SPEAKER_00: music industry is a great example of really the market wins and like that's one of the points i made in the tweet and i think is important to think about when you think about this case that i'm not a doomer in the sense like this isn't going to end ai like there's no universe where

SPEAKER_06: this case would end ai and so the result is do we end up with a licensing scheme like is this

SPEAKER_10: napster to itunes right but to your point that this is like it's going to be a fight and it's going to be a lot of discovery i i would predict that this week in startups is brought to you by

SPEAKER_13: mev tired of the dev shop roller coaster mev is your reliable technical partner offering a well established software development process designed to consistently deliver unparalleled value to their clients get thirty thousand dollars off your first three months at mev.com twist northwest registered agent when starting your business it's important to use a service that will actually help you northwest registered agent is that service they'll form your company fast give you the documents you need to open a business bank account and even provide you with mail scanning and a business address to keep your personal privacy intact visit northwestregisteredagent.com twist to get a 60 discount discount on your next llc and the paintbrush loan is the earliest startup financing on the internet no pitch deck no business plan no minimum time in business and no warm intros plus you get to keep your equity visit get paintbrush.com to see if you qualify for a fifty thousand dollar startup loan

SPEAKER_15: in less than two minutes all right everybody welcome back to this week in startups you probably heard

SPEAKER_17: about this a major new york times lawsuit against open ai you know the makers of chat gpt this is

SPEAKER_18: really a groundbreaking lawsuit here i think this is going to be the most important lawsuit that we've seen in ai perhaps in technology ever and so i wrote a blog post about it some of you may have read it at my sub stack calicanus.substack.com one of the great things about the x platform and twitter formerly known as twitter is that you meet interesting new people well one of those new people i met was

SPEAKER_17: chichelia ziniti uh and she is an actual lawyer and she did an incredible breakdown on her twitter

SPEAKER_18: while i was writing my sub stack so i invited her to come here on this week in startups so that we can break down what is happening in this lawsuit and this is an absolutely critical episode for all founders

SPEAKER_17: because you can get yourself in a lot of trouble if you don't follow the rules and this is uncharted territory i think you would agree welcome to the program chuchelia thank you yeah excited to be

SPEAKER_22: here thanks for having me so just your bona fides as it were you uh wrote a great tweet storm by the way and you have a background in legal so maybe just share with the audience you know who you are and uh

SPEAKER_06: why you're taking the time to comment on this issue i'm a lawyer for tech companies been in tech since um i joined yahoo in the early 2000s when they were still competing with google and always been interested in the legal side and over the years that's taken me different places i was at morrison forrester a big law firm represented apple and apple samsung which huge case of the day from there i joined amazon and they said you have all this mobile phone experience i thought surely

SPEAKER_27: i'll be working on the fire phone i get there they're like no we're gonna have the more experienced attorneys on that you're gonna work on this device it doesn't really work it's called doppler

SPEAKER_30: and that turned out to be alexa and it was a great career move so i was the first lawyer on alexa i had a great experience there and then um went on to be a gc of different tech companies um you might have heard anki was uh andreessen horowitz it was a early robotics company spent some time at

SPEAKER_32: cruz and then most recently i was the general counsel for replet oh wow so uh what an incredible career

SPEAKER_33: thus far let's get into this case uh because this is a very unique case in the history i think of copyright and correct me if i'm wrong having been in content my whole career as a journalist

SPEAKER_36: publisher silicon reporter blogs at weblogs inc i've dealt with a lot of these fair use claims uh and i've dealt with a lot of copyright claims i've dealt with cell phone manufacturers you know emailing us oh my god you have a leak that's our copyrighted information all this stuff and so

SPEAKER_33: there's um a lot to unpack here but when you saw this lawsuit drop and you you started unpacking it how important is this lawsuit and what is the nature of the lawsuit for people you know who uh you know maybe are new to this just briefly what is the nature of this lawsuit what is the new york

SPEAKER_39: times claiming here yeah so new york times has a content library one of the few content holders more

SPEAKER_10: prolific than you jason perhaps going back to 1851 right so they reported on literally the civil war right so that amount of content millions of articles the allegation is that those articles were used in a couple of ways by openai without consent so one way is training right so in the complaint new york times actually breaks down that it was a decent percentage of the articles used to train opening ai i think

SPEAKER_00: you know in the like one or two percent something where it's actually measurable you know one random blog post that i wrote you know not going to move the needle but the entire new york times archive you

SPEAKER_06: know maybe it does and that's the allegation so that's one the second theory is more on the output side so when you go to chat gpt and you ask for an article they've got this exhibit new york times made

SPEAKER_52: this exhibit exhibit j if you look it up it's great but essentially it has a hundred instances of somebody putting the first paragraph i put an article in and chat gpt gives you the rest verbatim you know

SPEAKER_26: like almost you know one or two word changes but that is kind of a different a different theory and it triggers the law differently and get into that of some interest but that's really the core of this

SPEAKER_33: yeah and so the nature of fair use i am very familiar with because i've had many people claim that we use their content let's say in a blog post or in this very podcast where we might use a short snippet of a song where i'm doing commentary on it or a clip of a news event that occurs and so i'm

SPEAKER_22: pretty familiar with the four-part test but maybe you could run our audience through the four-part test because open ai i think believes that what they're doing is fair use and then as part of that

