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OpenAI promises to fund legal costs for ChatGPT users sued over copyright

OpenAI joins Google, Microsoft and others in legally backing their users if they face legal action over copyright infringement.

OpenAI says it will cover the legal costs for business-tier ChatGPT users that find themselves in hot water over copyright infringement.

OpenAI is calling its pledge Copyright Shield which only covers users of its business-tier ChatGPT Enterprise and its developer platform. OpenAI isn’t covering users of the free and Plus ChatGPT versions.

On Nov. 6 at the company’s first developer conference DevDay, OpenAI CEO Sam Altman said “we will step in and defend our customers and pay the costs incurred if you face legal claims around copyright infringement and this applies both to ChatGPT Enterprise and the API.”

Altman at OpenAI’s DevDay introducing its legal protection offer Copyright Shield. Source: YouTube

OpenAI joins tech firms Microsoft, Amazon and Google in offering to legally back users accused of copyright infringement. Adobe and Shutterstock — stock image providers with generative AI offerings — also made the same promise.

OpenAI’s DevDay also saw the firm announce that users can soon create custom ChatGPT models with the option to sell them on an upcoming app store along with a new and updated AI model dubbed ChatGPT-4 Turbo.

Related: AI chatbots are illegally ripping off copyrighted news, says media group

OpenAI is facing a litany of suits alleging it used copyrighted material to train its AI models.

Comedian and author Sarah Silverman, along with two others, sued OpenAI in July claiming ChatGPT’s training data includes their copyrighted work accessed from illegal online libraries.

OpenAI was hit with at least two further suits in September. A class action alleged OpenAI and Microsoft of using stolen private information to train models while the Author’s Guild sued OpenAI alleging “systematic theft” of copyrighted material.

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US judge deals blow to artists in copyright suit over AI generated art

A judge mostly sided with Midjourney, DeviantArt and Stability AI’s bid to dismiss the artists’ class action lawsuit that accused the firms of copyright infringement.

Artists have been dealt a setback in their copyright fight against generative AI firms after a class-action lawsuit against several of the firms was dismissed by a United States judge, citing a lack of evidence.

In an Oct. 30 order, California District Court Judge William Orrick said the copyright infringement suit against generative AI image service Midjourney, art platform DeviantArt and AI firm Stability AI was “defective in numerous respects,” granting earlier dismissal bids from the firms.

Judge Orrick however allowed a copyright infringement claim from one class action member against Stability to go ahead and allowed the class 30 days to attempt to submit an amended suit with more proof.

“Even Stability recognizes that determination of the truth of these allegations — whether copying in violation of the Copyright Act occurred in the context of training Stable Diffusion or occurs when Stable Diffusion is run — cannot be resolved at this juncture,” Orrick wrote.

Highlighted excerpt of Orrick’s conclusive order. Source: CourtListener

The lawsuit was first filed in mid-January and claimed Stability’s AI model Stable Diffusion scraped billions of copyrighted images without permission — including those of the artists — to train the software.

DeviantArt also incorporated Stable Diffusion on its site, possibly copying millions of images from there without a license and violating its own terms of service, the suit alleged.

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Orrick said the AI-generated images likely don’t infringe the artists’ copyright as it’s “not plausible” they’re derived from copyrighted images. He added he’s “not convinced” unless the class can show the generated images are similar to the artists’ work.

Copyright claims from some class members were dismissed as their images weren’t registered with the Copyright Office — needed for bringing a copyright infringement suit.

Copyright infringement allegations are central to similar legal actions taken against AI firms such as the Author’s Guild’s class action against OpenAI, Universal Music Group’s suit against Anthropic and Getty Images suits against Stability AI in the U.S. and United Kingdom.

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Ryder Ripps ordered to pay Yuga Labs $1.6M in copyright lawsuit

The NFT artists were also ordered to cover Yuga Labs’ legal fees after determining the trademark infringement constituted an “exceptional case.”

A United States district court judge has ordered nonfungible token (NFT) artists Ryder Ripps and Jeremy Cahen to pay Bored Ape Yacht Club creator Yuga Labs a total of $1.57 million in disgorgement and damages, along with legal fees, bringing an end to the long-running “copycat” NFT lawsuit.

