TikTok ban or sale imminent, Copyright Office AI guidance, $75B creator economy revenues by 2024, SVB and creators, More AI + less ethics, and more!
Franklin Graves
Shaping the legal landscape of the creator economy, emerging technologies, and IP, data, & privacy 🚀
This is Creator Economy Law, a newsletter dedicated to exploring and analyzing the legal issues surrounding the creator economy, creators, and internet platforms. If you enjoy what you’re reading, share with friends, and invite them to subscribe using the button above and share using #CreatorEconomyLaw.
Hank Green joined CNN's Dr. Sanjay Gupta for the podcast Chasing Life and discussed some of his thoughts on the future of the internet. I encourage you to check it out!
Here’s what’s been happening in the world of Creator Economy Law.
US Copyright Office (kinda) provides guidance on generative AI works
The U.S. Copyright Office is set to publish its guidance on artificial intelligence generative works later today, Thursday, when this newsletter is published. I've reviewed the unpublished version of the document and provided a brief overview below. I'm definitely left feeling like I want more, but it's a start. Check out the Federal Register for a fully published version.
🔥 The USCO specifically calls out the use of "vast quantities of preexisting human-authored works" to train AI models. I expect we'll continue unpacking this particular point both in the courts and in regulations and policy.
🔥 The USCO sees three questions: (1) is the output copyrightable; (2) are generative works with human authorship elements eligible for registration; and (3) what information should be disclosed to the USCO when registering.
🔥 The USCO is already receiving registration applications that take a wide range of approaches to disclosing, or not disclosing, the degree of AI-generated material.
🔥 A notice of inquiry (NOI) is coming from the USCO that will explore "legal and policy topics, including how the law should apply to the use of copyrighted works in AI training and the resulting treatment of outputs."
Here is a breakdown of the guidance:
1️⃣ Human authorship requirement
2️⃣ "If a work’s traditional elements of authorship were produced by a machine, the work lacks human authorship and the Office will not register it." They add, "what matters is the extent to which the human had creative control over the work’s expression and “actually formed” the traditional elements of authorship."
The USCO will examine works containing AI-generated materials on a case-by-case basis, noting that: "In the case of works containing AI-generated material, the Office will consider whether the AI contributions are the result of “mechanical reproduction” or instead of an author’s 'own original mental conception, to which [the author] gave visible form.' The answer will depend on the circumstances, particularly how the AI tool operates and how it was used to create the final work."
The USCO specifically calls out text-to-X generative tools as lacking sufficient human authorship. However, they note that such outputs can be selected and arranged in a sufficiently creative way (a clear nod to Kristina Kashtanova's Zarya of the Dawn).
3️⃣ Applicants have a duty to disclose AI-generated content that is contained within a work submitted for registration. They also note, "AI-generated content that is more than de minimis should be explicitly excluded from the application." This can be done using the "Limitation of Claim" section. If an applicant is confused, just disclose as a general statement, and the USCO will contact the applicant.
4️⃣ Previously registered works need to be updated. Contact the USCO's Public Information Office and work on a supplemental registration. Otherwise, a registration may be canceled if later found to contain AI-generated materials not previously disclosed.
The Impact of Silicon Valley Bank on the Creator Economy
I’m not going to attempt at breaking down what happened over the course of late last week, this past weekend, and the beginning of this week. Instead, I would point you to Vox’s insightful article that answers 9 questions about the collapse of Silicon Valley Bank (SVB), the closing of Silvergate, and the impact on First Republic and many others. It seems like the long-term impact still remains to be seen.