SPEAKER_61: i don't know that training as a concept has existed in the copyright law this idea of training something i believe is novel to copyright law am i correct in that one that's right there hasn't been at least

SPEAKER_39: an adjudicated case on training yet there have been a lot of fair use cases that i think open ai and new york times will each point to ones that go their way in technology but there hasn't been one

SPEAKER_52: on on training that i'm aware of um that's gotten to that point yet but in terms of the fair use test

SPEAKER_06: it's a super fun one it's four factors as you said but they are non-exclusive and it's very squishy it's literally courts are directed to judges apply and not juries courts are directed to balance the interest and they can consider other factors and no one factor is fancy word dispositive no one factor

SPEAKER_72: decides so it really is something where there's a lot of discretion and the optics of it and how

SPEAKER_74: like whether the judge wants to rule your way tends to matter so the the four-part test is not

SPEAKER_22: um you can take five percent it's not you can take twelve percent it's not your you can monetize it a little bit over here it's open for interpretation exactly and you have to as a judge when you make

SPEAKER_61: these decisions look at the totality of those four parts so let maybe we get into those four parts and

SPEAKER_81: then let's go into some examples yeah let's dive in i have a i actually have a slide where should i pull

SPEAKER_82: that up all right awesome yeah let's do it i mean wow i love a guest with a slide deck i love it

SPEAKER_44: i wanted to be a law professor and then decided other things were more lucrative so this is my

SPEAKER_83: my law professor dying to be free but essentially um fun thing about fair use it was uh the original

SPEAKER_10: fair use case was in the 1800s and it was a about writings that george washington had and another biographer copied 353 pages of washington's original writing and lost it was not fair use 350 pages

SPEAKER_00: was too much and then that opinion um from the 1800s got codified into the copyright act so here

SPEAKER_86: they are let's go through the four factors so i used emoji because this is the new generation the

SPEAKER_91: zoomers will help do that but essentially the first one is the purpose and character of the use and this is really where all the play is in technology cases so i've got here i've got the emoji for theater

SPEAKER_10: for like how are you using it the emoji for video game controller because video game cases are actually pretty instructive here and then the emoji for the web right so this is where what the court considers here is how are how is the infringer using it are they making a commentary are they making a joke are they making a parody are they famous case perfect 10 versus google perfect 10 was was a pornographer and said to google hey your thumbnails are infringing our content because they're literal copies that people see google defended saying this we're using this for a different purpose you're not trying to be

SPEAKER_96: pornographically entertained when you're doing a thumbnail search maybe you are but it's not a good

SPEAKER_61: substitute google won that case on this fact so that was for google search now let's go through some of those cases if you were doing commentary there have been many cases where people will take a movie

SPEAKER_33: or there'll be a documentary film about uh a movie uh or might use movie clips and if you're doing commentary on that even if it's commercial there's some leeway allowed for that and then there's parody so if you made a parody movie like space balls is the famous mel brooks parody of star wars you can make a parody you can make a joke of something and the test i believe like the subtest here is the confusion of the audience does the audience know who the original author is or not so if saturday night live does a parody of for two or three minutes of harry potter

SPEAKER_36: nobody is confused that that's actually harry potter i mean there it's pretty obvious right so this is part of it whereas if i did i wrote my own fan fiction of harry potter and it was really good and

SPEAKER_33: it was a full book you might be like wait a second i can't tell if jk rowling did this or not so there's something about the audience that matters here in this purpose as well correct yeah so it basically um

SPEAKER_100: fanfic is a great example it actually the examples that you gave implicate not just the audience's

SPEAKER_103: view but really the full factor test and the factors kind of like it's like a like an inverse

SPEAKER_06: scaled you know that one goes up another one goes down but in the case of harry potter great example so jk rowling sues fan sites and she wins because her stuff is so creative that you know if you have

SPEAKER_103: a fan site that says okay this is hagrid and has big chunks of paragraphs and they're getting all this

SPEAKER_00: revenue lots of clicks you know seo optimized website that's a fan site jk rowling testified and she

SPEAKER_109: said i mean so creative to even testify this way she's like it's as if someone came into my plum

SPEAKER_74: pie i had cooked and picked the great plums out and so it was like the creative aspects yeah those

SPEAKER_17: were kind of what triggered the keys a lot of founders are great at going from zero to one this takes vision creativity hustle all that great stuff but those same people often struggle with going from one to a hundred if you want to scale and you want to do it efficiently you're going to need process and you need structure and that starts with your product so if your startup needs a more structured engineering approach you need to check out mev mev helps businesses build and maintain their products faster and more effectively they'll make your product more stable scalable and secure they'll build custom infrastructure that scales and they can help build additional features for your product and more for each of your needs mev organizes an entire tech team comprised of senior engineers delivery managers devops q a and designers and they've been in business for 17 years and they've helped the following companies build complex tech products cartier to it and ozempic maker nova nordisk my favorite so let mev help you increase product velocity and make product engineering more sustainable mev is going to give you thirty thousand dollars off your first three months that's

SPEAKER_114: right get ten thousand off per month right now at mev.com twist that's mev.com twist for thirty

SPEAKER_06: thousand dollars off your first three months interesting on the parody side you know the supreme court weighed in on it um i have a sound clip if you're oh let's do it let's do it okay um because i

