Generative AI and Patent Eligibility Cases Take Stage This Year

The “Wizard of Oz” was praised for its revolutionary use of Technicolor when it was released in 1939, though color movies had been around for more than a decade. Larry Ellison proclaimed “the internet changes everything” in 1999, although the internet had arguably existed in some form for decades by that point.

And although there have been longstanding efforts to develop machine learning and artificial intelligence, generative AI is now changing everything dramatically and quickly.

As a result, federal courts’ dockets are filling up this year with a flurry of complaints alleging copyright infringement by those that train and distribute foundational generative AI models. Targets of such lawsuits include Stability AI and Meta Platforms Inc.

The few district court judges to weigh in preliminarily on these issues expressed skepticism about claims that the output of generative AI models can be deemed “derivative works,” but claims of direct infringement during the training process have been permitted to proceed.

Meanwhile, as courts grapple with copyright infringement claims, all three branches of government are getting involved in debates over whether and to what extent outputs of AI models are eligible for intellectual property protection. The Copyright Office and Patent Office maintain that AI models are neither authors nor inventors.

But that doesn’t mean the debate is over. Specifically, to the extent AI outputs are ever viewed as including expressive content, strong disagreement remains over who or what entity should receive credit for that expression—the one requesting the output or developing and training the model.

To the extent AI is used in the inventive process for patentable inventions, a similar disagreement must be addressed. And beyond traditional IP rights, calls for a federal right of publicity to combat so-called AI deepfakes will most likely continue.

But even as AI changes everything (again), it isn’t the only thing on the menu this year. The US Supreme Court has already granted certiorari in two IP cases and is actively considering a third.

In Vidal v. Elster, argued in November 2023, the high court is considering whether the US Patent and Trademark Office’s denial of registration for the mark “Trump Too Small” violates the First Amendment. This is the second consecutive term in which the court is grappling with a mark that doesn’t really serve the traditional mark function of designating source or origin.

As with last term’s Bad Spaniels case, the court must again respond to First Amendment arguments in the context of trademark law. This time, however, the court has an opportunity to highlight that a denial of federal trademark rights does nothing to restrict speech.

Next up, nearly a decade after Petrella v. Metro-Goldwyn-Mayer, Inc., where the court eliminated application of the equitable doctrine of laches in copyright infringement cases, it’s set to weigh in again on the Copyright Act’s statutory damages period in Warner Chappell Music v. Nealy. This case asks the court to clarify whether a copyright owner can rely on the discovery rule to reach past the three-year damages period when there was no prior knowledge of infringement.

Finally, patent eligibility will once again stay in IP headlines as courts keep struggling with the Section 101 precedent, as the Supreme Court repeatedly denies cert petitions (most recently in CareDX v. Natera), and as patent reform efforts continue on Capitol Hill.

The Patent Eligibility Restoration Act of 2023, introduced last June by Sens. Thom Tillis (R-N.C.) and Chris Coons (D-Del.) may be pivotal. If passed, it would clarify the standard for patent eligibility and bar judicially created tests going forward.

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

Nicole M. Jantzi is partner and head of Fried Frank’s IP litigation practice.

Paul M. Schoenhard is partner in Fried Frank’s IP litigation practice.

Write for Us: Author Guidelines