The Oct. 25 order follows an April 21 partial summary judgement granted in favor of Yuga Labs after the firm claimed that Ripps and Cahen, the defendants, violated copyright laws by making copycat versions of its Bored Ape Yacht Club (BAYC) collectibles.

District court Judge John Walter awarded Yuga Labs $1.37 million after concluding the NFT firm was entitled to a disgorgement of the defendants’ profits. An additional $200,000 was awarded in statutory damages relating to cybersquatting violations.

Yuga Labs has also been entitled to recover attorney fees and costs from the NFT artists after the judge determined the trademark infringement constituted an “exceptional case.”

“A trademark case is generally considered exceptional for purposes of awarding of attorneys’ fees when a party has taken positions that can be characterized as “malicious, fraudulent, deliberate or willful,” the judge noted.

Judge Walter also knocked back the defendants’ argument that the copycat BAYC versions were “satire” and “parody” — ruling that the defendants intentionally infringed Yuga’s BAYC trademarks with a bad faith intent to profit from them.

He also noted the defendants continued to market and promote their copycat BAYC versions after the partial summary judgement was delivered against them in April.

Yuga Labs filed the lawsuit against the two artists in June 2022.

In an Oct. 16 hearing in a United States appeals court, Ripps and Cahen’s lawyers tried to argue the lawsuit should be thrown out on the grounds of free speech under California’s anti-SLAPP statute. However, the three-judge panel didn’t appear persuaded by the lawyer’s arguments.

Related: NFTs aren’t dead — they’re just resting

BAYC is one of the most valuable NFT collectibles on NFT marketplace OpenSea.

BAYC collectibles currently listed on OpenSea. Source: OpenSea

Since April 2021, it has amassed 1.32 million Ether (ETH) or $2.38 billion in trading volume with an average floor price of 27.4 ETH ($49,200), according to OpenSea.

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Trader Joe’s grocery store files trademark lawsuit against Trader Joe DEX

The claims include allegations of federal trademark infringement and dilution, with Trader Joe allegedly capitalizing on the store’s “name, goodwill, and brand recognition.”

Lawyers representing United States supermarket chain Trader Joe’s have filed a complaint in California against decentralized exchange Trader Joe.

In an Oct. 5 filing in the U.S. District Court for the Central District of California, Trader Joe’s sued Trader Joe and its co-founder Cheng Chieh Liu over federal trademark infringement and dilution claims. According to the lawsuit, Trader Joe and Liu used many of the supermarket’s ideas, from “donning a red cap” — red features prominently in the store’s branding — to its narrative for one of the platform’s fictionalized characters.

“Defendants committed fraud to obscure that origin story and to prevail in international legal proceedings with Trader Joe’s over the domain name, recognizing that the true story would doom their case and any plausible claim of right to use the traderjoexyz.com domain,” reads the lawsuit. 

Trader Joe’s location in Austin, Texas. Source: Cointelegraph

“Trader Joe’s sent Defendants cease-and-desist letters demanding that they stop using the ‘Trader Joe’ name,” says the lawsuit. “Well after Trader Joe’s demanded that they stop, Defendants continued capitalizing on Trader Joe’s name, goodwill, and brand recognition — built up through Trader Joe’s investment across more than half a century — to peddle their own goods and services.”

The store’s lawyers point to Trader Joe using “confusingly similar” names on the exchange’s website, YouTube page, Reddit, GitHub, LinkedIn, Substack, CoinMarketCap, Telegram and Discord. Within the content of some of these accounts, according to the lawsuit, Trader Joe using the possessive form of its name — i.e. “Trader Joe’s” — matched the supermarket chain’s “exact word mark” registered as a trademark.

“Most courts use like seven or eight different factors to assess and make a determination as to whether there’s infringement in a given case,” trademark and copyright lawyer Michael Keyes told Cointelegraph. “The relatedness of the goods is just one of the factors. [...] One is the similarity of the marks. Here you’ve got Trader Joe’s and Trader Joe. For all intents and purposes, they’re identical, at least in terms of how they sound.”