SPEAKER_119: remember when i was coming up in the industry i always found this one fascinating there was a

SPEAKER_121: game called mist it was a famous game and then somebody made a parody of mist and they sold it as

SPEAKER_36: packaged software and people got really uh they weren't confused by it but you know they had to

SPEAKER_22: make some concessions i think and most of these lawsuits am i correct are settled out of court they don't go all the way people just say like hey this is not reasonable this feels unfair and then the other party says okay well if we put parity on it and we made these changes would that be okay with

SPEAKER_123: you and they kind of negotiate their way out of it yeah exactly they're pretty rare to go fully to the supreme court or even just to court in general because usually the parties work it out they're

SPEAKER_10: expensive unpredictable etc this one did go all the way commonly it's record companies or your sony's of the world your new york times that are pretty big and have you know kind of pockets to do it or a big

SPEAKER_129: financial reason to push it right they have a lot of stake exactly exactly so they have to hold the

SPEAKER_128: line in some ways right if you don't defend the yourself in an instance then the next instance it

SPEAKER_133: becomes harder to defend yourself is that correct that's right um also it it's like uh commonly

SPEAKER_06: people who are trying to claim for use like they sort of know in advance and that's certainly the case with open ai like they knew the copyright issue was coming you know one of the things in the

SPEAKER_136: complaint says that their board member you know helen toner the one who departed one of her issues with sam altman was not addressing copyright properly so if you know that then you hire people like me to help you like okay where are the edges how can we win on these different factors and so yeah

SPEAKER_00: so in this case this one is pretty woman so the classic roy orbison song the guitar riff is pretty

SPEAKER_140: recognizable and two live crew made um a version of it that i can i can play part of it sure

SPEAKER_141: uh let me see if if you can get the audio let's see yeah is that coming through yeah it's coming

SPEAKER_143: through and now we're gonna get a copyright claim here exactly on youtube exactly no i'll just but we

SPEAKER_146: will say it no no it's okay we will we will defend it as fair use because we're doing commentary on this

SPEAKER_152: exactly yeah right that is i mean it's literally it's literally the same right you know it's a cover

SPEAKER_157: song in a way it's like it's a cover yeah so but what they did and this is kind of interesting

SPEAKER_10: is you know instead of sort of the oh pretty woman lyric repeated they made it oh hairy woman oh bald woman like they made it it's kind of a raunchy song but the point is is like it's different enough that the argument was made that like this is a commentary on you know sort of society and wealth it talks about you know there's different you know you could argue that two live crew was it just

SPEAKER_00: in a different societal place than roy orbison in the 60s or whenever he wrote the song and so it went to the supreme court and this case stands for the proposition that a use can be fair it can be

SPEAKER_161: parody or or commentary even if you're making money like you know this is that two live crew where they

SPEAKER_66: were not professors they were not you know just like writing a blog no one would breed they were

SPEAKER_10: selling music and yes and so that case was was important and it got really into the four factors

SPEAKER_124: so it's considered one of like the canonical cases and how did that case work out did it wind up in

SPEAKER_06: a settlement i would assume uh you know after the supreme court ruled in two live crews favor i'm not

SPEAKER_167: sure what happened i think um the roy orbison estate like lost rights to the work or something like that

SPEAKER_33: but it turned out to be a sad thing for roy orbison in the end and now when people do do samples there is and the music industry is the toughest they're the most hardcore because it's a small

SPEAKER_61: group of people and they work together in unison you know let's be honest they're just super sharp

SPEAKER_22: elbowed people they've always been in terms of ip so they have said like hey listen you want to do a cover here's the mechanicals and the licensing for that hey you want to use the sample you have to have permission in advance and then hey you can do a sample and then kanye just did a backstreet boys cover and people were wondering how he got the rights to the sample it wasn't a sample it was a cover and so they they have their own little mechanics and traditions in the music industry

SPEAKER_172: that or standards right they've established exactly uh for this that yeah i mean that's the music

SPEAKER_174: industry is a great example of really the market wins and like that's one of the points i made in

SPEAKER_00: the tweet and i think is important to think about when you think about this case that i'm not a doomer in the sense of like this isn't going to end ai like there's no universe where this case would end ai

SPEAKER_06: and so the result is do we end up with a licensing scheme like is this napster to itunes right so napster comes out you know at in the time i was in college it was like you could get the entire

SPEAKER_133: beetles library from somebody in the dorm next door like you know it was clearly like it felt sort of bad

SPEAKER_180: yeah it felt like stealing it felt like stealing right well because there was no difference between

SPEAKER_22: downloading on napster or downloading on itunes or buying a cd it was this you did one in place of

SPEAKER_135: the other exactly that's exactly right and it itunes came up after right it was like okay this is a

SPEAKER_10: legitimate way to pay for digital music and and people like you know me or you or whomever it didn't feel like stealing when you paid for 99 cents and it wasn't when you paid on when you paid for it on

SPEAKER_177: itunes or spotify or wherever now and that industry has come out of that so you can see you know with open ai they could have a system where they figure out um kind of the provenance of different outputs

SPEAKER_140: and pay in some way or okay you want me to do a verbatim luigi all right there's your five cents to

