Stan Lee was a beloved American icon—but he also may have been more exploitative and more exploited than most people realize. In recent years, Josie Riesman's fantastic book True Believer: The Rise and Fall of Stan Lee and Tom Scioli's comic book-styled biography I Am Stan: A Graphic Biography of the Legendary Stan Lee have both explored the nuances and complexities around the man's self-styled myth-making. — Read the rest
The post Making sense of Stan Lee's many financial messes appeared first
Each year, the Edmondson Community Organization (ECO)—a nonprofit in Baltimore dedicated to revitalizing the city's Midtown-Edmondson area—reviews an obscure list of properties released by the government. The task is to see how many are situated within the organization's neighborhood boundaries. The fewer, the better. The owners of the properties that do appear have fallen behind on their property taxes and, as a result, are poised to lose their
Each year, the Edmondson Community Organization (ECO)—a nonprofit in Baltimore dedicated to revitalizing the city's Midtown-Edmondson area—reviews an obscure list of properties released by the government. The task is to see how many are situated within the organization's neighborhood boundaries. The fewer, the better.
The owners of the properties that do appear have fallen behind on their property taxes and, as a result, are poised to lose their real estate in an annual tax sale conducted by the government. After poring over the list, the ECO knocks on those doors to deliver the queasy news and alert the occupants to what is about to happen.
The issue is one ECO knows intimately. A few years back, the organization accrued a $2,543 property tax debt on its community center. So in 2018, the city sold that lien for $5,115 to a California-based investor, who then foreclosed on and sold the ECO's building for $139,500. In return, the ECO got a check for the difference between its debt and the lien purchase price: $2,572.
In other words, all told, the organization paid six figures to compensate for the $2,543 it owed the government, in what a new federal lawsuit alleges is a pervasive practice in Baltimore that illegally deprives people of their equity in violation of the Fifth Amendment's Taking Clause as the city attempts to satisfy modest tax debts.
Every spring, Baltimore bureaucrats conduct a mass auction online to sell off liens like the ECO's. Sometimes the unlucky debtors have fallen just hundreds of dollars behind on their taxes.
For that, they may lose their property and the vast majority of equity tied up in it. Following an investor's purchase, an owner has a certain period to satisfy the amount of the lien, along with interest and fees, to keep their property. That's a tall order when considering these parties were struggling to pay the original debt, much less the new total, which has since ballooned. In the case that debtors are unsuccessful, the investor has effectively purchased the property for the amount they paid for the lien.
In the ECO's case, that meant an investor bought their building for about 2,600 percent less than what it ultimately sold for. The ECO, in turn, was left with a fraction of what their property was worth.
That Baltimore's process robs property owners of huge chunks of equity is not just a regrettable side effect, the ECO's lawsuit alleges; it's baked into the nature of the city's approach. "The City understands there that there is a finite pot of investor capital available to purchase all the liens," reads the complaint. "This creates a perverse incentive for the City to minimize the winning bids"—a.k.a. to depress prices—"to spread that finite pot across the highest number of liens."
Some of the moving parts of Baltimore's approach do seem to imply that the government is not merely unconcerned with owners retaining some of their equity but that they are actively seeking to keep bids low. The more glaring examples included in the ECO's suit show that the city charges a high-bid premium that punishes investors making offers above a certain threshold and opts to fulfill the law's advertising requirement in part by listing properties in The Daily Record, a business and legal newspaper that is not targeted at the general community. (The ECO says this violates state law, which stipulates that such a sale must be advertised twice in general-circulation newspapers.)
"There's a limited amount of investor money out there," says Maryland Legal Aid's chief legal and advocacy director Somil Trivedi, who is representing the ECO, "and the city has structured a system to spread that money across as many liens as possible instead of getting as much equity back for their citizens."
The ECO is not alone, according to the suit, but is one of many victims. You don't have to travel far to find others. "In the same tax sale in which a bidder purchased a lien on ECO's building, 68 properties in Midtown-Edmondson were also subject to the tax sale," states its complaint. "The winning bids on those properties totaled only 22%of the assessed value of the properties—a dramatic loss of generational wealth for the owner of each Midtown-Edmondson property that was lost in the sale."
