AI vs IP – tech breakthrough or legal powder keg?
The use of artificial intelligence (AI) is becoming more common across all sectors of the economy, from education to software development and to professional services. The utility of AI continues to increase with corresponding advances in computing technology and the availability of training data sets.
With generative AI technologies, such as ChatGPT and Midjourney, being widely accessible to the public, it is worth considering how these technologies and the works they produce fit within current legal frameworks, particularly in relation to intellectual property (IP).
Most forms of IP generally need some level of human input and novelty to qualify for legal protection. The rapid advances made in AI technology will require IP laws to adapt to the new paradigm and tensions within the current legal framework can already be felt.
In this edition, we explore AI technology, its impact on IP law, in particular to copyright and patents, and its relevance to government.
What is AI?
AI is generally accepted to refer to the discipline of computer science aimed at creating systems that were traditionally considered to require human intuition. More recent AI technologies are able to mimic human cognition and perform tasks including voice, text and image creation and recognition. Generative AI technologies have advanced to the point where their output can be difficult to distinguish from that of humans. For example, ChatGPT was able to pass the bar exam at the Minnesota University Law School.
AI systems are also developing the ability to demonstrate ingenuity in various fields, with corporate research firm Gartner predicting that more than 30 per cent of new drugs and materials will be created using generative AI by 2025.
Copyright
Copyright is a bundle of rights held by the creators of works and other forms of content which generally prevents the reproduction or communication of the work without the owner's consent. For literary, dramatic, musical or artistic works, copyright will only subsist where originality requirements are met. In the High Court case IceTV Pty Ltd v Nine Network Ltd (2009) 239 CLR 458, it was found that an author of a work must have exercised real control over the form or expression, meaning some independent intellectual effort is necessary. For example, source code automatically generated by a computer program has been found to lack the requisite originality (Acohs Pty Ltd v Ucorp Pty Ltd (2012) 201 FCR 173).
In Telstra Corporation Ltd v Phone Directories Company Pty Ltd (2010) 194 FCR 142, the Full Federal Court found that computer-generated telephone directories lacked the necessary human input. The Full Federal Court found that even though the software used to create the phone directories required human input, the employees involved in creating the directories merely controlled an automated process and did not direct the material form of the directories themselves.
Internationally, in 2022 the United States Copyright Review Board affirmed an earlier decision of the Copyright Office that an AI-generated artwork created without any meaningful human input lacked the human expression needed for protection under US copyright law. In contrast, UK copyright legislation explicitly protects works generated by a computer where there is no human author (see section 178 of the Copyright, Designs and Patents Act 1988 (UK)).
Although there has yet to be any judicial consideration in Australia of whether works created by generative AI systems can satisfy originality requirements, such works will likely lack the required degree of human ingenuity needed for copyright protection under copyright law. However, it is likely that legislative reform will be needed in future as generative AI becomes increasingly commonplace.
Patents
Patents are a form of registered IP that protects innovations and inventions for a limited period of time. A patent will only be registered if it meets the threshold level of novelty and it involves an 'inventive step'.
It is also a requirement, under Patents Regulation 1991 (Cth) r 3.2C(2)(aa), that an inventor is named in the patent application. Recent case law has reaffirmed the Australian position that an inventor must be a natural person. In Thaler v Commissioner of Patents [2021] FCA 879, it was found by Justice Beach that an AI system could be an inventor for the purposes of the Patents Act 1990 (Cth). Justice Beach noted that the Act does not define the term 'inventor' nor explicitly prohibits an AI system from being named as an inventor.
On appeal, it was found unanimously by the Full Federal Court that the grant of a patent requires an invention arising from the mind of a natural person. Accordingly, the Deputy Commissioner was correct in rejecting Dr Thaler's application. The Full Court noted that Dr Thaler likely intended to provoke debate about the patentability of inventions created by AI, but that it would not be appropriate for the Court to consider such a change in policy under current legislation. Dr Thaler's application for special leave to appeal the Full Federal Court's decision to the High Court was refused and the Full Federal Court's decision remains good law in Australia.
Relevance to government
The Commonwealth Government has identified AI as a critical technology in the national interest and created a National Artificial Intelligence Centre which is responsible for the 'Responsible AI Network'. Australia is also a member of the Global Partnership on Artificial Intelligence. The NSW Government has publicly embraced the use of AI in government and has created a NSW AI Advisory Committee, AI Policy and Assurance Framework and an Artificial Intelligence Strategy.