SPEAKER_26: nintendo or whatever like this is not the tech will find a way i'm very confident of that this argument

SPEAKER_22: by technologists is that this is too hard to do attribution is nonsense i mean if you can honestly

SPEAKER_18: agree with you yeah i agree i mean if you can create this incredible ai that's able to make

SPEAKER_22: images you should be able to figure out what was the source of those images and if you can go find these libraries of content to train it on and then train these very sophisticated things and set up ten thousand computers or a hundred thousand computers and billions of dollars worth of computers with thousands of engineers i think you figure out attribution it's not that hard and in fact there are services that are already out that that are in the chat gpt mode um which actually do do citation so the market has already proven it's possible let's talk about this one piece of the four-part test you've got the purpose and the character of your use is it parity is it education in education

SPEAKER_36: if you're not making money or in society if you're doing commentary you get a bit of protection we want that in society we want mel brooks to be able to make jokes got it we want a professor to be able to show you know star wars and give commentary in a class in a non-commercial setting for people to

SPEAKER_33: learn it's not going to compete with people right so that's all really good stuff that's good stuff that we want in society we also want people to be able to make fun of things and do commentary so

SPEAKER_192: if john stewart or olive uh john oliver want to take i don't know a talk that some you know president trump or president biden did and they want to make fun of it and use parts of it well we want them to be able to be mocked in a free society and that doesn't kind of conflict with anything so we

SPEAKER_196: understand those yeah kind of a fun one fun little point on that is that it comes from the constitution so copyright law is actually it's federal law and the ip clause is um section 8 clause article 1

SPEAKER_26: section 8 clause 8 and it says to promote the progress of science and the useful arts congress can secure limited monopolies for authors and inventors and that that initial to promote the progress of science and the arts that's been used by courts to limit copyright so copyright could go

SPEAKER_199: really really far like you get a lot of copying never but that idea that it really is about societal

SPEAKER_140: progress that's also what helps tech companies right so that's also why google won the thumbnails case because they're like look you know it's super useful to have search how else are you going to have image search if you don't know what image is actually in the results right and they also had the

SPEAKER_22: argument i think in that case that they were doing very tiny images smaller percentage of the original work and that they weren't taking every image i believe there was like we're only taking a small amount of

SPEAKER_18: it and then they also i think had the sort of ultimate uh rebuttal which was you can also i think they

SPEAKER_22: created robots.txt around that time where you could just say you know what i don't want my site indexed and the google was like if you don't want to be in the index you don't have to be exactly perfect 10 then could just not be in the index and problem solved so then they had to make the trade of okay give a little bit of my content a thumbnail image of you know some uh photo uh of an adult nature and then i but i get some traffic so maybe it's worth it and then the copyright holder can make that

SPEAKER_17: decision just like i think star wars lucas was very cool with fan fiction as long as it and fan movies even as long as you didn't try to monetize it starting a business used to be a pain you needed a lawyer there were hidden fees it was a mess now with northwest registered agent it only takes 10 clicks and 10 minutes northwest provides everything you need to start and maintain your business every llc corporation or non-profit at northwest forms comes equipped with registered agent service a business address a website and hosting email a phone number and this is all covered by northwest privacy by default again your full business identity will be live in 10 minutes and in 10 clicks so here's your call to action for 39 plus state fees they'll form your llc corporation or non-profit and launch your business in just minutes visit northwest registered agent dot com slash twist today that's north west registered agent dot com slash twist today so if you go onto youtube right now you

SPEAKER_22: can watch all these really creative kids running around dressed as jedi fighting each other and releasing episodes they don't get cease and desist but jk rowling might say hey with my art i want a

SPEAKER_207: different standard exactly exactly and and you know open ai to to the point that you know you get lawyered up and you kind of realize what you have to fight about open has been savvy about this and they

SPEAKER_26: announced in the summertime that they'll respect robots txt go forward and so these kinds of

SPEAKER_136: systems where you're giving the the owner control that's going to be the kind of thing that open ai

SPEAKER_26: will argue you know matters here and they're doing that you know partly informed by president but partly also because from an economic standpoint it's the right thing to do okay you own your content you have this bundle of rights you want to license your content to make a harry potter restaurant fine i mean

SPEAKER_216: that was another case actually funny enough somebody tried to do a um uh it was called so i think it

SPEAKER_219: was so yeah so it was it was a restaurant actually of spongebob um so spongebob there's the crusty crab

SPEAKER_30: which is a spongebob character and there was a restaurant in houston called the rusty crab and they they tried to say oh this is social commentary but it really wasn't it was just a spongebob restaurant

SPEAKER_17: and so viacom went after them and won so now the percentage of the work matters when in in this

SPEAKER_177: fair use test as well correct that's right yeah so it's called um this the second factor is the amount and substantiality of the portion used um okay and i'm sorry no actually no i can pull i can

SPEAKER_226: pull up the slide that's the third factor technically i got confused here i'm not i'm also not an ai one

SPEAKER_219: second we've proven it exactly exactly like a lot lots always um okay so nature of the copyrighted work

SPEAKER_177: that's factor two it doesn't get a ton of play because it's um you know most work is creative