Home equity theft, as it's sometimes called, was once an obscure issue limited to discussion in magazines like this one. But last year it took the national stage when the Supreme Court ruled unanimously in Tyler v. Hennepin County that a local government had violated the Constitution when it seized an elderly woman's condo over a modest tax debt, sold it, and kept the profit. Geraldine Tyler, the plaintiff in that suit, had fallen $2,300 behind on her taxes, which ultimately reached $15,000 after Hennepin County tacked on penalties, interest, and fees. The government then sold the condo for $40,000 and kept the additional $25,000.
While the ECO's situation isn't entirely analogous to Tyler's—the organization was paid something—Baltimore's scheme could still very well be unconstitutional, says Christina M. Martin, a senior attorney at Pacific Legal Foundation who represented Tyler before the Supreme Court. "If the procedure that you're using to sell the property is designed in a totally unreasonable manner, then obviously people are going to still get robbed of more than what they owe," she tells me. "There's a longstanding history of courts overturning sales that have a shocking result like [the ECO's]."
Tyler, in theory, should have put an end to stories like these. But the lawsuit out of Baltimore comes as some other jurisdictions have devised creative ways to comply with the law on its face but not really in practice. After Michigan's Supreme Court ruled the practice unconstitutional, for example, the state passed a convoluted debt collection statute that requires owners to complete a Herculean legal obstacle course to reclaim their equity. It is a difficult course to win.
"It is the government's choice in the first place to collect property taxes, to decide what regime they want to use to enforce the collection of those property taxes, and so it can't then complain that the regime that it chose to engage in for an amount of money that it chooses to collect is then too difficult to do constitutionally," says Trivedi. "There are lots of jurisdictions around the country that do it differently. Some don't even have tax sales. Some have much longer periods of negotiation and payment plans….Municipalities around the country have figured out ways to collect taxes without doing it unconstitutionally."
A Michigan couple sued when their local township passed an ordinance to prevent them from opening a cemetery. This week, in a victory for property rights, a judge ruled in the couple's favor and threw out the ordinance entirely. As Reason reported in January, Peter and Annica Quakenbush wanted to open a "green" cemetery, allowing people to bury their loved ones in a natural and environmentally friendly manner, free of chemicals like formaldehyde
A Michigan couple sued when their local township passed an ordinance to prevent them from opening a cemetery. This week, in a victory for property rights, a judge ruled in the couple's favor and threw out the ordinance entirely.
As Reasonreported in January, Peter and Annica Quakenbush wanted to open a "green" cemetery, allowing people to bury their loved ones in a natural and environmentally friendly manner, free of chemicals like formaldehyde and coffins containing metal. They specifically intended to establish a conservation burial ground, in which decedents would be buried in biodegradable coverings like cotton shrouds or wooden caskets and the burial sites would be marked by natural landmarks like rocks or native trees. The site would otherwise remain an undisturbed forest.
The Quakenbushes bought a 20-acre plot near Brooks Township and started putting together the necessary paperwork. But local officials had other plans in mind, and in June 2023, the Brooks Township Board passed an ordinance prohibiting the establishment of all new cemeteries.
"In the past, cemeteries elsewhere have taken up large amounts of sometimes otherwise productive land," the ordinance declared. "Cemetery landscaping, grass cutting, monument repair and upkeep costs have increased dramatically over time. The problems associated with abandoned or 'orphan' cemeteries have increased throughout Michigan, and citizens look to the local municipal government…to take over abandoned or orphan cemeteries."
According to the Quakenbushes' lawsuit, after they first inquired about establishing their cemetery in February 2022, a zoning official emailed the township's legal counsel. "It is our general recommendation that new private cemeteries not be allowed within the Township except under certain very limited circumstances," the attorney replied. "Almost certainly, at some time in the future (whether in a few decades or the distance [sic] future), the family members of the deceased individuals will no longer own the parcel involved. What happens to the burials then? In all likelihood, it would devalue the property and make it unmarketable or difficult to sell."
"My response to that is, what does it matter? It's not your property," Renée Flaherty, an attorney with the Institute for Justice who represented the Quakenbushes, told Reason in January.
Besides, there were numerous mechanisms in place to prevent that outcome: Establishing a conservation burial ground in accordance with the Green Burial Council's criteria, as is the Quakenbushes' intent, requires obtaining a conservation easement—preventing the land from being used for other purposes—and partnering with a land conservancy that can maintain the property in perpetuity.
Michigan state law also requires all private cemeteries to establish an "endowment and perpetual care trust fund," with $50,000 to start and monthly deposits of "not less than 15% of all proceeds received."