“The more creeping and insidious problem here is the following, and that is not a run on the banks, but a slow run towards monopoly power. [I]magine it plays out as it is supposed to play out right now: it goes into receivership. You get some, but not all of your money, and you have to wait for the rest — $.60, $.70, $.90 on the dollar. What VC is going to invest in any company without a condition that says you have to put all proceeds into 1 of 5 banks that have over $2 trillion in assets? What niche regional bank survives when this type of black swan event can take out what is arguably the strongest niche bank in America? When that happens, you have higher fees. You have a less robust banking system. I think right now they’re in a war room — all the smart people at the Fed, the banking regulators — and going this clears out 2/3 of American banks slowly but surely.“
The above quote is by Scott Galloway from the Pivot podcast, link below, starting at the 13:00 min mark.
📖 Read:
📺 Watch:
🎧 Listen:
Citi Report Estimates $75 billion in revenues for creator economy by 2024
Citi GPS: Global Perspectives & Solutions released a detailed and wide-sweeping 54-page report on the creator economy. The report offers a deep-dive exploring three key areas: the economics of the creator economy; opportunities within decentralized technologies; and the impact that artificial intelligence may have on the ecosystem.
📖 Read: “The Creator Economy - Getting Creative and Growing” via Citi Global Perspectives & Solutions (where you can also download a copy of the report.
Pokémon Fan Creators Are Getting Taken Down
Pokémon fans are getting upset following alleged copyright takedown requests that have been sent to numerous YouTube channels that operate within the Pokémon fandom. It has even led to the shutdown of user Pokeferlax's channel, which has over 120k subscribers, while also sending a chilling effect to others. The YouTubers are saying that the copyright claims are coming from Shogakukan-Shueisha Productions Co., Ltd., or “ShoPro,” one of the production companies behind the anime television series.
As explained by Corey "Crasher" Chase, the channel owners create content engaging with the IP, such as diving into updates, commentary, and discussions. The videos often will incorporate still images from the television show and related media, toys, and games. However, the creators argue such activity should be covered by a fair use defense and not be considered copyright infringement.
YouTube responded on Twitter indicating that they were looking into the issue. But, as of this week, Pokeferlax's channel has still not been restored. I haven't seen any response from ShoPro.
AI News (to boost stock price?)
Microsoft has reportedly laid off what was left of its Ethics and Society team overseeing its AI development. The group had apparently been concerned with the broader impact of offering so many generative AI tools, and the impact such tools would have on creators. See coverage from TechCrunch, too. I don't want to be quick to jump to conclusions here, but the optics don't look great. Hopefully, we'll start to get some clarity around all of this soon.
OpenAI announced GPT-4, which they tout as their “most advanced system, producing safer and more useful responses.” The update is baked into ChatGPT already and the company is offering an API. GPT-4 can also accept image inputs to expand the ways in which users can engage with the technology. They also shared that “GPT-4 is 82% less likely to respond to requests for disallowed content and 40% more likely to produce factual responses than GPT-3.5 on our internal evaluations.”
Google announced PaLM API, which it bills as “a simple entry point for Google’s large language models, which can be used for a variety of applications,” and MakerStudio, “a tool that lets developers start prototyping quickly and easily.” The company also announced more robust AI-powered tools within Gmail and Docs.
Snapchat rolled out an AI chatbot. It hasn't been going so well. Geoffrey A. Fowler wrote a piece in the Washington Post that explores some of the issues he encountered when he used the tool as a 15-year-old. Meanwhile, the company just announced Content Controls for its Family Center parental controls dashboard, including that previously mentioned “My AI” feature. The tool will “allow parents to limit the type of content their teens can watch on Snapchat.” Snap also made its Content Guidelines publicly accessible. They were previously only available to media partners and Snap Stars.
The Authors Guild published an update to its freely-available template contracts for authors and agents that now includes a new model clause that prohibits the use of an author’s work for training AI technologies without the author’s express permission. “The clause is a response to recent concerns about publishers and platforms adding language to their terms that allows them to data mine books for use in training AI models that will inevitably compete with human-authored works.“ Here's the sample clause:
No Generative AI Training Use. For avoidance of doubt, Author reserves the rights, and [Publisher/Platform] has no rights to, reproduce and/or otherwise use the Work in any manner for purposes of training artificial intelligence technologies to generate text, including without limitation, technologies that are capable of generating works in the same style or genre as the Work, unless [Publisher/Platform] obtains Author’s specific and express permission to do so. Nor does [Publisher/Platform] have the right to sublicense others to reproduce and/or otherwise use the Work in any manner for purposes of training artificial intelligence technologies to generate text without Author’s specific and express permission.