SPEAKER_00: but in this case um new york times anticipated this issue and they've got a long thing in the complaint about how creative their journalism is and they're right like you know they spend a lot of time i mean obviously you know you've been a journalist it's not just pure facts there's a lot of ways and funny enough i i didn't expect this but in response to my tweet thread there was a lot of political things it was like oh my goodness i can't believe the new york times is such a chunk of opening eyes training data that's why you know gpt is so well exactly yeah exactly but this is

SPEAKER_22: interesting facts and data points are very hard to copyright so if you there's like a website i use

SPEAKER_18: often which makes beautiful graphs i forgot the name of it but it comes up all the time it's like the

SPEAKER_237: world in data or something like that something there's world in data and then there's another one that

SPEAKER_22: comes up in seo and all this company does and they charge like a subscription for it is take other

SPEAKER_192: people's data and make a very beautiful standardized chart you know i was looking for some market maps

SPEAKER_239: for one of my investments or some market sizing and it had you know it was like something super

SPEAKER_219: obscure it was like the world button market or something and it had like all the countries yeah yeah

SPEAKER_18: yeah and then you look in the credit it says source you know this is uh you know pew research pew data this is from this data so you can literally make any chart you want on anybody else's data as long as

SPEAKER_241: and i think in terms of fairness you just put that that's the source of the data but data is not copyrightable is this correct like facts and data are not copyrightable yeah so couple of big cases on that

SPEAKER_245: one um one was feist versus rural telephone and it's kind of a little a little antique but essentially

SPEAKER_246: one telephone maker took the phone numbers and names from another made their own phone book put their own

SPEAKER_06: ads in it and essentially that case was pretty important because the supreme court said look copyright is not about labor it's not about the work you put in it's about the creativity remember to promote progress of science and the useful arts is this really about creative progress is copying

SPEAKER_00: of a telephone now there's other ways maybe contract or other ways that that you could go after but

SPEAKER_10: in your scenario pew you know if it's reported as a fact you know percentage of americans on the internet every day or whatever it is then you would be able to use that that compilation now there's

SPEAKER_00: some nuance around creativity in the compilation so the the other big big case on facts um is oracle versus google right so that went to the supreme court google copied oracle uh i think it was

SPEAKER_10: declaring code and so essentially in order to be able to to have java on on chrome they did that copying and the supreme court that was heavily litigated over years um yeah i think 10 or 11

SPEAKER_32: years but any event the supreme court found for google in that case so the nature of the work yes

SPEAKER_22: statista is the name of the website that we sometimes use that's exactly what it is and then there was another one e-marketer and they've gotten in all kinds of like legal letter kind of trouble i believe i remember seeing it i'm not sure which side had that but then like you

SPEAKER_121: know other kind of reblogging sites started doing the same thing so if you want to make a great business you can just take other people's facts and make beautiful graphs out of it you see people

SPEAKER_22: do that all the time but that makes sense and and then scraping data there was a israeli company that was scraping linkedin data and they were saying hey this is just facts that's another area scraping and fair use there i don't know if you've seen many cases there but they they yeah then you get into international jurisdictions like what people think in japan india you know the middle

SPEAKER_121: east and europe could be very different the jurisdiction could be very different in how you used it i think linkedin and microsoft sued this israeli company and lost um yeah yeah it's interesting

SPEAKER_257: i mean with scraping you know thinking about sort of the startup angle some of it is also contract

SPEAKER_26: law like i've seen scraping cases get on like you're literally trespassing and this is why also you know some of the technical means like you know if you're scraping in such a way that you're like ddosing the site or you're hitting it so much that of course there's other claims against you and

SPEAKER_10: right you know every website terms of use has an anti-scraping and i've started to see in my practice and then a lot of a lot of companies now are putting you know it's against your our terms of use for you to use our data for training and you know you can imagine you know in vertical ai you know people doing you know i don't know ai for doctors there's a website called doximity which is like it's the linkedin for doctors okay are they if you scrape that content you know maybe you're individually doing it you're breaking the terms of use especially if you're doing it um you know locked in so there's kind of other there's other theories but yeah the linkedin case was a big one

SPEAKER_267: and scraping overall you know certainly in e-commerce it's everybody does it yeah but yeah knowing the price of

SPEAKER_22: a product the price of a product across 10 different websites across 100 different days doesn't feel like the nature of that copyrighted work is not like some artists invested a lot of time in it now if you send 10 people to the front in the ukraine or in ukraine rather sorry um and you

SPEAKER_18: know you spent a million dollars putting them there for six months you know this is a whole different

SPEAKER_61: ball of wax there's a lot of work and that's what the new york times is claiming here the amount and substantiality of the portion used that's the third part of the test what does that mean yeah so this is

SPEAKER_06: getting at our particular phrases copyrightable so interesting one here taylor swift with shake it

SPEAKER_00: off she said something like player is going to play and there was a rap song called player is going to play some years prior and they they sued taylor but she won or at least the case went away they agreed to drop it because there's not that many ways to say that concept so there's this thing called the merger doctrine and this is actually an issue where if you um if there's only so many ways to do something then you can't copyright that thing yeah but this is a fun one and i have a visual on this

SPEAKER_140: one that i think is funny and it's actually a doll it was the seventh circuit so that's the circuit over chicago and there was this company talking about e-commerce that made um apparently very lucrative to the