Keyes added that he believes Trader Joe’s had a stronger case, as the business had a recognizable brand in the U.S., which could result in an injunction against Trader Joe forcing the platform to stop using its name. According to the attorney, the dilution claim in the case could also be something to watch out for, as it tends to focus on protecting famous recognizable brands.

“I think both claims are pretty strong. I think dilution is probably stronger. [...] For dilution, you don’t have to show that the goods are related. The caveat being that in order to have a claim for dilution, you need to show that your trademark is truly famous, which means widespread recognition among U.S. consumers.”

Related: Trader Joe joins top 5 DEX list as Liquidity Book model thrives on Arbitrum

Lawsuits involving trademark infringement between crypto firms and companies operating in a completely different sector do arise from time to time. In 2021, major U.S. fast food chain Jack in the Box sued crypto exchange FTX US — currently in the middle of bankruptcy proceedings — over alleged similarities between its “Moon Man” character and the firm’s “Jack” mascot.

Trader Joe's opened its first store in California in 1967 and has more than 500 locations around the United States. In contrast, Trader Joe is one of the top-ranked decentralized exchanges in the crypto space, allowing liquidity providers to add liquidity in designated “price bins” to improve capital efficiency. Cointelegraph reached out to Trader Joe for comment but did not receive a response at the time of publication. 

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China to Crack Down on Copyright Infringement Through NFTs

China to Crack Down on Copyright Infringement Through NFTsAuthorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online […]

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NFTs and intellectual property, explained

When you buy a nonfungible token, do you automatically get intellectual property rights? Well… it's complicated.

How can IP assets transform DeFi, DAOs and the metaverse?

InvArch says that its infrastructure can be used to speedily create new decentralized autonomous organizations.

This could make it easier for nonprofits to fund intellectual property development — and organizations could generate cashflow without signing over their IP rights. It's hoped roadblocks to innovation could be torn down — with a new "development highway" left in its place.

InvArch's infrastructure could also offer greater protections to those who are building ambitiously on virtual plots of land in the metaverse — and unlock whole new business opportunities over in the world of DeFi. 

The project won the 43rd Kusama parachain auction — and at the end of June, it unveiled technology that will make everything from music to code "all but impossible to steal." What's more, this will strike at the heart of centralization in the world of IP, not least because seeking protection through InvArch is vastly cheaper than the status quo.

Learn more about InvArch

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

Could smart contracts be used for IP agreements?

Yes — business deals could be brought into the 21st century with the help of blockchain.

InvArch's goal is to ensure that those who hold the most desirable NFTs — including CryptoPunks, Bored Apes and Meebits, can establish on-chain agreements that extend to use of their nonfungible tokens in a third-party product.

Setting out its vision in a recent blog post, the project added: "In the end, you have a marketplace where communities can buy swag and products relevant to their interests — and a market where artists and NFT copyright owners can establish lucrative income streams from their NFTs and increase the raw value of their digital assets."

How can NFT and Web3 protocols help transfer IP rights?

The 21st century has turned into an IP war zone and an innovation graveyard — but things are beginning to change.

New and enhanced NFT classes have the potential to certify the authenticity of nonfungible assets, protect their uniqueness, and streamline management rights.

This approach is being championed by InvArch — an IP rights blockchain that is scalable, interoperable and has ambitions to be integrated throughout the Web3 world. An Invention, Involvement, Inventory and Investment protocol (known as INV4) delivers piracy-proof files as well as on-chain copyright and licensing.

Setting out one potential use case for how its approach could transform the creative sector, the project paints a picture where decentralized music studios and record labels can flourish — with individual artists contributing distinctive elements. They could then be brought together to form a song with a plethora of beats and rifts — with each contributor retaining their IP, jointly owning the rights to the track, and sharing a piece of the royalties.

Which NFT collections have given IP rights to owners?

Some of the biggest NFT collections out there right now — Bored Ape Yacht Club among them — have given full intellectual property rights to users.

This is a significant (and you could argue a very generous) development. It effectively means that those who own Bored Ape NFTs have the potential to profit from them. We've seen Eminem and Snoop Dogg team up for a new music video where they transform into their characters. Meanwhile, sites have emerged where collectors can effectively hire out their ape's NFT to brands.

