The United States Patent and Trademark Office (“USPTO”) and the United States Copyright Office (“USCO”) delivered a report to Congress entitled Non-Fungible Tokens and Intellectual Property on March 12, 2024 (“Report”). While the Report is comprehensive, it does not recommend any new action to address IP issues with NFTs. The Report looked at: i) current and future applications of non-fungible tokens (“NFTs”); ii) how intellectual property laws apply to NFTs and assets associated with NFTs; iii) intellectual property-related challenges arising from the use of NFTs; and iv) potential ways to us ..read more

On December 13, 2023, CoinList Markets LLC (“CoinList”) agreed to pay $1,207,830 pursuant to a settlement agreement with the Office of Foreign Assets Controls (“OFAC”) in connection with allegations that the San Francisco based virtual currency exchange violated OFAC’s Russia/Ukraine sanctions by allowing users in Crimea, an embargoed country, to open accounts on its platform. According to OFAC’s enforcement release, CoinList’s screening procedures failed to identify 89 instances where users specified “Russia” as their country of residence but provided addresses in Crimea upon account ope ..read more

The U.S. authorities are increasingly taking actions against big-name crypto mixers for potential violations of sanctions regulations. On November 29, 2023, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) sanctioned Sinbad.io (“Sinbad”), which is a virtual currency mixer. As a result, U.S. persons are generally prohibited from dealings involving Sinbad or its property interests. Virtual currency mixers are anonymized software tools that allow users to conceal the source or owner of digital assets. According to OFAC’s press release, Sinbad processed millions of ..read more

The USPTO has prepared soon to be published supplemental guidance for design patent examination for computer-generated electronic images. This guidance relates to determining whether a design patent claim including a computer-generated electronic image per se or a computer-generated electronic image shown on a display panel (e.g., computer screen, monitor, computer display system, mobile phone screen, virtual reality/augmented reality goggles), or a portion thereof, satisfies the article of manufacture requirement in 35 U.S.C. 171. This guidance supplements the guidance provided in section 150 ..read more

The USPTO has announced that the 1 millionth design patent was just issued. The USPTO grants design patents for new, original, and ornamental designs for an article of manufacture. Protecting the way something looks, as opposed to how it works (covered by a utility patent), is a vital step for many small businesses. One of the factors leading up to this milestone is the increase in design patents for computer generated icons and certain aspects of the graphical user interface (GUI) elements of a computer program. A relatively recent Supreme Court decision has made it more difficult to obt ..read more

The rapid growth of generative AI (GAI) has taken the world by storm. The uses of GAI are many as are the legal issues. If your employees are using GAI, they may be subjecting your company to many unwanted and potentially unnecessary legal issues. Some companies are just saying no to employee use of AI. That is reminiscent of how some companies “managed” open source software use by employees years ago. Banning use of valuable technology is a “safer” approach, but prevents a company from obtaining the many benefits of that technology. For many of the GAI-related legal issues, there are ways to ..read more

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 at least three types of potential legal issues: Does training AI models using open source code constitutes infringement or, even if the use is licensed, does doing so require compliance with conditions or restrictions of the open source licenses? Does using the output of an AI code generator subject the developer to infringement claims? Does use of AI-generated code by d ..read more

Valve has reportedly adopted a policy to reject games that use AI-generated content over infringement concerns. A developer posted on the “aigamedev” subreddit that in response to submitting a game with some assets that were obviously AI-generated, he received a rejection notice from Valve stating: While we strive to ship most titles submitted to us, we cannot ship games for which the developer does not have all of the necessary rights. After reviewing, we have identified intellectual property in [Game] which appears to belong to one or more third parties. In particular, [Game] contains a ..read more

The Federal Trade Commission (FTC) has been active in enforcements involving various AI-related issues. For an example, see Training AI Models – Just Because It’s “Your” Data Doesn’t Mean You Can Use It and You Don’t Need a Machine to Predict What the FTC Might Do About Unsupported AI Claims. The FTC has also issued a report to Congress (Report) warning about various AI issues. The Report outlines significant concerns that AI tools can be inaccurate, biased, and discriminatory by design and can incentivize relying on increasingly invasive forms of commercial surveillance. Most recently, the FT ..read more

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 at least three types of potential legal issues: Does training AI models using open source code constitutes infringement or, even if the use is licensed, does doing so require compliance with conditions or restrictions of the open source licenses? Does using the output of an AI code generator subject the developer to infringement claims? Does use of AI-generated code by de ..read more