Australian governments have clearly considered the applications of AI technology and its potential uses in delivering services, storing public data and in assisting innovation within industry. It is prudent for government bodies to consider the application of IP law to AI technology and its public sector use cases. For example, the NSW Government has identified that AI may be used in procurement and in proofs of concept. Government agencies should be aware that such AI-generated outputs may be insufficiently protected by IP law and that policy or legislative developments in this space should be monitored.
In practice and courts
AAT Bulletin Issue No.7/2023
The AAT Bulletin is a fortnightly publication containing
information about recently published decisions and appeals against
decisions in the AAT's General, Freedom of Information,
National Disability Insurance Scheme, Security, Small Business
Taxation, Taxation & Commercial and Veterans' Appeals
Divisions (11 April 2023). Read more
here.
Publications – articles, papers and reports
NSW government delays budget after uncovering $7.1bn in
fresh 'financial pressures'
The Minns government says it has uncovered more than
$7.1bn in fresh "financial pressures" since taking office
last month, and will delay in the New South Wales budget three
months until September while it conducts a "line-by-line
"spending review (17 April 2023). Read more
here.
NSW reconstruction authority regulation
The NSW Reconstruction Authority is inviting public
submissions on the Regulatory Impact Statement for the NSW
Reconstruction Authority Regulation 2023. Responses are invited
until 15 May 2023. Read more
here.
Cases
Shah
Friends Pty Ltd v Cumberland Council [2023]
NSWLEC 31
APPEAL – Council issues Stop Use Order to applicant
requiring cessation of use of premises as a waste or resource
transfer station – applicant appeals against imposition of
the order – existing development consent for use of the
premises as a foundry – applicant contends that its use of
the premises for recovery of metal and other materials falls within
the use permitted by the foundry development consent –
commissioner upholds Council's characterisation as a waste or
resource transfer station – commissioner rejects
Applicant's characterisation of its use – commissioner
dismisses the appeal against the order, modifying its terms and
ordering cessation of the Applicant's use within 28 days -
applicant commences appeal pursuant to s 56A of the Land
and Environment Court Act 1979 – appeal based on five grounds
said to reflect errors of law by the Commissioner – operation
of Stop Use Order stayed until determination of the Applicant's
appeal - at hearing of the appeal, the Applicant abandons three of
the five grounds originally pleaded but seeks leave to add an
additional ground asserting a further error of law on behalf of the
Commissioner – leave to rely on proposed added ground not
opposed by the Council – leave granted – ground 1
alleges commissioner wrongly construed 1979 development consent on
too narrow a basis – commissioner committed no error in
construing 1979 development consent – ground 1 fails –
new Ground 1A alleges inaccurate delineation of geographic scope of
Stop Use Order renders it invalid - scope of Stop Use Order can
only apply to premises lawfully occupied by the Applicant –
ground 1A fails – grounds 2, 3 and 4 not pressed –
ground 5 pleads that the material processed by the applicant was
not waste – the basis of this ground not raised before the
Commissioner in the fashion advanced on appeal – Council did
not oppose determination of the ground – material processed
by the Applicant on the site not waste – ground 5 established
– appeal upheld – Stop Use Order set aside.
COSTS – presumption costs follow the event in s 56A appeals
– ability to depart from presumption in appropriate
circumstances – appropriate to depart from presumption as
Applicant successful on basis not argued before the Commissioner
– no order for costs of the appeal unless some different
costs order sought within 14 days of decision – if different
costs order sought, determination to be on written
submissions.
Civil Procedure Act 2005; Cumberland Local Environmental Plan 2021;
Environmental Planning and Assessment Act 1979; Environmental
Planning and Assessment Regulation 2000; Environmental Planning and
Assessment Regulation 2021; Land and Environment Court 1979; State
Environmental Planning Policy (infrastructure) 2008 and State
Environmental Planning Policy (Transport and Infrastructure)
2021.
Sioud v Canterbury-Bankstown Council [2023] NSWLEC
1171
APPEAL – development application – four-storey
mixed use development comprising a boarding house and commercial
tenancy with basement parking – whether the design of the
development is compatible with the character of the local area
– cl 30A of State Environmental Planning Policy (Affordable
Rental Housing) 2009 – whether the roof element is an
"architectural roof feature" for the purposes of cl 5.6
of the Bankstown Local Environmental Plan 2015 (LEP) –
variation of the building height standard under cl 4.6 of the LEP
– waste management – parking.
