyer and the founder and CEO of Emusic, the first company to sell digital music online (founded in 1995), I had a front row seat to the legal and standards battles between digital media companies and traditional media companies, including the battles between the record labels and peer-to-peer companies such as Napster, Kazaa, Limewire, and Morpheus. Emusic legally sold music and paid royalties to labels, artists, song writers and publishers, but was nonetheless often targeted by the major record labels as they fought to thwart digital distribution of music.
Whether it’s automobiles, photocopiers, video, digital media, or AI, the one constant throughout history, is that technology and innovation generally win, and traditional industries fighting to hold onto their antiquated market dominance lose. However, when traditional industries adopt new technologies, they generally see a significant increase in their market size. For example, in 1999 (the year Napster was launched), the global music industry market size was $25 billion. The music industry fought against digital music distribution from 2000 until 2011, with exception of highly restrictive licensing deals with Apple for iPod and iTunes (launched in 2003)[1], requiring severe digital rights management protections. In 2008, the major record labels (e.g., Universal, Sony BMG, Warner Luxembourg, EMI, Merlin) became shareholders in Spotify, where they received an aggregate of 18% of Spotify for the paltry sum of €8,804.40[2], and in 2011, the U.S. major record labels signed their first licensing deals with Spotify.[3] The record industry saw consistently declining revenues from $25.2 billion in 1999 to $14.8 billion in 2011.[4] After embracing digital media and its licensing deal with Spotify, the global record industry revenues climbed to $31.2 billion in 2022, where streaming services accounted for 67% of the music industry’s revenues[5] and Spotify responsible for paying $7 billion to record labels in 2021.[6]
(1) AI’s Effect on Copyright:
AI’s impact on copyright is multi-faceted, but perhaps the most profound change stems from its ability to generate original works. With AI-generated art, music, literature, and other forms of content becoming more prevalent, we encounter a perplexing question: “Who owns the copyright to these creations?” Unlike traditional human-authored works, AI-generated content blurs the lines of authorship and raises legal challenges that our existing copyright laws were not designed to address.
The AI effect also extends to copyright enforcement and infringement. AI algorithms are capable of quickly identifying and reproducing copyrighted material, leading to an upsurge in digital piracy and unauthorized use of intellectual property. This poses an enormous challenge for content creators and copyright holders, as they struggle to protect their works in an AI-driven world.
(2) Drawing Analogies to Digital Media and the DMCA:
To understand the gravity of the AI effect on copyright, we can draw parallels to the digital media landscape of 1998 and the enactment of the Digital Millennium Copyright Act (“DMCA”). At the time, the internet revolutionized the distribution of digital content, posing a threat to traditional copyright models. The DMCA, passed in 1998, sought to balance the interests of copyright holders and internet service providers while encouraging the growth of the digital economy.
Similarly, in today’s context, we must adopt a forward-looking approach towards AI and copyright. Like the DMCA, new legislation must strike a balance between safeguarding the rights of content creators and encouraging the continued development and application of AI technology. It should create a framework that fosters innovation while respecting copyright ownership.
(3) Legislation for the Future: Navigating Copyright and AI:
Over the next two years, several key legislative measures will be required to tackle the challenges posed by AI and its impact on copyright:
- Define AI Authorship: Legislation needs to clarify the copyright ownership of AI-generated works. Should it be attributed to the AI creator, the developer, or the end-user who provided the input data? Establishing clear guidelines will ensure fair recognition and compensation for original AI-generated creations.
- Safe Harbor Provisions: Just as the DMCA introduced safe harbor provisions for internet service providers, we need analogous protections for AI developers and platforms that may unknowingly host copyrighted AI-generated original or derivative content. This will encourage the responsible use of AI while holding accountable those who knowingly infringe on copyright.
- Digital Watermarking and Tracking: Implementing robust digital watermarking and tracking technologies will aid copyright holders in identifying and protecting their works from unauthorized AI reproductions and distribution.
- Fair Use and AI: Revisiting fair use provisions in light of AI-generated content will be essential. We must strike a balance between promoting transformative use and safeguarding the economic interests of content creators, particularly when AI is used to create derivative works.
- International Collaboration: Copyright laws vary globally, and AI’s impact is not confined by borders. Encouraging international collaboration to create standardized regulations will facilitate a cohesive and consistent approach to AI and copyright.
In conclusion, the advent of AI brings both opportunities and challenges for the future of humankind, including the value and protection of content and copyright. To navigate this transformation effectively, we must draw lessons from the past, as we did with the DMCA during the digital media revolution. The time is ripe for new legislation that addresses the challenges of content creators, AI authorship, copyright enforcement, and fair use in an AI-driven world. By fostering a collaborative and forward-looking approach, we can strike a harmonious balance between technological progress and the preservation of intellectual property rights, ensuring a prosperous future for content owners, creativity and innovation.
About the Author
Mark Chasan is a lawyer, internet veteran and digital media pioneer, a financial and strategic advisor, and serial entrepreneur with a public exit and two acquisitions. As the CEO of Transformative, Inc., Mark provides expertise and resources that help eco-social entrepreneurs, enterprises, non-profits, and leaders exponentiate their success and powerfully manifest their visions. Mark also focuses on fostering the Regenerative Economy, eco-social entrepreneurs, and living systems innovation to transform the way we live, work, learn, play, and consume. (See www.TransformativeCapital.com and www.MarkChasan.com).
[1] https://en.wikipedia.org/wiki/ITunes
[2] https://www.musicbusinessworldwide.com/heres-exactly-how-many-shares-the-major-labels-and-merlin-bought-in-spotify-and-what-we-think-those-stakes-are-worth-now/
[3] https://www.theguardian.com/technology/2011/jul/14/spotify-launch-us-record-labels
[4] https://www.statista.com/statistics/272305/global-revenue-of-the-music-industry/
[5] Ibid.; https://www.statista.com/chart/4713/global-recorded-music-industry-revenues/; https://www.visualcapitalist.com/music-industry-sales; https://www.zippia.com/advice/music-industry-statistics/
[6] https://www.reuters.com/article/us-spotify-ipo-timeline-idUSKCN1HA1MB; https://variety.com/2022/digital/news/spotify-7-billion-music-industry-labels-publishers-2021-1235212986/