AD-ttorneys@law – April 10, 2023

Alerts / April 10, 2023

In This Issue:

U.S. Copyright Office Keeps AI Out in the Cold

Only humans can copyright, Office says

Daisy, Daisy, Give Me Your Answer True

The Copyright Office has weighed in with long-anticipated statement of policy regarding AI-generated works. If you haven’t been scared out of your previously privileged human role in culture. business and the economy wits by recent news regarding lightning-fast advances in AI, then brace yourself and read this.

Back so soon? Sit down and collect yourself. We’re about to add some levity to the mix.

Before we do, here’s the background: The recent proliferation of AI text and image generators are loosely based on a common technological approach. Algorithms are trained on gazillions of internet-based images or pages of text to predict a “successful” outcome of a query, such as “create an image of a duck in full plate armor” or “write a poem describing Pete Davidson and Kim Kardashian’s relationship in iambic pentameter.” And other, more ominous uses.

This, of course, set off concerns—and lawsuits—about the copyright implications of the work generated by our new AI overlords.

AI Am a Monkey’s Uncle

Ready for a change of mood? Enter the Copyright Office’s new statement of policy. Regarding whether the text and images spat out by the AI systems could be copyrighted, the Office provided the following insight, buttressed by delightful explanations:

Federal appellate courts have [concluded that only material that is the product of human creativity can be copyrighted] when interpreting the text of the Copyright Act, which provides copyright protection only for “works of authorship.”

The Ninth Circuit has held that a book containing words “authored by non-human spiritual beings” can only qualify for copyright protection if there is “human selection and arrangement of the revelations.”

In another case, it held that a monkey cannot register a copyright in photos it captures with a camera because the Copyright Act refers to an author’s “children,” “widow,” “grandchildren,” and “widower,”—terms that “all imply humanity and necessarily exclude animals.”

In short, “to qualify as a work of ‘authorship’ a work must be created by a human being,” and the Office “will not register works produced by a machine or mere mechanical process that operates randomly or automatically without any creative input or intervention from a human author.”

So: Human primacy remains intact, at least at the Copyright Office.

But the question remains: What happens when the AIs build artificial monkeys?

The Takeaway

Even if you’re just toying around with AI bots to create content, or simply planning on toying around with AI bots, read the policy statement, pronto.

But there’s more: Alongside the statement, the Copyright Office announced new registration guidance and “a new initiative to examine the copyright law and policy issues raised by artificial intelligence (AI), including the scope of copyright in works generated using AI tools and the use of copyrighted materials in AI training.”

Because the Office is already “receiving applications for registration of works including AI-generated content,” it’s setting up a series of public listening sessions to grapple with questions of application of copyright to AI-generated works and works generated in cooperation with AIs. There are sessions on literary, visual, and audiovisual works as well as music and sound recordings.

If you’re interested in making your voice heard, now’s the time. You know—before you’re replaced.

NB—The entirety of this newsletter was written by human beings. We’re pretty sure.

Are Lomi’s Eyes Bigger than Its Belly?

Sleek composter does a great job, but TINA alleges its advertising may be an oversell

Dirt in the Kitchen

Full disclosure: We bought a Lomi.

By “we,” of course, we mean “one of the members of the ad-ttorneys@law editorial staff”. There’s no community Lomi in our offices—we have a hard enough time figuring out who left the mac and cheese at the back of the fridge since mid-January, let alone whether they’d let us compost it. (We think Danny from accounting left it in there, and he’s super touchy about people messing with his food.)

Yes, Lomi is a composter. Specifically, it’s a home composter that sits easily on a kitchen counter. And it’s an interesting product, our colleague tells us—just dump food scraps in and it turns the waste into dirt that you can use to grow more food. Cool, right?

Don’t Watch This Space

Don’t get the wrong impression—we haven’t signed Lomi as a sponsor. This is not a Lomi commercial; it’s a post about a Lomi commercial, as you probably already figured out.