"Nearly 250 people had reserved a burial plot even while the ban was in place," a local FOX affiliate reported.
The Quakenbushes sued to overturn the ordinance as a violation of due process. The township filed a motion to dismiss the lawsuit. This week, after hearing oral arguments, Newaygo County Circuit Court Judge David Glancy not only dismissed the township's motion but found the ordinance unconstitutional.
A written order was not available at press time; a representative of the Newaygo County Circuit Court tells Reason that the court directed the plaintiffs' attorneys to prepare a ruling, which the judge will review in a later hearing.
"We're excited and feel vindicated by this ruling," the Quakenbushes said in a statement released by the Institute for Justice. "We are delighted that the judge understood that Brooks Township's ordinance violated our right to use our property and operate our cemetery."
"The Green Burial Council (GBC) is pleased to learn that Newaygo County, Michigan Circuit Judge David Glancy rejected Brooks Township's attempt to throw out a lawsuit against the 'cemetery ban' ordinance," the GBC said in a statement to Reason. "The Green Burial Council has stated before, that we believe Brooks Township's ordinance stood on a weak foundation of misinformation about green burial's negative impact on soil and water, and other similar fears. Though individuals may experience genuine trepidation about a naturally interred body's impact on their environment, local governments can easily find scientific evidence proving no such impact when burial practices are performed according to industry standards."*
UPDATE: This piece has been updated to include a statement from the Green Burial Council.
We’ve had plenty of posts discussing all manner of behavior from the Los Angeles Police Dept. and/or the LAPD union here at Techdirt. As you might imagine if you’re a regular reader here, the majority of those posts haven’t exactly involved fawning praise for these supposed crimefighters. In fact, if you went on a reading blitz of those posts, you might even come away thinking, “You know what? Fuck the LAPD!”
Well, if you wanted to display your sentiments while you went about your day, you might
We’ve had plenty of posts discussing all manner of behavior from the Los Angeles Police Dept. and/or the LAPD union here at Techdirt. As you might imagine if you’re a regular reader here, the majority of those posts haven’t exactly involved fawning praise for these supposed crimefighters. In fact, if you went on a reading blitz of those posts, you might even come away thinking, “You know what? Fuck the LAPD!”
Well, if you wanted to display your sentiments while you went about your day, you might go over to the Cola Corporation’s website to buy one particular shirt it had on offer there before they completely sold out.
Now, it’s not uncommon for misguided entities to issue intellectual property threat letters over t-shirts and apparel, even when it is of the sort that is obviously fair use. Given that, you might have thought it would be the Los Angeles Lakers that sent a nastygram to Cola Corp. After all, the logo in question is clearly a parody of the LA Lakers logo.
Nope!
It was the Los Angeles Police Foundation via its IMG representatives. The LAPF is something of a shadow financier of the LAPD for equipment, including all manner of tech and gear. We have no idea how an entertainment agency like IMG got in bed with these assbags, but it was IMG sending the threat letter you can see below, chock full of all kinds of claims to rights that the LAPF absolutely does not and could not have.
If you can’t see that, it’s a letter sent by Andrew Schmidt, who represents himself as the Senior Counsel to IMG Worldwide, saying:
RE: Request to Remove Infringing Material From www.thecolacorporation.com Dear Sir/Madam:
I am writing on behalf of IMG Worldwide, LLC (“IMG”), IMG is the authorized representative of Los Angeles Police Foundation CLAPF) LAPF is one of two exclusive holders of intellectual property rights pertaining to trademarks, copyrights and other licensed indicia for (a) the Los Angeles Police Department Badge; (b) the Los Angeles Police Department Uniform; (c) the LAPD motto “To Protect and Serve”; and (d) the word “LAPD” as an acronym/abbreviation for the Los Angeles Police Department (collectively, the “LAPD IP”). Through extensive advertising, promotion and the substantial sale of a full range of licensed products embodying and pertaining to the LAPD IP, the LAPD IP has become famous throughout the world; and as such, carries immeasurable value to LAPF.
We are writing to you regarding an unauthorized use of the LAPD IP on products being sold on your website, www.thecolacorporation.com (the “Infringing Product”). The website URL and description for the Infringing Product is as follows: https://www.thecolacorporation.com/products fack-the- lupd pos-1&sid=435934961&&variant=48461787234611 FUCK THE LAPD For the avoidance of doubt, the aforementioned Infringing Product and the image associated therewith are in no way authorized or approved by LAPF or any of its duly authorized representatives.
