Digital Replica Legislation Demands Precise Contract Language

Entertainment and gaming companies intent on using digital replicas—simulations generated by artificial intelligence of a person’s vocal or visual likeness—should follow basic best practices in response to new laws that could pose significant legal risks.

The growing patchwork of state laws (such as those enacted in California, New York, and Tennessee), collective bargaining agreements, and proposed federal legislation places a heavy legal burden on anyone employing generative AI to create simulated performances of real people. The absence of caselaw providing interpretive guidance for broad terms such as “readily identifiable,” “highly realistic,” and “reasonably specific descriptions” compounds that burden.

While avoiding all use of digital replicas may be the easiest solution, it forgoes valuable opportunities to save costs and grow in the pursuit of new and exciting artistic expression.

Entertainment companies with pre-existing digital asset libraries containing artist names and performances that could be associated with a performer must review their talent contracts before reusing those assets—whether to create updated or new performances or train generative AI models. While doing so, it’s critical to ensure a few things.

Describe the new anticipated use in writing with reasonable specificity. How specific depends on industry custom and how much the new use diverges from the “fundamental character” of the original performance.

For example, does the new performance occur in a new medium or a different narrative or artistic context? Is the new use considered offensive such that the performer couldn’t or wouldn’t have consented if that use weren’t specifically identified? If so, this use may have needed to be specifically released in the talent contract.

When using work from a nonunion performer, make sure an attorney represented them in negotiating the contract that defines the use of this material. The new laws require lay performers to be protected by unions or lawyers before executing deals that affect their future income. Deal memos or term sheets from agents, managers, or other non-attorney representatives likely don’t satisfy this requirement.

When using work from a union-member performer to create a digital replica, confirm the original performance was subject to a collective bargaining agreement that governed the use of digital assets and digital replicas. Follow that agreement. If the agreement was silent on the use of digital replicas, like many video game or music talent agreements are, it’s necessary to have an individual agreement negotiated by counsel for the performer.

Absent such agreements, use of the performance to train a digital replica or generate a new performance likely will require negotiating an addendum to the license with the performer or the holder of the performer’s likeness rights. This concern is heightened for deceased performers due to the availability of statutory damages in California’s AB 1836.

Companies seeking to license digital replicas based on today’s performances should negotiate for and include language in their talent contracts that identify and release the licensee for uses including the development, deployment, and distribution of digital replicas and similar software tools. The language also should anticipate future generated performances, identifying and enumerating conceivable new projects, sequels, marketing materials, and related uses.

However, the specificity requirement in California and New York’s laws deters the use of broad, catch-all provisions and likely requires more project-specific language in the license. Because the language of the statutes leans heavily on industry custom, the right language to use in talent agreements depends on the licensee’s intended uses and industry.

Although state legislatures have made the first move, collective bargaining agreements and federal bills on digital replicas foreshadow greater regulation very soon.

The Screen Actors Guild-American Federation of Television and Radio Artists, for example, has claimed to have negotiated interim agreements with dozens of game developers, such as Replica Studios. Consistent with SAG-AFTRA’s industrywide demands, the contract requires the developer to obtain informed consent from the performer. The developer also must negotiate compensation for the performance on which the digital replica is based and each use of a digital replica in generating new performances.

Congress has yet to pass legislation on the use of digital replicas, but multiple bills were drafted and circulated last year that could pass in the next term, such as the NO FAKES Act and Preventing Abuse of Digital Replicas Act. These proposed laws track many of the same issues governed by state law, including the requirement of consent and representation for performers licensing their likeness for digital replicas, while also exempting certain fair uses on First Amendment grounds.

Entertainment companies must anticipate such changes in their current agreements if they become cemented industrywide. National rules likely will happen this year due to increased public attention and pressure, including high-profile calls to ban unauthorized digital replicas, commonly dubbed “deepfakes.”

Because laws are changing almost as rapidly as the technology, consulting an entertainment attorney is a good idea. No one-size-fits-all approach can navigate the uncertainty. Entertainment and gaming companies that use the latest technology need to consult capable counsel who monitor the latest developments for bespoke recommendations, lest they become the first test case to litigate these issues.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jesse B. Levin is partner in Glaser Weil’s litigation department, where he serves clients navigating disputes in entertainment and corporate litigation.

Chris W. Basil is an associate at Glaser Weil, with focus on complex commercial litigation in state and federal courts.

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