While owning a Lomi might earn you cred with the community garden types in your neighborhood, it doesn’t solve the problem of all the non-organic waste that we produce. No blame here—we’re glad that the Lomi is reducing waste. But the company clearly wants to create synergies with other companies that are producing biodegradable home products.

One of Lomi’s recent ads caught the attention of Truth In Advertising, Inc. TINA alleges that the ad claims “that its counter-top composter turns not just food scraps but ‘product packaging and even compostable plastics’ into ‘nutrient-rich fertilizer.’ In the ad, a spoon, knife and bag are tossed in the machine…”

According to TINA, the problem is there’s a limited universe of nonfood items that can be chucked into the Lomi—104, to be precise, detailed on the company website, including specific brand-name compostable utensils, food containers, and garbage and storage bags.

The Takeaway

Which is still cool enough for us. But it’s still important to note TINA’s point: Nowhere in the ad does the company disclose the limited number of nonfood products that can be broken down by the Lomi. “Despite the company’s broad composting claims,” TINA writes, “it seems like the only things that should be going into Lomi is organic food waste and a relatively small number of nonfood products.”

TINA also notes that there are certain foods that cannot be broken down by a Lomi—“liquids, oils, very hard foods”.

So, great product, but as always the issue comes down to what do consumers take away from the company’s claim about what its product can compost and if that takeaway is overly broad is some sort of qualifying language required.

Cher to Bono Estate: I Got Rights, Babe

Iconic singer’s divorce agreement weathers copyright termination

Time Travel Paradox

We’re old enough to have watched The Sonny & Cher Comedy Hour when it originally aired, and that makes us feel young. Yes, young.

We remember sitting there in front of the TV, baffled by what we were watching. The random musical interludes. The garish sets and costumes. The weird, forced laughter. And the corny, bizarre skits. Oh the skits.

We imagine that anyone born in the past thirty years who watches these clips online will be just as baffled as we were, giving us a temporary illusion of youth and innocence.

Thanks, Sonny and Cher! Thanks, YouTube! Now, if it only worked for MacGyver...

Mama Was a Rock and Roll Singer, Papa Used to Write All Her Songs

(Yes, that’s the title of an actual Sonny and Cher song.)

There’s one remarkable fact about Cher that stands out. Above and beyond her ability to reinvent herself, all of her awards and recognition, her groundbreaking role as an in-charge woman in the entertainment industry, and the vast sums of money she commanded at the height of her career.

She has scored at least one number-one single on the Billboard charts per decade for six decades. She’s the only artist who’s ever done it.

Cher’s marriage with Sonny Bono overlapped with the first two decades of that career, spanning the 1960s and the first half of the 1970s. When the pair divorced, they struck an agreement granting Cher half of Sonny’s record and composition royalties for the works he had written during their marriage—rights that Sonny paid to Cher for the remainder of his life, and that his estate continued paying after his death.

Continued, that is, until 2016, when Sonny’s heirs, fronted by his widow Mary, filed termination of copyright to music publishers that had been working with his catalog. They took that opportunity to cut off the royalty payments to Cher as well.

Cher sued in 2021, hoping to restore the flow of Bono money into her coffers, claiming that the arrangement established in her divorce agreement still held regardless of the estate’s moves on copyright.

The Takeaway

The court came down on Cher’s side in a split-decision order that is, in fact, a win for the singer.

Mary Bono had moved to dismiss Cher’s case, arguing that the estate’s copyright claims trumped Cher’s contractual rights because the copyright was backed by federal law, while the divorce agreement was tied to California state law.

As far as the record royalties were concerned, the court held that the “practical effect of the termination notice is that Plaintiff no longer receives royalties for the copyright grants that no longer exist.” Because the rights to specific recordings had ended, the estate wasn’t obligated to pay; and it could handle the assignation of future recording rights in any way it wished.

