In This Edition
- OpenAI | Do Large Language Models like OpenAI's that train their models using published books, infringe on their copyright protections?
- Trademark | Can a commonly used term or slogan can be registered as a trademark? The United States Patent and Trademark Office Trademark Trial and Appeal Board (“TTAB”) says, "No."
- Meet Bob Kenney, IP Attorney & New Member with Willcox Savage
COURT DISMISSES MOST CLAIMS IN TWO AI COPYRIGHT CASES
The U.S. District Court for the North District of California dismissed four of six claims in a pair of cases alleging that the use by OpenAI, Inc. of the plaintiffs’ books infringed the copyrights in those books. Tremblay v. OpenAI, Inc. and Silverman v. OpenAI, Inc., 2024 U.S. Dist. LEXIS 24618 (N.D. Cal. Feb. 12, 2024). The books in question include The Cabin at the End of the World by novelist Paul Tremblay and The Bedwetter by comedian Sarah Silverman.
Open AI is a Large Language Model (“LLM”)
OpenAI develops and distributes the artificial-intelligence (“AI”) software known as large language models (“LLMs”). OpenAI uses large texts, the “training dataset,” to train its LLM ChatGPT, which copies text from the training dataset and extracts “expressive information.” ChatGPT can then respond to users’ queries by simulating human reasoning to answer questions or summarize books. OpenAI copied the plaintiffs’ books and used them in its training dataset, enabling ChatGPT to generate accurate summaries of the books’ content and themes.
The Plaintiffs Represent a Class
The plaintiffs seek to represent a class of all people in the United States who own a copyright in any work used in an OpenAI training dataset. The plaintiffs asserted six causes of action against various OpenAI entities:
(1) direct copyright infringement (Count I);
(2) vicarious infringement (Count II);
(3) violation of Section 1202(b) of the Digital Millennium Copyright Act (“DMCA”) (Count III);
(4) unfair competition under Cal. Bus. & Prof. Code Section 17200 (“UCL”) (Count IV); (5) negligence (Count V); and
(6) unjust enrichment (Count VI).
The defendants moved to dismiss Counts II-VI under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.
With respect to Count II, the court noted that “[a] claim of vicarious infringement requires a threshold showing of direct infringement” (citing Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1169 (9th Cir. 2007) (other citations omitted)). The court found insufficient the plaintiffs’ allegation that “every output of the OpenAI Language Models is an infringing derivative work.” According to the court, the plaintiffs failed to explain what the ChatGPT outputs entail or to “allege that any particular output is substantially similar—or similar at all—to their books.” Thus, the court dismissed the vicarious copyright infringement claim with leave to amend.
Count III rested on Section 1202(b) of the DMCA, which provides that one cannot, without authority, (1) intentionally remove or alter any copyright management information (“CMI”), (2) distribute CMI knowing that it has been removed or altered, or (3) distribute copies of works knowing that the works’ CMI has been removed or altered. OpenAI argued that (i) the plaintiffs’ claim under Section 1202(b)(1) failed because they did not plausibly allege that OpenAI intentionally removed CMI during the training process or intended to conceal or induce infringement and (ii) their claim under Section 1202(b)(3) failed because they did not allege that the defendants distributed the copyrighted works or copies of them.
The court held that the plaintiffs made only conclusory allegations that “[b]y design, the training process does not preserve any CMI.” The court also held that the plaintiffs did not allege that the defendants distributed the plaintiffs’ books or copies of their books. Instead, the court said, they “alleged that ‘every output from the OpenAI Language Models is an infringing derivative work’ without providing any indication as to what such outputs entail—i.e., whether they are the copyrighted books or copies of the books.” The court concluded that the plaintiff’s allegations were “insufficient to support this cause of action under the DMCA” and therefore dismissed the DMCA claims with leave to amend.
