Insight for the Entrepreneur

February 6, 2024Tessa Brandsema 3 Comments

AI & IP: Four Important Letters for Business Owners to Know

Regardless of if you find yourself in the business world, academia, or simply browsing the Internet, it is nearly impossible to escape the discourse surrounding the recent insurgence of artificial intelligence. Its capabilities appear to be boundless, and many individuals have chosen to utilize its generative abilities to create art, brainstorm business ideas, and problem solve real world issues. However, it is incredibly important to note—especially for entrepreneurs and business owners just setting out—that there are potential pitfalls hidden in the glamour and ease of artificial intelligence that must be carefully navigated.

Protecting AI-generated work

Building an intellectual property portfolio is often on the first page of an entrepreneur’s to-do list: it is imperative to ensure that a business’s name, slogan, and logo are secured by trademarks, and that patents are procured for any inventions relevant to the company’s product or service offerings. Business owners must remember that as tempting as it may be to have artificial intelligence help out with designing the company’s branding or generating an eye-catching logo, the resulting images would not be protectable under any intellectual property options, a fact that is not emphasized by AI developers who may be pushing their software as mechanisms for services like logo creation. This is because material generated by AI lacks a human creator, which is a key factor that must be considered when obtaining a patent or copyright registration.

Artificial Intelligence Illustration Images - Free Download on Freepik In 2022, the Thaler v. Vidal case addressed whether or not food containers that were created without any human contribution were patentable. The United States Patent and Trademark Office had originally rejected the patent applications based on their lack of human input, and the U.S. Court of Appeals for the Federal Circuit agreed, stating that statutory interpretation limits inventorship to natural persons, which obviously disqualifies AI mechanisms—but what about situations in which the subject matter in question was only partially created by AI? The U.S. Copyright Office considered this scenario when Kris Kashtanova attempted to obtain copyright protection for a partially AI-generated comic book. The images within the comics were AI-generated but human-selected, and Kashtanova wrote the text and oversaw the final arrangement of the images and overall book. The USCO ultimately concluded that while the text and arrangement of it were sufficient for a copyright registration, they made sure to specify that the registration excluded any artwork generated by artificial intelligence.

While many entrepreneurs may just be using AI to generate images for a company logo and not necessarily an entire comic book, it is still imperative to understand the implications of these decisions: a logo that may have been otherwise able to obtain a trademark or copyright registration is disqualified if created with AI. That is not to say that such a logo would be impossible to use, but as more and more businesses turn to AI for these creative needs, there may be an influx of highly similar branding onto overlapping markets, resulting in consumer confusion between product and service source identifiers—which is already one of the biggest issues intellectual property registrations strive to combat.

Safeguarding art against AI use

On the flip side of this issue, creators are discovering that their artwork can be used as training data for artificial intelligence platforms. Generative AI ‘learns’ to create by looking at pre-existing work and then adjusting boundaries accordingly for queries by processing massive databases of text and images. This information is then used to create rules for the software, allowing it to respond appropriately when prompted. This suggests that some of the work that is flowing through this mechanism can be and likely is subject to some kind of intellectual property protection, carrying with it major legal implications. To avoid infringement upon another party’s intellectual property, some companies have gone the route of training their AI models only with content in which they already owned rights, limiting potential future conflict.

In Andersen v. Stability AI et al., three artists formed a class action suit against several AI platforms, alleging that their original work was being used to train AI in their specific artistic style, resulting in the capability of generating works riffing off of their own without license. While the case is still pending, the U.S. District Court for the Northern District of California is likely to find that images altered by generative AI are not automatically in violation of the Copyright Act as derivative works; this is not entirely unexpected, as rulings like this one were suspected to lean on interpretations of the fair use doctrine, which allows copyrighted work to be utilized without permission for various uses, including a transformative manner. Free vector hand drawn flat design npl illustration

While this arena still maintains an air of uncertainty, business owners and entrepreneurs looking to protect their intellectual property are encouraged to do so in an effort to mitigate risk and create a long-term protection plan. Individuals creating content or looking to safeguard their branding should police the marketplace to keep tabs on any potential infringers. At this time, responsibly maintaining trademark and copyright registrations is the best way to remain prepared to deal with infringers, whether they be AI-generated or not. Businesses undertaking transactions with AI platforms especially should require proper licensure for data, training or otherwise, as well as add disclosures for customers and partners alike regarding any use of AI.

