In Part 1 of this article, I addressed various legal issues that can arise with AI-based code generators. Many of these problems stem from using open source to train the models and the compliance obligations imposed by the...more
While you were asking ChatGPT to create a 3-course menu for the upcoming book club you’re hosting or to explain the Rule Against Perpetuities, several federal government agencies announced initiatives related to the use of...more
5/1/2023
/ Artificial Intelligence ,
Automated Systems ,
Bots ,
Consumer Financial Protection Bureau (CFPB) ,
Copyright ,
Department of Justice (DOJ) ,
Equal Employment Opportunity Commission (EEOC) ,
Federal Trade Commission (FTC) ,
Infringement ,
Machine Learning ,
NIST ,
Open Source Software ,
Patents ,
Rule Against Perpetuities ,
Technology Sector
AI-based code generators are a powerful application of generative AI. These tools leverage AI to assist code developers by using AI models to auto-complete or suggest code based on developer inputs or tests. These tools raise...more
Recent patent cases have made it more difficult to obtain utility patent protection for some of the functional aspects of computer software. One way to, at least partially, overcome this is to consider design patent...more
Generative AI (GAI) applications have raised numerous copyright issues. These issues include whether the training of GAI models constitute infringement or is permitted under fair use, who is liable if the output infringes...more
The National Telecommunications and Information Administration (NTIA) has issued a Request for Comments (RFC) on Artificial Intelligence (“AI”) system accountability measures and policies to advance its efforts to ensure AI...more
The Court of Appeals for the Federal Circuit (CAFC) affirmed a district court ruling that the asserted nonliteral elements of a software program were not copyright protectable, in part, because allegedly copied materials...more
Scanning books to create a searchable database of books constitutes fair use. Scanning books to create eBooks does not. Will scanning images (or other copyright-protected content) to create a generative AI model for use in...more
On March 16, 2023, the U. S. Copyright Office (USCO) launched a new AI Initiative to examine the copyright law and policy issues raised by artificial intelligence (AI), including the scope of copyright in works generated...more
The U.S. Copyright Office (“Office”) has published guidance on its policy and practices for examining and registering works that contain material generated by the use of artificial intelligence technology...more
Roblox recently announced that it is working on generative artificial intelligence (AI) tools that will help developers who build experiences on Roblox, to more easily create games and assets. The first two test tools create...more
The rapid rise of AI used with advertising, marketing and other consumer facing applications has caused the FTC to continue to take notice and issues guidance. For example, the FTC is concerned about false or unsubstantiated...more
Despite the minimal regulatory enforcement actions against blockchain game companies and NFT issuers, now is NOT the time to become complacent about regulatory issues. As indicated below, many U.S. agencies are increasing...more
1/17/2023
/ Blockchain ,
Celebrity Endorsements ,
Consumer Protection Laws ,
Cryptocurrency ,
Digital Currency ,
Insider Trading ,
Intellectual Property Protection ,
Money Laundering ,
Non-Fungible Tokens (NFTs) ,
Office of Foreign Assets Control (OFAC) ,
Regulatory Agenda ,
Sanctions ,
Securities ,
Securities and Exchange Commission (SEC) ,
Taxation
We have previously posted about the SEC lawsuit against LBRY. In that post, we noted that while the crypto community is rightfully focused on the Ripple case to see how the SEC will fare in court on enforcements alleging...more
We previously blogged about the NFT insider trading case against Nathaniel Chastain. He was charged with wire fraud and money laundering in connection with a scheme to commit “insider trading” in Non-Fungible Tokens (“NFTs”)...more
On Monday, October 24, 2022, the Department of Justice (DOJ) announced charges against two alleged Chinese intelligence officers for bribing and stealing documents to obstruct the criminal investigation of, reportedly, Huawei...more
The rising prevalence of crypto and virtual currencies has invited the scrutiny of several regulatory bodies who continue to grapple with the unique challenges posed by blockchain technology, FinCEN being one prime example....more
10/4/2022
/ Bank Secrecy Act ,
Blockchain ,
California ,
Cryptocurrency ,
Financial Crimes ,
Financial Regulatory Agencies ,
FinCEN ,
In-Game Purchases ,
Money Laundering ,
Money Transmission Act ,
Non-Fungible Tokens (NFTs) ,
Popular ,
Software Developers ,
Virtual Currency
U.S. state and federal lawmakers, as well as federal regulators, are increasingly focusing on the role of blockchain and distributed ledger technology (“DLT”) in ongoing efforts to combat climate change and to facilitate the...more
We have previously addressed the recent indictment against Nathaniel Chastain, a former executive of a major NFT marketplace, for insider trading involving NFTs. The indictment charges Chastain with one count of wire fraud...more
It is well known that insider trading—the practice of buying and selling stocks, bonds, or other securities based on material, non-public information—is unlawful. For that reason, many companies have compliance programs and...more
For quite some time, we have been advising that marketplaces and NFT/crypto issuers consider developing an insider trading policy. The SEC is now investigating this issue. If you do not have a policy this is a good time to do...more
A class action lawsuit filed by users of a decentralized finance (“DeFi”) protocol managed by a decentralized autonomous organization, or “DAO,” may shed light on the potential legal liabilities of a DAO and its...more
The National Football League has announced a partnership with Mythical Games to create a blockchain video game called NFL Rivals. The game will use unique, generative 3D NFL franchise-themed NFTs and let players act as a...more
The United States Attorney for the Southern District of New York and the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment...more
While the crypto community is rightfully focused on the Ripple case to see how the SEC will fare in court on enforcements alleging cryptocurrency offerings are a security, a lesser-known case may provide clarity first. The...more
6/1/2022
/ Blockchain ,
Cryptocurrency ,
Digital Assets ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Investment ,
Investors ,
Motion for Judgment ,
Motion To Intervene ,
Securities ,
Securities and Exchange Commission (SEC) ,
Summary Judgment ,
Token Sales ,
Unregistered Securities