This letter hereby serves as a statement that:
The aforementioned Infringing Product and the image associated therewith violate LAPF’s rights in the LAPD IP
These exclusive rights in and to the LAPD IP are being violated by the sale of the Infringing Product on your website at the URL mentioned above;
[Contact info omitted]
On information and belief, the use of the LAPD IP on the Infringing Products is not authorized by LAPF, LAPF’s authorized agents or representatives or the law.
Under penalty of perjury, I hereby state that the above information is accurate and I am duly authorized to act on on behalf of the rights holder of the intellectual. property at issue I hereby request that you remove or disable access the above-mentioned materials and their corresponding URL’s as they appear on your services in as expedient a manner as possible.
So, where to begin? For starters, note how the letter breezily asserts copyright, trademark, and “other licensed indicia” without ever going into detail as to what it thinks it actually holds the rights to? That’s an “indicia” of a legal threat that is bloviating, with nothing to back it up. If you know what rights you have, you clearly state them. This letter does not.
If it’s a copyright play that the LAPF is trying to make, it’s going to go absolutely nowhere. The use is made for the purposes of parody and political commentary. It’s clearly fair use, and there are plenty of precedents to back that up. Second, what exactly is the copyright claim here? It’s not the logo. Again, if anything, that would be the Lakers’ claim to make. The only thing possibly related to the LAPD would be those letters: LAPD. And, no, the LAPD does not get to copyright the letters LAPD.
If it’s a trademark play instead, well, that might actually work even less for the LAPF, for any number of reasons. Again, this is parody and political commentary: both First Amendment rights that trump trademarks. More importantly, in trademark you have the question of the likelihood of confusion. We’re fairly sure the LAPF doesn’t want to make the case that the public would be confused into thinking that the Los Angeles Police Foundation was an organization that is putting out a “Fuck the LAPD” t-shirt. Finally, for there to be a trademark, there has to be a use in commerce. Is the LAPF selling “Fuck the LAPD” t-shirts? Doubtful.
But that’s all sort of besides the point, because the LAPF doesn’t have the rights IMG asserted in its letter. Again, the only possible claim that the LAPF can make here is that it has ownership to the letters LAPD. And it does not. Beyond the fact that it had no “creative” input into LAPD, the LAPD is a city’s law enforcement agency and you cannot copyright or trademark such a thing. And, as we’ve discussed multiple times in the past, government agencies don’t get to claim IP on their agency names. The only restrictions they can present are on deceptive uses of logos/seals/etc.
So, what is actually happening here is that the LAPF/LAPD (via IMG) is pretending it has the right to screw with private citizens in ways it absolutely does not, and is using those false rights to harass those private persons with threatening behavior to intimidate them into doing what the LAPF wants. Which, if I’m being totally honest here, is certainly on brand as roughly the most police-y thing it could do in response to a simple t-shirt that is no longer even for sale.
Now, you might imagine that the Cola Corporation’s own legal team would reply to the silly threat letter outlining all of the above, crafting a careful and articulate narrative responding to all the points raised by the LAPF, and ensuring that their full legal skills were on display.
Instead, the company brought on former Techdirt podcast guest, lawyer Mike Dunford, who crafted something that is ultimately even better.
If you can’t read that, you’re not missing much. It says:
Andrew,
Lol, no.
Sincerely, Mike Dunford
Perfect. No notes. May it go down in history alongside Arkell v. Pressdam, or the infamous Cleveland Browns response to a fan complaining about paper airplanes, as the perfect way to respond to absolutely ridiculous legal threat letters.
For what it’s worth, Dunford’s boss, Akiva Cohen, noted that this letter was “a fun one to edit.” We can only imagine.
We’ve had plenty of posts discussing all manner of behavior from the Los Angeles Police Dept. and/or the LAPD union here at Techdirt. As you might imagine if you’re a regular reader here, the majority of those posts haven’t exactly involved fawning praise for these supposed crimefighters. In fact, if you went on a reading blitz of those posts, you might even come away thinking, “You know what? Fuck the LAPD!”