As we alluded to earlier, the actor Seth Green made a splash when he unveiled plans to create a TV show themed around his Bored Ape NFT, which he affectionately calls Fred, called White Horse Tavern. Green's beloved collectible ended up being stolen in a phishing attack, and he ended up paying over the odds to get it back. 

BAYC's license states those who purchase NFTs "own the underlying Bored Ape, the Art, completely" — but doesn't actually mention what happens in cases of theft. Many experts believed that Green would have been on firm legal ground if he released the TV show without the NFT, but there are no guarantees.

When you buy an NFT, do I automatically get IP rights?

The short answer to this is no. It's important to read the small print to find out exactly what you're getting.

Let's run through some quick examples. Jack Dorsey sold off his first tweet in NFT form for a whopping $2.9 million back in March 2021. While there's little doubt this is a historic piece of content, crypto entrepreneur Sina Estavi doesn't own the IP to this tweet. All copyright still rests with Dorsey.

The New York Times pulled off a tongue-in-cheek stunt when it published an article about crypto collectibles — and then gave readers the chance to own a tokenized version of the story. It ended up selling for a whopping 350 ETH — worth $560,000 at the time, and about $600,000 as of the start of August 2022. Although this NFT did come with some perks (the buyer was given the chance to be named and photographed in a subsequent piece,) it didn't include the copyright to the article… or any reproduction or syndication rights.

Potential pitfalls don't end here, either. MetaBirkins have become especially popular during the NFT boom — a digital remake of Hermes' famous bags. But digital artist Mason Rothschild ended up in hot water with the designer brand, which took legal action after claiming it could cause confusion in the eyes of consumers.

What are intellectual property rights?

In its simplest form, intellectual property relates to something you create with your mind — such as artwork, literature and inventions.

These protections were relatively easy to enforce in the analog era, but our digital world — where copying and pasting runs abound as millions of people create their own content — makes things especially challenging.

Nonfungible tokens are a thrilling development that have the power to modernize everything from baseball cards to music albums, from movie merchandise to stunning art. But, as with any new technology, there are issues that need to be overcome.

The industry's still getting to grips with the rights that are afforded to the owners of an NFT, and there are other threats that need to be addressed. If a nonfungible token is stolen by a malicious actor, does the victim still enjoy IP rights? And how can we counter the risk of copycat NFTs being minted on a rival blockchain?

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CryptoPunks community reacts to the ongoing copyright battle between V1 and V2

Although the collection is no longer deemed authentic by Larva Labs, its creators alleged sold 210 ETH worth of CryptoPunks V1 when the wrapped versions first gained traction.

During its initial release, 10,000 CryptoPunks were sold and made it to the secondary market before users discovered a critical smart contract exploit that made it possible for Punks' buyers to withdraw their Ether (ETH) post-purchase. As a result, creator Larva Labs withdrew recognition of the V1 collection, fixed the exploit, and released the V2 Punks collection we have now. Though, they've also sent mixed messages about the collection by selling off dozens of their own V1 Punks.

The battle over the copyright of the CryptoPunks V1 collection is heating up as the images recently gained in market value, with Larva Labs filing a DMCA take-down notice to OpenSea and members of the V1 community striking back with their own. To complicate the matter, Larva Labs purposefully coded the smart contract to be irrevocable, and one collection (V1) could not have been destroyed without also eliminating the other (V2). The topic remains deeply controversial within both communities.

With the help of CryptoPunks V1's community admin, @irishnftgal, Cointelegraph spoke to Brittany Kaiser, co-founder of Own Your Data. In late Jan 2022, Brittany bought a v1 CryptoPunk on OpenSea, which she believes is a "true piece of NFT history" produced by Larva Labs as one of the first punks avatars:

"I was excited to hear that a group of crypto activists and brilliant developers, some of who call themselves "NFT archaeologists," decided to build an ERC-721 wrapper to make the original V1 CryptoPunks token contract tradable on modern NFT marketplaces."

According to Brittany, she was "shocked and dismayed" to discover that after Larva Labs profited from selling about 40 wrapped CryptoPunks V1 on Opensea for 210 ETH, its creators allegedly turned around. Instead, they took deliberate action to undermine the authenticity and traceability of the very same CryptoPunks V1 collection. "The founders have said publicly for years that these tokens are part of the original," says Brittany.