Twitter partnerships still matter, especially for creator economy and traditional sports, media, and entertainment firms. Last week, Axios reported that Endeavor invested in Elon’s Twitter 2.0 back in January. It’s worth noting that the article mentions this is an immaterial investment for Endeavor.
Buzzfeed breaks down a new report by the Alliance to Counter Crime Online that concludes “scant efforts by Twitter to remove violating content and block accounts of high-profile Mexican cartel members appear to have declined further since Elon Musk took over the company and dismantled the platform’s safety team.” The report also concludes that “High-profile Mexican cartel members, many of whom have tens of thousands of followers, also appear to have increased their activity on Twitter.”
$42,000 per month for access to its API? Sounds insane, but that’s what WIRED reports as the starting price and it only gets more expensive from there. This could have major ripple effects on the third-party app and service developers, and the creators and brands that use them. Check out more of the details and pricing structures over at WIRED.
In a boost to algorithm transparency, Twitter will soon allow users to see why a tweet is being shown in their feed, according to SocialMediaToday.
Meta
Mark Zuckerberg emailed staff, and subsequently posted the communication on the Meta newsroom site, on Tuesday to share the news that more layoffs were on the way: recruiting teams starting on Wednesday, tech groups in April, and business groups in May. They also won't fill 5,000 open positions. Zuckerberg writes, “Higher interest rates lead to the economy running leaner, more geopolitical instability leads to more volatility, and increased regulation leads to slower growth and increased costs of innovation.” He also points towards the advantages of a leaner organization with a flatter organization sans middle management.
Platformer reports on an exclusive interview with Meta via email: “We’re exploring a standalone decentralized social network
Recommended by LinkedIn
Meanwhile, they announced a plan to deprecate support for NFTs, in a move that adds to the ongoing trouble the NFT ecosystem and cryptocurrency worlds have been facing in recent months.
How much did Zuckerberg know about the harmful impact of social media addiction? “These affect everyone, especially Youth and Creators; if not addressed, these will follow us into the Metaverse.” New court documents, reported on by Bloomberg, show that the company’s leader personally knew and was briefed on the potential impact and harm.
The Oversight Board announced: two new cases for consideration, one related to Brazil’s elections, the other to content containing the testimony of a survivor of gender-based violence, as well as a policy advisory opinion on Meta’s moderation of the Arabic word “shaheed”. It also published a decision in the “Sri Lanka pharmaceuticals” case, in which the Board upholds Meta’s decision to allow content asking for donations of pharmaceuticals during the country’s financial crisis. Finally, the Board announced the appointment of a new Trustee, senior technology executive Marie Wieck.
Creators are feeling the loss following Meta’s closure of its Reels Play bonus program. Buzzfeed’s Kelsey Weekman reports on the impact the revenue loss is expected to have on creators. It's yet another reminder (as there seem to be many these days) for creators to expand across multiple platforms, including ones on which they can maintain control and "ownership" over their community.
A Dutch court concluded that Facebook Ireland “violated by processing personal data of Dutch Facebook users for advertising purposes without such processing being able to be based on a legal processing basis”. If you can read Dutch, or want to use a translation tool, read the full decision here. Otherwise, TechCrunch has more coverage.
TikTok
A TikTok ban or sale seems more imminent than ever before. The Wall Street Journal reports that the Biden administration is leaving the ByteDance with no other option but to sell or become subject to a ban in the U.S. Separately, Bloomberg reported via its sources that ByteDance is exploring the potential divestiture of TikTok's U.S. operations as a last resort option and to avoid closure or a sale if things don't go well with their new proposed solutions to address national security concerns. Bloomberg also reports that G42, an AI tech firm based in Abu Dhabi controlled by Sheikh Tahnoon bin Zayed Al Nahyan, invested over $100 million in ByteDance off a total valuation of $220 billion.