Well, if you wanted to display your sentiments while you went about your day, you might
We’ve had plenty of posts discussing all manner of behavior from the Los Angeles Police Dept. and/or the LAPD union here at Techdirt. As you might imagine if you’re a regular reader here, the majority of those posts haven’t exactly involved fawning praise for these supposed crimefighters. In fact, if you went on a reading blitz of those posts, you might even come away thinking, “You know what? Fuck the LAPD!”
Well, if you wanted to display your sentiments while you went about your day, you might go over to the Cola Corporation’s website to buy one particular shirt it had on offer there before they completely sold out.
Now, it’s not uncommon for misguided entities to issue intellectual property threat letters over t-shirts and apparel, even when it is of the sort that is obviously fair use. Given that, you might have thought it would be the Los Angeles Lakers that sent a nastygram to Cola Corp. After all, the logo in question is clearly a parody of the LA Lakers logo.
Nope!
It was the Los Angeles Police Foundation via its IMG representatives. The LAPF is something of a shadow financier of the LAPD for equipment, including all manner of tech and gear. We have no idea how an entertainment agency like IMG got in bed with these assbags, but it was IMG sending the threat letter you can see below, chock full of all kinds of claims to rights that the LAPF absolutely does not and could not have.
If you can’t see that, it’s a letter sent by Andrew Schmidt, who represents himself as the Senior Counsel to IMG Worldwide, saying:
RE: Request to Remove Infringing Material From www.thecolacorporation.com Dear Sir/Madam:
I am writing on behalf of IMG Worldwide, LLC (“IMG”), IMG is the authorized representative of Los Angeles Police Foundation CLAPF) LAPF is one of two exclusive holders of intellectual property rights pertaining to trademarks, copyrights and other licensed indicia for (a) the Los Angeles Police Department Badge; (b) the Los Angeles Police Department Uniform; (c) the LAPD motto “To Protect and Serve”; and (d) the word “LAPD” as an acronym/abbreviation for the Los Angeles Police Department (collectively, the “LAPD IP”). Through extensive advertising, promotion and the substantial sale of a full range of licensed products embodying and pertaining to the LAPD IP, the LAPD IP has become famous throughout the world; and as such, carries immeasurable value to LAPF.
We are writing to you regarding an unauthorized use of the LAPD IP on products being sold on your website, www.thecolacorporation.com (the “Infringing Product”). The website URL and description for the Infringing Product is as follows: https://www.thecolacorporation.com/products fack-the- lupd pos-1&sid=435934961&&variant=48461787234611 FUCK THE LAPD For the avoidance of doubt, the aforementioned Infringing Product and the image associated therewith are in no way authorized or approved by LAPF or any of its duly authorized representatives.
This letter hereby serves as a statement that:
The aforementioned Infringing Product and the image associated therewith violate LAPF’s rights in the LAPD IP
These exclusive rights in and to the LAPD IP are being violated by the sale of the Infringing Product on your website at the URL mentioned above;
[Contact info omitted]
On information and belief, the use of the LAPD IP on the Infringing Products is not authorized by LAPF, LAPF’s authorized agents or representatives or the law.
Under penalty of perjury, I hereby state that the above information is accurate and I am duly authorized to act on on behalf of the rights holder of the intellectual. property at issue I hereby request that you remove or disable access the above-mentioned materials and their corresponding URL’s as they appear on your services in as expedient a manner as possible.
So, where to begin? For starters, note how the letter breezily asserts copyright, trademark, and “other licensed indicia” without ever going into detail as to what it thinks it actually holds the rights to? That’s an “indicia” of a legal threat that is bloviating, with nothing to back it up. If you know what rights you have, you clearly state them. This letter does not.
If it’s a copyright play that the LAPF is trying to make, it’s going to go absolutely nowhere. The use is made for the purposes of parody and political commentary. It’s clearly fair use, and there are plenty of precedents to back that up. Second, what exactly is the copyright claim here? It’s not the logo. Again, if anything, that would be the Lakers’ claim to make. The only thing possibly related to the LAPD would be those letters: LAPD. And, no, the LAPD does not get to copyright the letters LAPD.
If it’s a trademark play instead, well, that might actually work even less for the LAPF, for any number of reasons. Again, this is parody and political commentary: both First Amendment rights that trump trademarks. More importantly, in trademark you have the question of the likelihood of confusion. We’re fairly sure the LAPF doesn’t want to make the case that the public would be confused into thinking that the Los Angeles Police Foundation was an organization that is putting out a “Fuck the LAPD” t-shirt. Finally, for there to be a trademark, there has to be a use in commerce. Is the LAPF selling “Fuck the LAPD” t-shirts? Doubtful.