Brittany thinks the best outcome for Larva Labs would be to "take responsibility and ownership of these blockchain assets" that they put on the market. "Revoking the DCMA would be a good start, and a public apology would be even better," she says.

Efforts from the V1 community to make themselves heard have fallen on deaf ears among many members of the V2 community. In its official Discord, user lookinrare#0911 wrote:

"I mean, we can call them a gamble, but at the end we always knew V1 [punk] were not legit punks; they were simply artifacts that led to the creation of punks. So they have a place in history, but I doubt that place is worth 1k ETH, lol."

Another user, OG!#8654, wrote:

"I think Larva Labs should aggressively attack with litigation. V1s have been suffering ever since. Their floor price is down to 9 ETH, and hardly anyone is talking about them anymore. I do think the misinformation issue has taken another wrong step now. They changed their name to 'CryptoPunks V1' from 'Wrapped V1 CryptoPunks'. This is a blatant attempt to mislead people."

Issues regarding the authenticity of the collection aren't simply about the philosophy of NFTs; they have ample financial consequences. On the one hand, efforts to delegitimize the V1 collection have, in the past, caused their floor prices to fall, leading to devastating losses among V1 owners. But on the other hand, legitimizing the V1 collection would suddenly increase the total supply of CryptoPunks from 10,000 to 20,000. This would decrease their scarcity and potentially cause the price of V2 punks to decline, albeit to the joy of V1 punk owners, who will potentially see the price of their NFTs increase due to newfound recognition.

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Alibaba’s NFT Marketplace Allows Content Creators to Copyright Work via Blockchain IP Service: Report

Alibaba’s NFT Marketplace Allows Content Creators to Copyright Work via Blockchain IP Service: ReportThe Chinese multinational technology giant, Alibaba Group, has launched a non-fungible token (NFT) marketplace. According to regional reports, the Alibaba NFT platform not only provides customers with the ability to purchase and sell NFTs, but the marketplace also allows people to license and sell intellectual property (IP), as it is copyrighted by blockchain technology. Alibaba’s […]

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Alibaba launches NFT marketplace for copyright trading

Alibaba has launched a new marketplace allowing trademark holders to sell NFT representing licenses to their copyright.

Chinese multinational e-commerce firm, Alibaba Group Holding, has launched a new nonfungible tokens (NFTs) marketplace allowing trademark holders to sell tokenized licenses to their intellectual property.

The new NFT marketplace, dubbed “Blockchain Digital Copyright and Asset-Trade,” can be accessed via Alibaba's Auction platform. NFTs launched via the platform will be issued on the “New Copyright Blockchain” — a distributed ledger technology platform centrally operated by the Sichuan Blockchain Association Copyright Committee.

According to an Aug. 17 report from the Alibaba-owned news publication, South China Morning Post (SCMP), the marketplace hopes to target writers, musicians, artists, and game developers.

The marketplace is already live, hosting several NFTs that are set to be auctioned next month. Bidders must post a deposit of 500 yuan (roughly $77) to participate in auctions. Each upcoming auction has set a reserve price of $15 each.

Buyers can view their collections via crypto portfolio application, Bit Universe, which is integrated into WeChat.

Commenting on the new marketplace, SCMP reporter Josh Ye tweeted that “although the technology itself does not prevent unauthorised copying. Sales include complete ownership of works purchased through the platform.”

Many NFTs on display do not articulate what rights are afforded to purchasers, with one NFT even appearing to depict unlicensed Star Wars fan art.

Related: Musician sells rights to deepfake her voice using NFTs

While this is Alibaba’s biggest NFT announcement to date, many of the firm’s subsidiaries have are already embracing nonfungible tokens.

In July, Cointelegraph reported that Alibaba-owned e-commerce platform Taobao showcased NFTs for the first time in its annual Maker Festival celebrating Chinese art and entrepreneurship. The event hosted the sale of NFT-based real estate created by Chinese artist, Huang Heshan.

In the same month, SCMP launched an NFT project named ‘ARTIFACT’ which included tokenized historical moments reported by the publication from its 118- year-old archive, such as the handover of Hong Kong from the U.K. to China in 1997.

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