Briefing: September 15, 2023

AI & Right of Publicity, Shein Snapshot & EU Supply Chains

Copyright concerns & claims have been the focal point of much of the discussion around/the cases filed over generative AI – from whether AI-generated artworks can be registered by the Copyright Office in the U.S. (we know that answer is no) to how we should treat the use of copyright-protected works in connection with the training of large language models. Issues on the latter front are playing out in real time in a growing number of cases. Copyright-specific cases and concerns aside, the role of right of publicity in the context of AI is becoming a bigger part of the conversation.

This week, Adobe’s EVP, General Counsel, and “Chief Trust Officer” Dana Rao published a blog post, in which he advocates for “an anti-impersonation right protect artists from economic harm from the misuse of AI tools,” which he calls the FAIR Act. Rao noted that while the White House has established voluntary AI commitments that have been signed off on by the like of Google, Microsoft, Meta, Amazon, OpenAI, Adobe, and others, those commitments lack protections for creators’ styles.

> According to Rao, “In the generative AI world, it could only take a few words and the click of a button to produce something in a certain style. Someone could intentionally impersonate the style of an artist, and then use that AI-generated art to compete directly against the original artist in the marketplace, causing serious economic consequences.” Continuing on, Rao states that “if you typed an artist’s name into a prompt and passed off the output for your own financial benefit, you’re hardly learning from or evolving their style.”

This is essentially what the plaintiffs in a number of generative AI-focused lawsuits cases are pushing back against. In Andersen v. Stability AI, for instance, the artist plaintiffs claim that Stability AI is violating their common law rights of publicity by enabling users of text-to-image generator Stable Diffusion to create “in the style” of a particular artist. The plaintiffs allege that Stability AI and co. “used [their] names and advertised the AI’s ability to copy or generate work in the artistic style that [they] popularized in order to sell [the AI] products and services.”

More on the intersection of right of publicity and generative AI can be found right here.

Some Litigation Updates

– Adonis Real v. Yuga Labs: Sotheby’s is looking to sidestep a “sprawling putative securities class action” case over the promotion of Bored Ape Yacht Club NFTs, which it was added to “last minute.” In a nutshell, Sotheby’s argues in its motion that it “has nothing to do with the crux of Plaintiffs’ claim—the drop in value, in the Summer of 2022, of the NFTs and cryptocurrencies they purchased. Sotheby’s did not issue the NFTs or cryptocurrencies or sell them to any of the Plaintiffs. Accordingly, Sotheby’s should be dismissed.”

– Anderson v. Roup: On the heels of a C.D. judge granting Megan Roup’s motion to dismiss Tracy Anderson’s false designation of origin and unfair competition claims (with prejudice) and also gave the green-light to Roup’s special motion to strike Anderson’s unfair competition law claim on anti-SLAPP grounds, the court granted Roup’s motion for attorneys fees and costs, awarding Roup $163,953.

– In the Matter of Stoner Cats 2: The SEC charged Stoner Cats 2 LLC with conducting an unregistered offering of crypto asset securities in the form of purported NFTs that raised approximately $8M from investors to finance an animated web series called Stoner Cats.

– Nike, Inc. v. Customs By Ilene: A C.D. Cal. judge signed off on consent judgment and permanent injunction entered into between Nike and sneaker “customizer” Drip Creationz this week. (More about that here.)

– Vans v. Walmart: And speaking of consent judgments and injunctions, Vans and VF Corp. have entered into one with a couple of the defendants – The Doll Maker and Trendy Trading LLC – in its  case against Walmart & some of its suppliers for allegedly infringing the TMs for some of its best-selling sneaker styles. (The latest on that case is here.)

A TM Application to Note: From Dior – A mark consisting of “a three-dimensional configuration of a handbag featuring a repetitive geometric pattern comprised of doubled horizontal and doubled vertical lines intersecting to form smaller squares, rectangles, parallel piped, pentagons and octagons, overlayed with parallel diagonal lines forming diamond shapes and triangles.”

In some deal-making news in fashion/retail, tech & web3 …

– Birkenstock announced that it will list shares on the NYSE under the ticker BIRK.

– Tikehau Capital has acquired a 25% stake in Italian packaging company Brandart.

– ICYMI: LVMH’s eyewear division Thelios has acquired French sunglass brand Vuarnet from NEO Investment Partners.

– Avokaado – a legal tech startup that helps businesses create & manage contracts – has raised €1.2M in a new round.

– Sustainability management startup Pulsora has raised $20M in a Series A round.

– Optera – a “leader in ESG and carbon management software” – has raised $12M in a Series A round.

– Logility will acquire Garvis, an SaaS startup that combines LLMs with AI-native demand forecasting.

– Codeless AI infrastructure company Pixis has raised $85M in a Series C1 round.

– Conversational AI technology co. DRUID has raised $30M in a Series B round.

– Databutton – an “online app builder for innovators and entrepreneurs” – has raised $5.1M in a Seed round.

– Supply chain analytics company The Owl Solutions has raised $1.25M in a Seed round.

– Australia-based eCommerce platform AMP has raised $18.5M in a Series A round.