But that’s all sort of besides the point, because the LAPF doesn’t have the rights IMG asserted in its letter. Again, the only possible claim that the LAPF can make here is that it has ownership to the letters LAPD. And it does not. Beyond the fact that it had no “creative” input into LAPD, the LAPD is a city’s law enforcement agency and you cannot copyright or trademark such a thing. And, as we’ve discussed multiple times in the past, government agencies don’t get to claim IP on their agency names. The only restrictions they can present are on deceptive uses of logos/seals/etc.
So, what is actually happening here is that the LAPF/LAPD (via IMG) is pretending it has the right to screw with private citizens in ways it absolutely does not, and is using those false rights to harass those private persons with threatening behavior to intimidate them into doing what the LAPF wants. Which, if I’m being totally honest here, is certainly on brand as roughly the most police-y thing it could do in response to a simple t-shirt that is no longer even for sale.
Now, you might imagine that the Cola Corporation’s own legal team would reply to the silly threat letter outlining all of the above, crafting a careful and articulate narrative responding to all the points raised by the LAPF, and ensuring that their full legal skills were on display.
Instead, the company brought on former Techdirt podcast guest, lawyer Mike Dunford, who crafted something that is ultimately even better.
If you can’t read that, you’re not missing much. It says:
Andrew,
Lol, no.
Sincerely, Mike Dunford
Perfect. No notes. May it go down in history alongside Arkell v. Pressdam, or the infamous Cleveland Browns response to a fan complaining about paper airplanes, as the perfect way to respond to absolutely ridiculous legal threat letters.
For what it’s worth, Dunford’s boss, Akiva Cohen, noted that this letter was “a fun one to edit.” We can only imagine.
Is it a crime to learn something by reading a copyrighted book? What if you later summarize that book to a friend or write a description of it online? Of course, these things are perfectly legal when a person does them. But does that change when it's an artificial intelligence system doing the reading, learning, and summarizing? Sarah Silverman, comedian and author of the book The Bedwetter, seems to think it does. She and several other authors a
Is it a crime to learn something by reading a copyrighted book? What if you later summarize that book to a friend or write a description of it online? Of course, these things are perfectly legal when a person does them. But does that change when it's an artificial intelligence system doing the reading, learning, and summarizing?
Sarah Silverman, comedian and author of the book The Bedwetter, seems to think it does. She and several other authors are suing OpenAI, the tech company behind the popular AI chatbot ChatGPT, through which users submit text prompts and receive back AI-generated answers.
Last week, a federal judge largely rejected their claims.
The ruling is certainly good news for OpenAI and for ChatGPT users. It's also good news for the future of AI technology more broadly. AI tools could be completely hamstrung by the expansive vision of copyright law that Silverman and the other authors in this case envision.
The Authors' Complaints and OpenAI's Response
Teaching AI to communicate and "think" like a human takes a lot of text. To this end, OpenAI used a massive dataset of books to train the language models that power its artificial intelligence. ("It is the volume of text used, more than any particular selection of text, that really matters," OpenAI explained in its motion to dismiss.)
Silverman and the others say this violates federal copyright law.
Authors Paul Tremblay and Mona Awad filed a class-action complaint to this effect against OpenAI last June. Silverman and authors Christopher Golden and Richard Kadrey filed a class-action complaint against OpenAI in July. The threesome also filed a similar lawsuit against Meta. In all three cases, the lead lawyer was antitrust attorney Joseph Saveri.
"As with all too many class action lawyers, the goal is generally enriching the class action lawyers, rather than actually stopping any actual wrong," suggestedTechdirt Editor in Chief Mike Masnick when the suits were first filed. "Saveri is not a copyright expert, and the lawsuits…show that. There are a ton of assumptions about how Saveri seems to think copyright law works, which is entirely inconsistent with how it actually works."
In both complaints against OpenAI, Saveri claims that copyrighted works—including books by the authors in this suit—"were copied by OpenAI without consent, without credit, and without compensation."
This is a really weird way to characterize how AI training datasets work. Yes, the AI tools "read" the works in question in order to learn, but they don't need to copy the works in question. It's also a weird understanding of copyright infringement—akin to arguing that someone reading a book in order to learn about a subject for a presentation is infringing on the work or that search engines are infringing when they scan webpages to index them.