SPEAKER_276: surprise of the court which they say in the opinion but basically farting dolls like you buy it at you know at the mall or wherever and you you get a doll and it makes a brick noise the doll on the right was

SPEAKER_140: basically that the makers of that doll had gone to like a toy show or something seen it and copied it

SPEAKER_283: so copyright suit brought by the makers of the guy in the green chair and the court said look the concept

SPEAKER_10: of a farting doll that's not copyrightable no i can go make one but the court has this amazing paragraph

SPEAKER_00: in the opinion that's like they could have given him a mullet they could have given him flannel they could have done they could have put him standing up they could have had him wearing boxer shorts you know whatever like the point is these little details too substantial of a portion of the original

SPEAKER_140: was used and it was not associated with the idea like had nothing like the idea itself you can express

SPEAKER_10: it a bunch of ways so people in this case in the in the open ai case you know the art stuff is super fun because it's visual so there's been a whole meme and i did another tweet on about it about super mario and luigi yeah you know if you ask for an italian plumber that's what you're getting yes you know

SPEAKER_294: there's other ways to have an italian plumber right maybe he's maybe he's really stylish and wears

SPEAKER_119: prada you know so you could make an anime version of it but the fact is the most iconic one

SPEAKER_22: that has had a lot of money invested in it was by nintendo listen not every business is venture

SPEAKER_17: scale if you're not you won't be able to raise money from vcs we all know that and not everybody has a rich family member to do their friends and family round so if you want to jump start your business with fifty thousand dollars let me tell you about painbrush loans painbrush has created a new kind of loan product they connect idea stage startups with bank capital so you don't need to give up any equity and there's no pitch deck or revenue required and the paintbrush loan is available at the idea stage in fact you can apply the moment you incorporate your company monthly repayment is a flat predictable amount which makes cash flow planning really simple so here's your call to action if you're a founder in the us go to get paintbrush.com to see if you qualify for a fifty thousand dollar startup loan in less than two minutes that's get paintbrush.com to see if you qualify in less than two

SPEAKER_296: minutes one of the things i tell young founders or people in content is like if it feels unfair

SPEAKER_61: then perhaps it is and you have to have empathy and take into account what the other party is going to think their opportunity would be and i think this gets us to the fourth part of the test which is if a new product or service is going to be made from jk rowling's books or from the new york times

SPEAKER_298: archive who deserves that opportunity am i correct that's that that's the fourth part of this test exactly

SPEAKER_00: and and you're correct in two ways both on the test and on the feeling like you know i've been practicing law a long time and a lot of these cases really are like you said napster felt kind of wrong and

SPEAKER_30: it kind of was right and so it does turn on that but in terms of the factors let me let me pull that back up and i can um i was very proud of my emojis so i can emojis are great emojis here but yeah so

SPEAKER_219: basically like you know you see the flying money but it's literally like what is the market for the

SPEAKER_26: original um yes and the value of that market and who gets to to exploit that right so intellectual property is similar to regular property right if you have a piece of land who gets to put a hotel on it right if you have this really juicy piece of land right so similarly here new york times got

SPEAKER_257: with this factor by saying open ai has already made deals for this they know how to license data

SPEAKER_00: like they've already done it with politico they've already done it with the ap it's not like there's no market for this and so you know others in the thumbnail case that was harder to prove um there was evidence put forward oh you can use the thumbnail for you know at the time we had those

SPEAKER_10: nokia flip phones with the tiny little lock screen and it was like okay there's a market for that but

SPEAKER_91: evidence came out in that case that those were fake licensing deals done just for the litigation

SPEAKER_139: here it's clearly not so yeah so that's another factor and then but it's not like i said it's very

SPEAKER_257: squishy four factors kind of and they're not it's exhaustive either so you know a court could say you

SPEAKER_30: know there's these four factors and i'm going to introduce a public good factor you know like basically

SPEAKER_61: make one up for the effect of the u of use on marketing original value this is where i'm going to do a follow-up post uh to my original post which is i pay as a user 20 bucks a month or so 20 30 bucks a month for new york times and i pay 20 30 bucks a month for chat gpt for it i'm paying for both and i

SPEAKER_36: recently was going to and i'm a huge fan of the wire cutter and i am like a crazy product research guy i just love researching products restaurants etc i use yelp i use everything um and i love wire cutter in fact i tried to buy wire cutter or invest in it back in the day before they sold it to the new york times and so i did a search for coffee grinders and some other stuff and i actually did it on i

SPEAKER_121: believe chat gpt and claude and a couple other ones and i was just testing it and um it was pretty clear that they got their information from wire cutter because you know it was kind of like the answers

SPEAKER_36: were very similar i am like i think the tip of the spear here if i get my new york times and my wire

SPEAKER_192: cutter from chat before i might cancel my new york times over time is it not the case that the product open ai built the ability to use a chat bot to talk to the archive of the new york times that is the new

SPEAKER_257: york times is opportunity not open ads yeah so you know the example i use you know martha stewart

SPEAKER_00: great media conglomerate and she's very very savvy very tech forward she was talking a year ago right after chat gpt came out about creating a martha ai that you could talk with because she's similar to their time she's got decades of really high quality content that in a particular voice right and so yeah that's one way another way is new york times made the case in the complaint that they calibrate very carefully what's free versus paid right you know the amount of gift things that you have you know