According to SkyNews, "UK Security minister Tom Tugendhat has asked the National Cyber Security Centre (NCSC) to look into TikTok," including a potential ban following sweeping bans across the EU, U.S., and Canada. Meanwhile, in the U.S., TikTok has hired a prominent communications consulting firm SKDK, which also has close ties to the Biden administration, as POLITICO reports.
Ahead of a congressional hearing on March 23, TikTok's CEO Shou Zi Chew is reportedly meeting in private with members of Congress, according to Alexandra S. Levine in Forbes.
The question remains... will TikTok users care about the privacy and security concerns and simply find a workaround, or will they readily transition to competing platforms?
TikTok won at a jury trial in a trademark dispute over the “STITCH” mark in connection with video editing features on its service. The dispute came about because of a UK-based video editing company Stitch Editing Ltd.
TikTok is now trying to take on Google (and is it even fair to say Microsoft?) in the search game. A TikTok rep told Search Engine Land, “We are in the very early stages of testing search ads in select regions.”
At SXSW, a TikTok executive shared about the company's overriding of its algorithm to boost content, including the World Cup and when Taylor Swift joined the platform. “This boosting applies to a very small percentage of videos and is subject to our business rules that are transparent inside the company,” Jeff Louisma, head of cyber and data defense for TikTok’s US Data Security division shared, according to Business Insider.
YouTube
Thinking about suing YouTube? Think about it carefully, as a YouTuber Marshall “Young Pharaoh” Daniels recently learned following defeat in the claims they brought against the platform for alleged shadow banning and demonization of their account for MAGA-friendly content. However, not only did Daniels lose their argument, but they’re now on the hook for YouTube’s attorneys’ fees. 😬🤑 Eric Goldman has more.
The High Court of Justices in the UK has issued a permanent injunction in an effort to prevent an individual from continuing to file copyright complaints against a rival YouTube channel. TorrentFreak has more.
Yoshikazu Higashitani, a former YouTuber, GaaSyy, turned Japanese politician, has been expelled from the upper parliament for failing to ever show up for work after being elected in July 2022. NBC News reports that he had been living in the UAE and never returned to Japan over the fear of being detained in connection with the defamation issues surrounding the gossip-style content on the now-terminated YouTube channel.
Other News
Attorney Rob Freund broke the story over on Twitter about a new lawsuit filed in California court by Sway Fitness against several of the stars of the Sway House, one of the early TikTok houses that has since shut down. The lawsuit claims the influencers failed to create and post content, as allegedly required under the terms of their contract, and promoted other brands. Freund notes from the filing Sway Fitness is alleging these actions “caused more than $500,000 in damages, including $390,000 of product that [vitamin and supplements retailer] GNC ordered but could not sell.” Read the complaint.
Rhett & Link’s Mythical Entertainment is joining the 24/7 streaming channel craze on Roku. On Tuesday, the company launched Mythical 24/7 as a free, ad-supported streaming TV, or FAST, channel. Read more about the news over at Variety. Stream the channel live right now.
This week, the San Mateo County Board of Education, Marion County, Oregon School District No. 24J, and Bucks County (and Commonwealth of Pennsylvania), join the growing list of school districts filing lawsuits against YouTube/Google/Alphabet, Snap, and TikTok. For some reason, the San Mateo County one excludes Meta as a party, but still references the same studies and findings stemming from Meta's platforms. Access the docket and complaint over on Court Listener for Bucks County, San Mateo County, and Marion County, Oregon.