Overall, it is unavoidable that artificial intelligence is here to stay; the path forward is best constructed by establishing how to best work with and around it, ensuring that all parties’ rights are preserved and creativity is respected, all while enjoying the distinct advantages that come with utilizing such unprecedented and far-reaching software. Advocates, creatives, and entrepreneurs alike must adjust to new industry realities facilitated by AI, and one of the best ways to do so is by establishing a robust intellectual property portfolio.

https://www.reuters.com/legal/legalindustry/protecting-artificial-intelligence-requires-arsenal-intellectual-property-laws-2023-03-31/

https://hbr.org/2023/04/generative-ai-has-an-intellectual-property-problem

https://www.msk.com/newsroom-alerts-Federal-Judge-Dismissive-of-AI-Complaint

Images: https://www.freepik.com/free-photos-vectors/artificial-intelligence-illustration

March 23, 2023Tessa Brandsema 3 Comments

When Less is More: Legal Implications of the Four-Day Work Week

American work culture is an international standout—and not always for good reason. For many, working within Corporate America comes with an all-or-nothing approach, bending over backwards for minimal thanks and bragging rights about who has taken the least amount of time off. Across the pond, this mentality is not subscribed to; rather, Europeans tend to emphasize and adhere to a healthy work-life balance, fully take maternity and paternity leave, and refrain from logging on to check work emails after hours. Recently, a new wave has taken over and carried its ripples over to American shores: the four-day work week. Studies have shown that employees who work four days per week without a cut in a pay report increased job satisfaction, higher productivity, and overall greater happiness. But what are the legal implications for such a drastic shift in the traditional work format? Can smaller companies and start-ups keep up with the trend?

Four days versus four days

The original concept of a four-day work week stems from the 100-80-100 rule: 100% of the employee’s pay for 80% of the hours while maintaining 100% of their original productivity. This brings the hours per work week to thirty-two, but the employee is still compensated the same as they were while working a 40-hour week. The intention is that employees use those thirty-two hours more efficiently because of their newly condensed timeframe. An immediate potential issue here is with employees’ benefits package: employers must ensure that working thirty-two hours per week does not disqualify their employees from any benefits they received on the contingent that they were working full-time. If, for example, an employee is dropped from their healthcare coverage because they are no longer working forty hours each week even though they are technically still full-time, this could violate an employment contract and raise a potential legal dispute regarding compensation. To avoid these issues, employers looking to implement a four-day work week in this model must ensure all the benefits currently provided to their employees are still available to them if hours are reduced.

Another model that is being adopted—and perhaps one that fits a little more seamlessly into American hustle culture—is a four-day work week in which the same hours are worked, just spread over longer days. For a traditional forty-hour week, that means employees need to work ten hours on each of the four days, while pay and benefits stay the same. Ten-hour days also pose a unique set of legal challenges for companies: will some employees need additional breaks throughout the day, especially minors or those with disabilities? Are all of the employees physically capable of working a longer day? It is crucial for a business to take these factors into consideration before implementing change to avoid alienating workers who may have challenges working a longer shift.

Unintended effects

One of the frequently overlooked consequences of the four-day work week is the unintentional discrimination it may cause. The traditional forty-hour work week was created around the concept of a nuclear family, in which one partner worked a full week outside of the home with the support of the other, who tended to all of the home and childcare needs. This idealistic concept is far from the current reality of most families: to stay afloat, many two-parent households require both adults to work, while single parents juggle similar childcare concerns. Daycare solutions may not provide care for the full duration of a ten-hour day, leaving child-rearing parents in a lurch with scheduling. If longer, ‘after hours’ childcare is available, it may be too costly for workers to afford.

Additionally, longer days may disproportionately affect employees with physical and mental health concerns. Working an additional two hours per day can disrupt medication schedules, overlap with physical therapy and doctor’s appointments, or cause scheduling conflicts with mental health counseling services. While a longer weekend may help to resolve some of these challenges, ability to actually complete a full ten-hour day may remain an obstacle for some employees. All of these factors can pose potential employment discrimination issues and may result in litigation.

Bringing on new employees

Many businesses that implement a four-day work week see an uptick in job applications, and many view the shortened week as mutually beneficial: workers get a longer weekend, and employers can enjoy a happier workforce with renewed productivity. Of course, if the business is just doing a trial run of the four-day work week, it is crucial for any onboarding employees to know that fact before they sign a new employment contract. These documents should specify that whether the shortened workweek is a permanent fixture of the business, as well as outline compensation details that may be affected by it. If the business chooses not to stick with a four-day week in the future, they do not want their employees to be blindsided by this decision, nor have a large influx of resignations should the company decide a short week is not the best fit.

If a company does elect to shift to a shortened week, it is imperative for the employee handbook to be updated to reflect that change. Any compensation or policy alterations that occur because of this change should be elaborated upon here as well to ensure employees are put on notice of the updates.