The authors in these cases also object to ChatGPT spitting out summaries of their books, among other things. "When ChatGPT was prompted to summarize books written by each of the Plaintiffs, it generated very accurate summaries," states the Silverman et al. complaint.
Again, putting this in any other context shows how silly it is. Are book reviewers infringing on the copyrights of the books they review? Is someone who reads a book and tweets about the plot violating copyright law?
It would be different if ChatGPT reproduced copies of books in their entirety or spit out large, verbatim passages from them. But the activity the authors allege in their complaints is not that.
The copyright claims in this case "misconceive the scope of copyright, failing to take into account the limitations and exceptions (including fair use) that properly leave room for innovations like the large language models now at the forefront of artificial intelligence," OpenAI argued in its motion to dismiss some of the claims.
It suggested that the doctrine of fair use—designed in recognition of the fact "that the use of copyrighted materials by innovators in transformative ways does not violate copyright"—applies in this case and the case of "countless artificial intelligence products [that] have been developed by a wide array of technology companies."
The Court Weighs In
The authors prevailing here could seriously hamper the creation of AI language learning models. Fortunately, the court isn't buying a lot of their arguments. In a February 12 ruling, Judge Araceli Martínez-Olguín of the U.S. District Court for the Northern District of California dismissed most of the authors' claims against OpenAI.
This included the claims that OpenAI engaged in "vicarious copyright infringement," that it violated the Digital Millennium Copyright Act (DMCA), and that it was guilty of negligence and unjust enrichment. The judge also partially rejected a claim of unfair competition under California law while allowing the authors to proceed with that claim in part (largely because California's understanding of "unfair competition" here is so broad).
Silverman and the other authors in these cases "have not alleged that the ChatGPT outputs contain direct copies of the copyrighted books," Martínez-Olguín noted. And they "fail to explain what the outputs entail or allege that any particular output is substantially similar – or similar at all — to their books."
The judge also rejected the idea that OpenAI removed or altered copyright management information (as prohibited by Section 1202(b) of the DMCA). "Plaintiffs provide no facts supporting this assertion," wrote Martínez-Olguín. "Indeed, the Complaints include excerpts of ChatGPT outputs that include multiple references to [the authors'] names."
And if OpenAI didn't violate the DMCA, then other claims based on that alleged violation—like that OpenAI distributed works with copyright management information removed or engaged in unlawful or fraudulent business practices—fail too.
More AI/Copyright Battles To Come
This isn't the end of the authors vs. OpenAI debate. The judge did not yet rule on their direct copyright infringement claim because OpenAI did not seek yet to dismiss it. (The company said it will try to resolve that later in the case.)
The judge also will allow the parties to file an amended complaint if they want to.
Given the lameness of their legal arguments, and the judge's dismissal of some of the claims, "it's difficult to see how any of the cases will survive," writes Masnick. (See his post for a more detailed look at the claims involved here and why a judge dismissed them.)
Unfortunately, we're almost certain to keep seeing people sue AI companies—language models, image generators, etc.—on dubious grounds, because America is in the midst of a growing AI tech panic. And every time a new tech panic takes hold, we see people trying to make money and/or a name for themselves by flinging a bunch of flimsy accusations in lawsuit form. We've seen this with social media companies and Section 230, social media and alleged mental health harms to teens, all sorts of popular tech companies and antitrust law.
Now that artificial intelligence is the darling of tech exuberance and hysteria alike, a lot of folks—from bureaucrats at the Federal Trade Commission to enterprising lawyers to all sorts of traditional media creators and purveyors—are seeking to extract money for themselves from these technologies.
"I understand why media companies don't like people training on their documents, but believe that just as humans are allowed to read documents on the open internet, learn from them, and synthesize brand new ideas, AI should be allowed to do so too," commented Andrew Ng, co-founder of Coursera and an adjunct professor at Stanford. "I would like to see training on the public internet covered under fair use—society will be better off this way—though whether it actually is will ultimately be up to legislators and the courts."
Unlike many people who write about technology, I don't foresee major disruptions, good or bad, coming from AI anytime soon. But there are many smaller benefits and efficiencies that AI can bring us—if we can keep people from hampering its development with a maximalist reading of copyright law.
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