Regarding Count IV, alleged unfair competition, the court noted: “A business act or practice may violate the UCL if it is either ‘unlawful,’ ‘unfair,’ or ‘fraudulent.’ Each of these three adjectives captures ‘a separate and distinct theory of liability’” (quoting Rubio v. Capital One Bank, 613 F.3d 1195, 1203 (9th Cir. 2010) (citing Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009)). The court said that although the plaintiffs alleged that the defendants engaged in “unlawful business practices” by violating the DMCA, the court had dismissed the predicate DMCA claims and thus the derivate UCL claim of unlawfulness could not survive. In addition, the court said that because the plaintiffs failed to satisfy the heightened pleading requirements for UCL fraud claims, that claim also could not survive.
With respect to the question of unfairness, the court said that “[a]ssuming the truth of Plaintiffs’ allegations—that Defendants used Plaintiffs’ copyrighted works to train their language models for commercial profit—the Court concludes that Defendants’ conduct may constitute an unfair practice.” Thus, the court held that portion of the UCL claim could proceed.
The court dealt quickly with the claims of negligence and unjust enrichment. Because the plaintiffs did not allege that the defendants owed them a legal duty, the court dismissed the negligence claim with leave to amend. And because the plaintiffs did not allege “that OpenAI unjustly obtained benefits from [the plaintiffs’] copyrighted works through fraud, mistake, coercion, or request,” the court said, that claim also failed.
Accordingly, the court granted in part and denied in part the defendants’ motions to dismiss. The court ordered that the amended complaint consolidate the claims in Tremblay and Silverman with those in the similar case of Chabon v. OpenAI, Inc., 2024 U.S. Dist. LEXIS 24618 (N.D. Cal. Feb. 12, 2024).
This decision shows that courts may not be sympathetic to “tangential” claims of copyright owners in AI cases (other than possibly unfair trade practices). It remains to be seen how sympathetic courts may be to claims of direct infringement through unauthorized reproduction of copyrighted works or possibly through other violations of the exclusive rights in copyrighted works set forth in Section 106 of the Copyright Act.
A PROPOSED MARK MUST HAVE A SOURCE IDENTIFYING FUNCTION: Trademark Denied for “KEEP AMERICA GREAT!”
In a non-precedential opinion; In re America in Harm’s Way; Serial No. 87976064, issued on November 30, 2023, the United States Patent and Trademark Office Trademark Trial and Appeal Board (“TTAB”), decided the issue of whether a commonly used term or slogan can be registered as a trademark. The proposed mark was the phrase KEEP AMERICA GREAT! in standard characters for use and registration in connection with ornamental novelty pins.
The Applicant’s Petition
The Applicant, America in Harm’s Way, filed its application on January 27, 2017. In an office action issued on August 2, 2021, the examining attorney refused registration on the grounds that the proposed mark “is a slogan or term that does not function as a trademark or service mark to indicate the source of applicant’s goods and/or services and to identify and distinguish them from others.” In support of this conclusion, the examining attorney referenced evidence from Politico, CBS News, Amazon, Etsy and CNN of the common use of the term as “the slogan for Donald Trump’s re-election campaign” and that it is “closely associated with the former president and his ideals.” Thus, the Examining Attorney contended that the phrase “has been widely used by many different sources as a political informational message to convey support for ideas espoused by Donald Trump.”
Applicant countered that (1) it had established itself to consumers as a source of the goods for which the registration is sought; (2) it is the owner of a registered mark which shares a common element with the proposed mark and therefore, the proposed mark similarly indicates a source of goods; (3) it has used the proposed mark in a manner consistent with that of the registered mark, creating familiarity with the source in the consumer population; and (4) when applicant first used the mark to indicate the source of its goods, the mark was not in common use.
Much of Applicant’s initial argument centered on its prior registration for the mark KAG, which it asserted is an acronym for KEEP AMERICA GREAT! It argued that because its lapel pins show the proposed mark KEEP AMERICA GREAT on both sides of the pins and also include the registered mark KAG on the back side of the pins, the back side would “be visible to the consumer when this consumer buys the product, but not to the viewer of the already-purchased pin, when worn by the consumer.” Therefore, it asserts, “…both “KAG!” and “KEEP AMERICA GREAT!” indicate the source of the Applicant’s (now-Registrant’s) product to the consumer, and they would perceive “KAG!” and “KEEP AMERICA GREAT!” as part of the same family of marks, since they have “common characteristics.”