SPEAKER_257: if you click from instagram sometimes you'll get the gift version basically like that's there like

SPEAKER_109: the rights holders essentially property to exploit is how they would say and how they subdivide it and where they put that line how much admission they charge all of those things they would say are within

SPEAKER_00: their rights now open ai would probably make similar arguments to you that okay under that first fact

SPEAKER_10: or similar arguments to what they make out of the first factor which is you know it's a different thing it's a new you know having an llm specifically a very large language model trained on that number of parameters the amount of investment that they've made they've changed it into something different

SPEAKER_326: to where it has a different purpose you're going to chat gpt to have generation as opposed to have you know pre-made research on a particular thing their claim would be and i'm trying to take their

SPEAKER_33: claim seriously here in feral yeah their claim is hey we did this first we made a language model first

SPEAKER_22: therefore since the new york times they didn't get to it yet this is new because doesn't the new york

SPEAKER_330: times have an unlimited amount of time to exploit their own content like yeah and they could choose not to yeah or they could not do but so if disney said you know what we we bought marvel and you know we're we haven't made a marvel theme park ride yet that doesn't mean somebody else gets to make the

SPEAKER_339: marvel theme park ride exactly yeah no so the time aspect if i if i mentioned a time aspect um that

SPEAKER_33: would be i misspoke but no no you didn't mention it i was just building on your thoughts on it which is they're saying hey we spent all this money to build this thing it's like yeah you did we are planning on building it as well at some point therefore it's our opportunity so i think that one fails that one

SPEAKER_343: that one may fail where where i think they could say is like we're not trying to replace the content

SPEAKER_00: they could say our our our aim is to just merely have the best language model possible and therefore

SPEAKER_140: you know the literally more the the higher volume of text that we use kind of the better and you know

SPEAKER_345: it's going to be more like the job the oracle case that i mentioned where you know google's argument

SPEAKER_10: was like there's only you know java programmers already know how to declare these variables we're going to copy the declaring code to literally advance the progress of engineering and so open ai could say something like it's a different thing you know we are we use the new york times content and other content for training to advance kind of the state of the art of the actual llm how it generates

SPEAKER_00: words how it's better and people can kind of see this and and what they would say is like look gpt 3.5 and gpt 4 very different gpt 4 is much better because we did more training on more content

SPEAKER_323: ergo it's not the actual content itself or the creativity of the content it's just the fact of having content so that's another another way they could they could take it based on your gut let's say

SPEAKER_18: this goes to the mat and we went through this four-part test based on your gut percentage-wise new york times wins their argument that you can't train on our data and they have to they get an injunction what are the chances that happens i mean i'm really putting you on the spot injunction

SPEAKER_00: the odds of an injunction are very slim the standard for an injunction is that it causes irreparable harm

SPEAKER_26: to whoever it is the plaintiff and it's harm that cannot be fixed with money and so there's very few

SPEAKER_00: harms really that can't be fixed with money and so that and then the test for an injunction is another four-factor test and so when it's sort of close and when you have a technology that definitely

SPEAKER_10: has societal benefits so you know opening i'll say look we've got people um you know diagnosing

SPEAKER_365: things with chachi bt we've you know saved marriages what you know whatever all all the amazing stories

SPEAKER_179: about which honestly like it it's incredible productivity boom you know i use it every day like

SPEAKER_367: i'm a huge user of it and so just on that societal benefit i would so injunction unlikely injunction very

SPEAKER_119: unlikely so let's work backwards from that injunction less than 10 chance right uh yeah i would say less

SPEAKER_00: than 10 i think that's not zero zero i mean you could have something very strange like you know like in the apple case the apple patent case it went sort of all the way to biden and stuff so you could

SPEAKER_375: maybe but i think it's unlikely so if they were to lose then you would be in the damages but then

SPEAKER_22: they would also have to remove it right is that's a possibility is that they have to retrain that the settlement could be that they have to retrain things and take the new york times out of it yeah i mean it

SPEAKER_377: could be that being said we you know 4.5 gpt 4.5 is rumored to be coming out and so it could be that

SPEAKER_257: you know they sort of skip straight to that and they've known about this case for a while like the the complaints as they've been negotiating since april so my guess is open ai has probably already um kind

SPEAKER_00: of firewalled off the new york times content got it new york times i think 535 other journalism publications you know everything from you know down to like the st louis post dispatch have put themselves on that do not train list and so i don't know but it's very tough for an llm already developed right it's back to jake wallings example like you can't put the plums out of the case in this case it's almost

SPEAKER_286: like i don't know it's baked a cake and it's like the vanilla like how are you gonna get the vanilla

SPEAKER_36: out of a baked cake like it's not a thing if we know that they trained it on one or two percent in the first versions and they should be able to determine that because there's going to be a discovery in this case and this case is going to keep going i don't think there's a set i don't believe there's going to be a settlement i think they're going to take this to the mat new york times yeah

SPEAKER_22: because i think they regret not taking to the mat with google back in the day so this is i think existential for them where they view it as such therefore they're going to go to the mat therefore there will be discovery and in discovery there will be slack messages or emails or conversations about what are we going to include and they're going to have that open crawl and that open crawl is going to be plain as day what they put in there is going to be in a hard drive somewhere and then there's people talking about it saying the new york times is really high quality we should move their weight up and we should make this like more important than say business insider which is a lot