Brands and creators should keep an eye on the still ongoing issues Adidas is facing following the fallout with Kanye “Ye” West. As Bloomberg reported, Adidas noted it only has a 15%-30% chance of selling off products. However, the dispute will last a while longer as Adidas’s annual report indicated that it is pursuing arbitration against Ye and seeking damages.
In your 20s? Male? No Lambo? You're not doing it right, at least according to so-called YouTube hustle gurus that aim to sell a lifestyle and business model to their viewers; but also, actually sell you their online course so you can achieve the same. Rebecca Jennings breaks it all down over at Vox.
Flipboard announced its Flipboard Creator Collective, offering “nearly $200K in value every month to creator initiatives.”
Kajabi announced that creators on its platform have reached $5 billion in total earnings, up from $1 billion in March 2020.
BuzzFeed publicly disclosed that a majority of its cash and cash equivalents were held with SVB, but it anticipated being made whole by the recent government action. The company’s ad revenue fell 27% in Q4, but it’s commerce revenue was up 76% YoY, as it invests more in short-form and newer content formats (which it notes may take time to see a return). Read more from The Hollywood Reporter.
Despite well-established copyright law, Donald Trump is reportedly moving forward with publishing a book, Letters to Trump, that includes letters from celebrities and public figures ranging from Oprah to Princess Diana. Read more on Newsweek (Apple News+).
FUGA has officially integrated AdRev, following the 2020 acquisition of FUGA by Downtown and its earlier 2019 acquisition of CDBaby and AdRev.
Is the focus surrounding UGC and Section 230 misplaced? In a new opinion piece in WIRED, Hany Farid and Brandie Nonnecke outline the case that the real threat is “apps’ negligent design choices.”
In Japan, “sushi terrorism” is trending following the arrest of an individual that appeared in a viral video in which he ate sushi from a conveyer belt and then poured soy sauce into his mouth directly from a shared bottle. The video’s uploader and another individual were also taken into custody. Is such activity criminal? Ben Dooley and Hisako Ueno offer full coverage in The New York Times.
I recently had the chance to catch a webinar from the Content Authenticity Initiative. It's a wonderful primer on digital provenance and the various open-source tools that the CAI has made publicly available.
I encourage you to watch the AI/ML Media Advocacy Summit videos, one of which I've linked above. It's a great deep dive into some important issues, discussed by some well-known creators.
We're doing Creator Economy Law... LIVE!
What's a better way to earn CLE credit than while also hanging out with some of the coolest IP, media, and technology attorneys and legal professionals in the world? Don't miss the American Bar Association's Annual IP Conference in Washington, D.C., April 12th - 14th. There is a lot more programming in addition to the Creator Economy Law panel.
AIPLA Spring Meeting 2023
Come join me in attending the American Intellectual Property Law Association (AIPLA) Spring Meeting! I'll be there joining a panel to talk #copyright and #TradeSecrets 🥳
It’s actually been a minute since I made it out to the West Coast, so I’m super excited! It’s also my first time in Seattle 👏🏻 and also my first AIPLA conference.
Let me know if you’ll be there or in the area. Would love to plan a time to meet up!
This week, I'm taking you back... way back... to an early 2000s K-pop hit from the Queen of K-pop, BoA. This is one of the first K-pop songs I can remember listening to growing up, and I just found out there's an upscaled re-release on YouTube. Check out an English translation of the lyrics.
Watch on YouTube.
If you want to dive deeper, check out the dance-heavy music video for the follow-up single, Moto, or the super fun collab with m-flo, Love Bug.
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Not Legal Advice. This newsletter is published solely for educational and entertainment value. Nothing in this newsletter should be considered legal advice. If you need legal assistance or have specific questions, you should consult a licensed attorney in your jurisdiction. I am not your attorney. Do not share any information in the comments you should keep confidential.
Personal Opinions. The opinions and thoughts shared in this newsletter are my own, and not those of my employer or any of the third parties mentioned or linked to in this newsletter. No affiliation or endorsement is implied or otherwise intended with third parties that are referenced or linked.
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