As noted above, the Applicant also argued that because when it first started using the KEEP AMERICA GREAT! proposed mark, that mark was not commonly used, it was “not recognizable as a political message.”
The first of these arguments, which appear to essentially conflate points 1 through 3 into a single argument relating to the relevance of the prior registration were rejected in the subsequent Final office action because “applicant’s prior registration for the mark “KAG!” . . .is not relevant to analysis of whether or not the phrase KEEP AMERICA GREAT! is a widely used message, and thus is not persuasive.” Furthermore, “although applicant [had] placed the mark on the back of the ornamental pin, the entirely ubiquitous nature of this phrase in the media and on traditional goods for showing support (e.g. hats, pins, signs) suggests that this will be perceived as an informational phrase rather than as a source indicator.”
The Applicant’s Request for Reconsideration
Applicant filed a request for reconsideration of the Final refusal pressing the argument that, when it first conceived of and began using the KEEP AMERICA GREAT! mark in 2017, the mark was not in common use, as established by the fact that nearly all of the evidence of uses of the proposed mark cited by the examining attorney as a common political message occurred after the applicant had begun its use of the proposed mark. Applicant argued “[r]efusing registration of the mark based on the actions of subsequent would-be registrants (e.g. copycats and/or alleged infringers) and inferring a meaning for the mark in view of the actions of these third parties is prejudicial to Applicant.” It also asserted that the grounds for refusal “also give inappropriate weight to actions that occurred after Applicant applied to register the mark.”
The Applicant’s Request for Reconsideration was Denied and the Applicant Appealed
In its decision, the Board initially stated that “whatever else it may do, a trademark is not a trademark unless it identifies a product’s source (this is a Nike) and distinguishes that source from others (not any other sneaker brand); citing, Jack Daniel’s Props., Inc. v. VIP Prods., LLC 599 U.S. 140, 2023 USPQ2d 677 at *4 (2023). It further concluded that:
Here, notwithstanding Applicant’s use of the proposed mark in connection with the identified goods and its intent that the phrase function as a mark, the record reveals that consumers would not perceive KEEP AMERICA GREAT! as identifying the source of the Applicant’s ornamental novelty pins. Rather, because the phrase is used by so many vendors and other third parties, including ornamentally on many products, it does not identify any particular source or product.
In addition, the Board stated: “[a]s the Examining Attorney points out, ‘[e]legibility for registration must be determined on the basis of the facts and evidence in the record at the time registration is sought.’” Therefore, Applicant’s argument that it was the first user of the phrase, before it was commonly used by others, is irrelevant.
This decision confirms the position of the USPTO that commonly used phrases, slogans or terms cannot be registered because they do not function as source identifiers of the goods or services associated with the common phrase, slogan or term. Moreover, being the first user of the term is not relevant to the issue of registrability since the analysis focuses on the scope of use of the term at the time registration is sought, not at the time of the application.
MEET BOB KENNEY,
IP Attorney & New Member with Willcox Savage
Bob has more than 35 years of experience in intellectual property legal matters including trademark clearance, prosecution, counseling and portfolio management and patent, trademark and copyright litigation.
Bob helps clients in a broad range of fields acquire, protect and profit from their important intellectual property rights as well as teaming with clients for licensing and intellectual property acquisition. He is particularly focused on helping clients build and protect their valuable brands.
Bob is also an experienced litigator, representing clients throughout his career in federal courts across the United States as well as in the U.S. International Trade Commission (ITC). He has similarly represented numerous clients in trademark matters before the Trademark Trial and Appeal Board of the U.S. Trademark Office.
Bob is based in the firm's new Tyson's office in Northern Virginia.