Overall, making the switch to a four-day work week is a change that should be considered seriously before implemented. The legal implications vary from issues found in labor and union law to potential employment discrimination, and it is important that the business take time to weigh these factors thoroughly. The four-day work week can boost morale, increase productivity, and make a company a better place to work—but only if executed thoughtfully.

https://www.siskinds.com/four-day-workweek-legal-issues-for-employers/

https://www.fisherphillips.com/news-insights/4-day-workweek-right-for-your-business.html

Image sources: https://www.theatlantic.com/family/archive/2021/06/kickstarter-four-day-workweek/619263/ & https://www.emburse.com/learn/blog/heres-how-much-a-4-day-work-week-saves-on-business-expenses

January 31, 2023Tessa Brandsema 3 Comments

Preventing Problems: A Trademark Guide

For many nascent entrepreneurs caught up in the many layers of starting their business, building an intellectual property portfolio is not at the top of their priority list. In light of fundraising capital, navigating the real estate market for the ideal property, and building initial inventory, thinking about intellectual property filings might stay on the back burner. However common this scenario may be, it is a mistake—one of the most critical elements of any business is its name (and subsequent branding!) and ensuring that your preferred name is both available and enforceable should be a main prerogative.

What’s in a name?

When you think about the marketplace giants that we interact with every day—like Apple, Amazon, and Google—you will notice that their names are concise, unique, and recognizable. Entrepreneurs brainstorming a name for their product or business should try to emulate this blueprint, and not just because it is a smart marketing strategy, but because these names are likely to be more easily trademarked.

A trademark is a form of intellectual property protection that can be used to protect a name, logo, slogan, or trade dress, and they are used to identify a source for a specific good or service. The goal of a trademark registration is to protect consumers from confusion by source identifiers that are too similar or are likely to be confused by the average customer. This preserves the integrity behind a brand and prevents third parties from being able to make a profit off the goodwill and quality associated with another’s products or services.

For example, the United States Patent & Trademark Office (also known as the USPTO) is almost certain to refuse a trademark application for a search engine called Gaggle. This is a rather obvious attempt by the applicant to align themselves with Google’s search engine and be associated with the goodwill already stored in their brand, therefore drawing in customers who may think that their product is associated with Google. Furthermore, Google could be harmed by this likelihood of confusion if Gaggle puts out a poor product, causing consumers who believe the two companies to be related to hold Google in a low regard as a result of this faulty new search engine.

On the other hand, trademarks that are identical but represent different goods and services are allowed to coexist on the federal register. Delta is a prime example of this: two large companies with the same name, but one is an airline, and the other makes appliances like kitchen sinks and faucets. The chance of a consumer mistaking the source of these goods or services with the other is incredibly low, and thus the two trademarks are permitted to coexist peacefully.

Performing a search

These nuances are important to keep in mind as an entrepreneur selecting a name for their new business. If you would like to explore what options might be taken already but have not yet retained an attorney to assist with your start up, you can go to the USPTO website and use their Trademark Electronic Search System (TESS) to research what trademarks exist and may conflict with the one you have selected. After all, why get attached to a name and make plans based upon it, only to later find out that it is not a viable option for your business and need to start over unnecessarily?

Keeping in mind that the USPTO may issue refusals based on multiple grounds, including but not limited to identicality, likelihood of confusion, phonetic equivalents, and foreign language translations, it may be in your best interest to have an intellectual property attorney help with your search. Many law firms utilize special trademark search engines that are not accessible by the public, and these searches are much more sophisticated than the one available on the USPTO website. These comprehensive results can give you a better understanding of your name’s likelihood of success if you choose to file a trademark application. While some entrepreneurs may balk at yet another cost in the beginning stages, ensuring that your ideal company or product name is both available and protectable is invaluable down the road.

Policing & prevention

Trademarks are not only useful because they allow the enforcement of rights in the event of an infringement, but they can act as a deterrent before that even occurs. Think back to the preliminary searches mentioned just a few moments ago; in the event you found a conflicting preexisting mark, what would your course of action be? When a unique and protectable name is the goal, a business owner is more inclined to shift gears and turn to an alternative name that is more likely to afford their company an enforceable registration with the USPTO. The same is likely to be true for other parties searching the register and coming across your trademark—rather than continuing on with the name they originally selected, they will steer clear of anything too close to yours in an effort to avoid any confusion or potential litigation.

While common law trademark rights can be established just through use, obtaining a federal registration has many benefits for the owner. A federally registered trademark puts the public on notice that rights are reserved within the mark, acting as a deterrent for potential infringers who stumble across it, whether that be through a search of the USPTO website or by seeing your mark with the ® symbol next to it. Trademarks work hard to protect your brand by proactively discouraging infringement from taking place, making them a worthwhile investment for any entrepreneur. Starting a business is hard enough as it is—make sure your investments and branding are safeguarded by a trademark registration that can provide some peace of mind.

Sources:

https://www.uspto.gov/trademarks/basics/what-trademark

Chad Jalandoni, How to Conduct a Proper Trademark Search, Gerben Intellectual Property, https://www.gerbenlaw.com/blog/how-to-conduct-a-proper-trademark-search/.

Images: https://www.redpoints.com/blog/how-to-do-a-trademark-search-and-why/ & https://bonamark.com/