THIS WEEK: The streaming wars arrive in South Park, California stands up to AI, and what part of AI-generated art is the actual art. PLUS, pandemic-era lawyers may need to boost their experience, and the Texas Two-Step continues to unravel.

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👑 Content Is King

The streaming wars are heating up—and they might end up killing Kenny (sorry, we had to). Warner Brothers Discovery, the newly formed media behemoth that was spun off from AT&T, is suing Paramount Global (previously known as CBS Viacom) over South Park streaming rights. According to CNBC, Warner paid $500 million in 2019 for the rights to license the long-running show and stream in on HBOMax. During the bidding process, Paramount requested to share rights to the show so that Paramount could also stream South Park on its platform. WBD says it rejected the proposal, and then alleges Paramount withheld special content as a result. As Variety notes, WBD accuses Paramount of engaging in "'verbal trickery' and 'grammatical sleight-of-hand,' characterizing the new content as 'movies,' 'films' or 'events' — but not 'episodes' — to avoid its obligations under the 2019 agreement."

• Paramount wrote in a statement: “We believe these claims are without merit and look forward to demonstrating so through the legal process… We also note that Paramount continues to adhere to the parties’ contract by delivering new South Park episodes to HBO Max, despite the fact that Warner Bros. Discovery has failed and refused to pay license fees that it owes to Paramount for episodes that have already been delivered, and which HBO Max continues to stream.” 

• WBD responded in a statement that "Paramount and South Park Digital Studios embarked on a multi-year scheme of unfair trade practices and deception, flagrantly and repeatedly breaching our contract, which clearly gave HBO Max exclusive streaming rights to the existing library and new content from the popular animated comedy South Park.”

Ctrl+Library+Delete

Studios and streamers can withhold content from audiences, not just from each other. As The Hollywood Reporter says, streamers are pulling old TV series and films from their libraries (and even canning finished films!) to save money. "Entertainment companies have been forced to contend with consolidation, inflation, a possible recession and a constant chase for subscribers," The Hollywood Reporter continues. Streamers can "save money from not having to pay residuals to certain profit participants and talent associated with the shows if the shows were not exhibited on the streaming service,” entertainment journalist Matt Belloni recently told Marketplace.

The Verdict

Even streamers are penny-pinching these days. But as platforms compete for content and shuffle their libraries, it’ll set up some interesting future scenarios in which potential mergers and/or consolidation makes bedfellows of current litigants.

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🤖 Overruling AI

It feels like only last week we were hearing about ChatGPT for the first time. Suddenly, Silicon Valley giants are in a battle for survival to win AI dominance. The speed of technology today, I guess. And when it comes to the speed of legislating, California tends to move faster than the federal government (or other states, for that matter). So, it should come as no surprise that California state legislators have begun looking at AI and its role in both digital privacy matters and hiring practices, reports Bloomberg Law. 

• AI has "got the great ability to make decisions based on data that it has, but nobody knows what’s in that black box. We need to have our eyes wide open about the power of this, and make sure that it’s here to help people and not inadvertently injure consumers," State Senator Bill Dodd said regarding his bill (SB313), which would create a state agency to oversee AI. 

• State Assemblywoman Rebecca Bauer-Kahan has introduced her own bill (AB331) that would regulate how the state's government uses AI. 

• “There’s a focus on accountability; of those who are developing the algorithms …California is trying to find a path to merge accountability with employers and by focusing in on assessing the actual algorithm that you use,” Gary Friedman, a senior partner at Weil, Gotshal & Manges, told Bloomberg about the various bills.

Snap Judgement

Social media company Snap Inc announced this week that it will be integrating ChatGPT into its Snapchat platform. “The big idea is that in addition to talking to our friends and family every day, we’re going to talk to AI every day,” CEO Evan Spiegel told The Verge. “And this is something we’re well positioned to do as a messaging service.” However, the company also cautioned soon-to-be users that "All conversations with My AI will be stored and may be reviewed to improve the product experience. Please do not share any secrets with My AI and do not rely on it for advice," according to a press release. Snap further cautioned that "While My AI is designed to avoid biased, incorrect, harmful, or misleading information, mistakes may occur."

The Verdict

As AI becomes evermore integrated into our lives, its clear that strict regulation will need to stay on top of the technology and protect potential data leaks and other concerns. Are state politicians up to the task of properly designing legislation? Will see.

🎨 Who Can Copyright What?

Last year, Kristina Kashtanova submitted her comic book Zarya of the Dawn to the US Copyright Office and was granted copyright protection. However, in a letter Kashtanova received earlier this month, the protection was partially revoked. "[T]he images in the Work that were generated by the Midjourney technology are not the product of human authorship," the Office stated in the letter. "Because the current registration for the Work does not disclaim its Midjourney-generated content, we intend to cancel the original certificate issued to Ms. Kashtanova and issue a new one covering only the expressive material that she created."  

• "There are a number of errors with the Office’s arguments, some legal and some factual," Van Lindberg, Kashtanova's attorney wrote in an extensive blog post. "However, they all seem to stem from a core factual misunderstanding of the role that randomness plays in Midjourney’s image generation.”

• "It is fundamental to understand that the output of a Generative AI model depends directly on the creative input of the artist and is not random," Kashtanova wrote herself in an Instagram post.

Legal Precedence

As Reason.com notes, a 1997 decision by the 9th Circuit Court of Appeals in the case of Urantia Foundation v. Maaherra ruled that "some element of human creativity must have occurred in order for" something to be copyrightable. Yet, according to Ars Technica, Michael Noll of Bell Labs was able to copyright an AI-generated image of his in 1965 "on the premise that the machine created the image using an algorithm that Noll wrote." To bring it to the modern-day, however, Ars Technica adds that Getty Images does not allow AI-generated images on its site "over unresolved issues about copyright and ethics issues."

The Verdict

Week after week, we write about AI and copyright for this newsletter and we are beginning to understand that technology has rapidly outpaced our laws. So will AI-generated art be viewed as an artist’s tool (like a paintbrush or camera) in the years to come, or a whole separate category of IP? This is the central question we face today.

📤 What Else We’re Forwarding

Understaffed: Are pandemic-era lawyers undertrained? Law.com asks if junior lawyers have not had significant exposure to a variety of cases and lack sufficient mentoring from in-office colleagues who have been mostly remote since the pandemic began.

Two-Step Undone: With the 3rd Circuit Court of Appeals’s invalidation of Johnson & Johnson's recent Texas Two-Step attempt, dominoes are now beginning to fall. As Bloomberg Law reports, the Justice Department has requested the US Bankruptcy Court for the Southern District of Indiana toss 3M's similar attempt for the same reason.

Don’t drink coffee when you’re talking to your team:

@lawtradesneed to stop drinking coffee while on the phone #law #lawyer #corporate

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