But Cher came out on top with regards to the composition royalties. “Unlike the terms that apply to the Record Royalties,” the court wrote, “these provisions do not mention the agreements. Instead, they provide that Plaintiff has a right in the proceeds of these ‘musical compositions and interests therein . . . from all sources perpetually…’”. With that, the composition royalty side of the case moved closer to trial.

For a more detailed discussion of battle over these overlapping right, check out Copyright Lately’s article on the case

Snack Dragon Oreo Case Gets Dunked

Court: Fudge is in the mouth of the behosdfmuph mumph

Identity Crisis

Here’s a follow-up to a case we covered back in December 2021: Leonard v. Mondelez Global LLC, a class action taken up by everyone’s favorite plaintiffs’ counsel. Plaintiff Christopher Leonard sued global snack behemoth Mondelēz Global, producer of the iconic Oreo brand.

Leonard purchased fudge-covered Oreo mint crème cookies, which, according to his complaint, don’t really contain fudge at all.

Fudge, which is part of the product’s name and prominently displayed on its packaging, is made with milkfat—according to Leonard’s complaint. But, according to the ingredient label, the “fudge” coating on the cookies only feature nonfat milk and vegetable oils.

The complaint tried to establish a generally accepted definition of “fudge,” citing to news articles and various recipes. Unlike with chocolate, there is no FDA standard of identity for fudge.


And that’s where things fell apart for Leonard. Without a concrete standard to anchor a complaint, “consumer expectation” presents an uncertain foundation for such a case.

“Plaintiff cites several recipes and various cookbook, textbook, and dictionary definitions that list sugar, milk or cream, and butter as fudge ingredients,” the court states in a recent order dismissing the case. “Courts in this District and across the country, however, have repeatedly rejected that dictionary definitions or recipes, without more, are representative of the views of a significant portion of reasonable consumers.”

The court even throws some of Leonard’s sources back in the fondue pot: “Not a single source claims that milk and butter are essential fudge ingredients or that milkfat is necessary to make fudge,” the court maintains. “Indeed, Molly Mills—who Plaintiff identifies as ‘one of today’s leading authorities on fudge’—describes fudge as ‘most commonly made from butter, sugar, and chocolate.’”

The court dismissed the case in its entirety, with prejudice.

The Takeaway

What have we learned?

This case is yet another shot in Snack Dragon’s fusillade against the snacking industry. We’ve covered this type of case so often that there isn’t much more to learn from plaintiffs’ strategy at this point. These cases will continue to come and will continue to take the same basic shape: The defendant’s products invoke an ingredient, or are named after it; that ingredient proves to be made up of components that the plaintiff considers a poor substitute for the real thing; the plaintiff sues for the alleged discrepancy in price between the product with the best ingredients and what they allegedly would have paid for the subpar version.

In this case, the takeaway isn’t about how you should deal with such a case, but about how to avoid it. The expectations of consumers are difficult to predict. By ensuring that the marketing surrounding your product, from its name to the ingredients listed on the front of the package, are well aligned with the nutrition information panel on the back.

Are the ingredients you’re using in the marketing governed by a Food and Drug Administration standard? If so, make sure they’re meeting the standard. If not, how are the ingredients you’re bragging about on the package related to the common understanding of what they are, and how they’re made?

Asian Clothing Titans Duke It Out in Illinois

Super-app Shein accuses rival of impersonation and infringement

One of Those Good Problems

Not so long ago, we reported on the calamitous data breach suffered by Zoetop, Inc., a clothing website operator, through a cyberattack perpetrated against Shein, its e-commerce export channel in the U.S.

The attack, which dumped names, addresses and passwords on 39 million accounts, was a sign not just of Zoetop’s alleged lax security practices, but also of the incredible popularity of Shein. As we noted, “Zoetop got caught flatfooted by its own success...its data security teams hadn’t kept up with the growth of the company. Its subsequent skyrocketing sales resulting from the COVID-19 pandemic likely made matters more difficult…”

All this success put a target on the back of Shein’s colorful, ultra-fast fashion offerings.