Bankstown Local Environment Plan 2015; Environmental Planning and
Assessment Act 1979; Environmental Planning and Assessment
Regulation 2000; State Environmental Planning Policy (Affordable
Rental Housing) 2009; State Environmental Planning Policy (Building
Sustainability Index: BASIX) 2004; State Environmental Planning
Policy (Housing) 2021; State Environmental Planning Policy
(Resilience and Hazards) 2021 and State Environmental Planning
Policy (Transport and Infrastructure) 2021.
Bailey v Commissioner of Police, NSW Police
Force [2023] NSWCATAP
1013
ADMINISTRATIVE LAW – freedom of information –
government information public access – public interest
considerations – failure to make findings as to whether there
were any public interest considerations in favour of disclosure and
the weight to be given to them – whether reasons were
inadequate.
Civil and Administrative Tribunal Act 2013 (NSW).
Legislation
NSW Legislation
Regulations and other miscellaneous instruments
Education
and Care Services National Amendment Regulations 2023 –
published LW 14 April 2023
Environmental Planning Instruments
Bega
Valley Local Environmental Plan 2013 (Map Amendment No 4)
– published LW 14 April 2023
Central
Darling Local Environmental Plan 2012 (Map Amendment No 1)
– published LW 14 April 2023
Cessnock
Local Environmental Plan 2011 (Map Amendment No 6) –
published LW 14 April 2023
Clarence
Valley Local Environmental Plan 2011 (Map Amendment No 5)
– published LW 14 April 2023
Coolamon
Local Environmental Plan 2011 (Map Amendment No 1) –
published LW 14 April 2023
Corowa
Local Environmental Plan 2012 (Map Amendment No 1) –
published LW 14 April 2023
Gloucester Local Environmental Plan 2010 (Map Amendment No 2)
– published LW 14 April 2023
Hunters
Hill Local Environmental Plan 2012 (Map Amendment No 1) –
published LW 14 April 2023
Ku-ring-gai
Local Environmental Plan 2015 (Map Amendment No 4) –
published LW 14 April 2023
Kyogle
Local Environmental Plan 2012 (Map Amendment No 1) –
published LW 14 April 2023
Lane
Cove Local Environmental Plan 2009 (Map Amendment No 1) –
published LW 14 April 2023
Liverpool
Plains Local Environmental Plan 2011 (Map Amendment No 1)
– published LW 14 April 2023
Manly
Local Environmental Plan 2013 (Map Amendment No 2) –
published LW 14 April 2023
Pittwater
Local Environmental Plan 2014 (Map Amendment No 3) –
published LW 14 April 2023
Queanbeyan-Palerang
Regional Local Environmental Plan 2022 (Map Amendment No 1)
– published LW 14 April 2023
Strathfield
Local Environmental Plan 2012 (Map Amendment No 1) –
published LW 14 April 2023
Upper
Lachlan Local Environmental Plan 2010 (Map Amendment No 2)
– published LW 14 April 2023
Wagga
Wagga Local Environmental Plan 2010 (Map Amendment No 11)
– published LW 14 April 2023
Wagga
Wagga Local Environmental Plan 2010 (Map Amendment No 12)
– published LW 14 April 2023
Walcha
Local Environmental Plan 2012 (Map Amendment No 1) –
published LW 14 April 2023
Wingecarribee
Local Environmental Plan 2010 (Map Amendment No 6) –
published LW 14 April 2023
Woollahra
Local Environmental Plan 2014 (Map Amendment No 2) –
published LW 14 April 2023
Great
Lakes Local Environmental Plan 2014 (Map Amendment No 4)
– published LW 6 April 2023
Port
Macquarie-Hastings Local Environmental Plan 2011 (Map Amendment No
4) – published LW 6 April 2023
Commonwealth legislation
Carbon
Credits (Carbon Farming Initiative) Act 2011 18/04/2023 –
Act No. 101 of 2011 as amended
Social
Security Act 1991 17/04/2023 – Act No, 46 of 1991 as
amended
Telstra
Corporation and Other Legislation Amendment Act 2021 14/04/2023
– Act No. 140 of 2021 as amended
Clean
Energy (Consequential Amendments) Act 2011 13/04/2023 –
Act No. 132 of 2011 as amended
Freedom
of Information Act 1982 13/04/2023 – Act No. 3 of 1982 as
amended
Bills assented to
Workplace Gender Equality Amendment (Closing the Gender pay Gap)
Bill 2023 11 April 2023
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.