Success Breeds Stress

And we’re talking success. As the company’s Singapore-based owner, Roadget, claims in a recent complaint:

“In May 2021, the Shein Mobile App became the most downloaded shopping mobile application in the U.S. on both iOS and Android, overtaking even downloads of Amazon’s mobile application. In May 2022, that same mobile application became the most downloaded mobile application in the U.S. in any category, outperforming both TikTok and Instagram. The Shein brand also has a significant presence on social media, with over 26 million followers on Instagram, 5.5 million followers on TikTok and over 500,000 followers on Twitter...”

The complaint is aimed at competitor Temu, the operator of a similar retail website and app, whose parent companies are located in China. Shein accuses Temu of trademark counterfeiting and copyright infringement, among other outrages.

Roadget’s accusations are extensive, but boil down to three categories of brand exploitation: First, that Temu scooped up images copyrighted by Shein to sell its own goods on its app. Second, that Temu tried to leverage Shein’s enormous online popularity by “disseminating false and deceptive statements regarding Shein products to influencers and inducing them to make such statements in connection with the promotion of Temu’s goods and services to their followers in exchange for monetary payments.” Finally, the company accuses Temu of creating fake Twitter handles based on Shein’s trademarks in the United States and launched Google ads that use Shein trademarks but point to Temu’s site.

The Takeaway

None of the accusations levied against Temu are novel in the capacious world of ad-law, but the case is an interesting example of the internationalization of IP issues—and the enduring...popularity?...of the United States legal system as a forum both of choice and necessity.

Our nation’s stable legal system, well-tried copyright and trademark frameworks, and promises of significant recovery guarantee that ever more cases involving monster companies from overseas will appear in the United States.

The case is just beginning to move down the runway. We’ll keep an eye on future developments.

Check Out Our Latest Blog Posts

The ABCs of the ESRB

With “The Last of Us” on HBO racking up viewers and “Hogwarts Legacy” smashing records, there is no denying that video game culture is having a moment. But what should we be on the lookout for when advertising our games online? The Entertainment Software Rating Board (ESRB) is the self-regulatory organization that assigns age and content ratings to video games in the United States and Canada.

FTC Defendants Stumble After a Disorderly Race to the Courthouse

Last June, the Federal Trade Commission (FTC) brought a lawsuit against Gravity Defyer and its owner in federal court, alleging that the defendants were making deceptive pain-relief claims for Gravity Defyer footwear. The lawsuit alleged violations of the FTC Act as well as violations of a prior FTC administrative order that had been entered against the owner back in 2001. (And, as you may know, FTC administrative orders last 20 years, so this was quite a close call on the timing front.)

FTC One-Ups Itself with One Proposed Rule to Rule All Subscription Services

Mornings for advertising lawyers usually start slow – coffee in one hand and phone in the other while we glance at emails. Imagine our surprise the other morning when we saw that the Federal Trade Commission (FTC) had issued a press release and Federal Register Notice at 6 a.m. so that Chair Lina Khan could appear on NPR’s “Morning Edition” to talk about a new proposed Negative Option Rule.

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Building Blocks: Fundamentals of Blockchain, Cryptocurrency & Other Digital Assets

April 12, 2023, at 02:00 p.m. EST - Can’t tell your BTC from your ETH? Do you just smile and nod when people mention NFTs? Then this CLE is for you! Join us and learn the ABCs of cryptocurrency and blockchain technology.

Compliant Consumer Review Practices

April 20, 2023, at 12:30 p.m. EST - Join Amy Ralph Mudge and Victoria Weatherford as they outline what you need to know to make sure your solicitation, moderation, and posting of reviews pass muster with the FTC, state AGs, NAD, and the courts. They will also discuss troubleshooting the use of third-party review websites.

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