SPEAKER_130: of like fakakka nonsense and then you know oh and then there's like 4chan or reddit like maybe we'll

SPEAKER_18: make those a little bit you know uh less valid or maybe make them more valid who knows uh for in the case of reddit so that's all going to exist in discovery and that's going to be super damaging is it

SPEAKER_241: not and then the discovery part of this could be explosive yeah i mean it could be super damaging but it

SPEAKER_100: also could be helpful right so i mean open ai they went for the the the non-profit model in part because

SPEAKER_103: they saw i mean copyright is one flavor of issues but they saw certainly societal issues and so you

SPEAKER_387: know i i've done you know interacted with open ai repli had a deal with open ai going back to 2020 so they they're pretty thoughtful so i mean yes you could get but any discovery is always a wild card you

SPEAKER_00: could get crazy emails in the google case that i mentioned the oracle google case early on there was like 150 000 worth of litigation over one email from an engineer saying hey i don't see any way

SPEAKER_361: how to get out of this without licensing from oracle and he just literally put it in there yeah exactly

SPEAKER_394: and it was an email to you know like larry and sergey and it was like the lindholm email and it was like

SPEAKER_398: famous and this guy who's like you know a director of engineering was like had his moment in the sun from

SPEAKER_401: that email so yeah this is a reminder never put never discuss legal topics on electronic communication

SPEAKER_86: always discuss them on the phone or on the thread like i actually use it to teach privilege because he um he cc'd a lawyer but it wasn't to a lawyer he wasn't asking for legal advice he was declaring so

SPEAKER_406: it's it's a fun one but yeah it's it's um so could show the email if you want oh yeah that'd be great

SPEAKER_298: uh so the the the issue here though is opening i can't have their cake in it too they can't be

SPEAKER_22: selling billions of dollars in secondary and claiming the non-profit for the good of the world when literally the same executives who i'm going to use the word liberated or took without permission the new york times took without permission are the ones cashing in their shares at 100 billion dollar valuation and pretty illogical if this thing is worth if the new york times was two percent of the

SPEAKER_36: training data and if it was let's say the best of the training data and they said this is five times better than anything else okay that's 10 of the good stuff okay 10 of 100 billion is 10 billion so we want 10 billion or if this thing's going to grow to a trillion we want 10 percent of the value of the company and when it becomes worth a trillion you know we're going to 100 billion yeah i mean and these

SPEAKER_72: kinds of cases like you know it's always and this is where you know i i love being a lawyer and

SPEAKER_412: i feel like like i i generally think yeah right i love you being a lawyer oh thanks no it's like i

SPEAKER_219: think it's like where the advocacy really matters so you know one of the things i worked on early in

SPEAKER_405: my career was the apple samsung case and i was the associate on damages and figuring out okay what's the a value of a rounded corner on a phone like that was like how do you assess that and so similarly here there's a lot of unknowns we don't know how valuable open ai is going to be we all think it's

SPEAKER_10: going to be worth trillions but we don't really know there could be some meta could break out or one of the others could break out it could become worthless it can become exactly exactly or or you

SPEAKER_27: know a lot of the research i've seen in the last maybe a couple of months is that ai can generate

SPEAKER_00: its own training data so there's people literally saying that we don't even need the new york times anymore we can use the ai we have to write the new york times exactly and so that's like another

SPEAKER_91: thing so it's really um you know it definitely is not for the kind of faint of heart or stomach there's a million ways to argue anything but here let me show you this um this this this lindholm email

SPEAKER_423: because it's so fun um one second there's always somebody on the staff while you pull it up that

SPEAKER_18: thinks they're an attorney uh like me because i'm sitting here with my non-legal degree but i've got

SPEAKER_22: a lot of experience and uh i always tell my team members like you're not an attorney do not talk about

SPEAKER_18: any legal issues ever we have a phone call and talk about an attorney but be careful okay here we go

SPEAKER_133: exactly so this one so this is from tim lundholm who was um i believe he was an engineering director and he sends it to andy rubin and then ben lee was was a lawyer at google but he says context for

SPEAKER_219: discussion what we're trying to do and he calls it attorney work product which again he's not an attorney so he tried and he calls it confidential and then he says this is a short pre-read for her call and then this is the famous line that got that got a lot of play um in litigation here in san

SPEAKER_10: francisco what we've actually been asked to do by larry and sergey is to investigate what technical alternatives exist to java for android and chrome we've been over a bunch of these and think they

SPEAKER_428: all suck we conclude that we need to negotiate a license for java under the terms we need

SPEAKER_91: and that was the key issue in the case funny enough to your point of going to the mat

SPEAKER_405: google ended up losing on this at the trial level but went up to the supreme court and ended up winning over that the needed copying but to your point that this is like it's going to be a fight and it's

SPEAKER_10: going to be a lot of discovery i i would predict that all right so what else are we missing here

SPEAKER_61: because you in your deck had some of the examples i think is super compelling and because technologists you know you work with technologists they tend to a portion of them think if i can technically figure out how to do something it's legal or it should be i don't know what to call this but like it's sort of might is right if i can technically figure out how to scrape your website and create this or create that well then it should be legal which is how the napster folks felt like well we

SPEAKER_435: tech it's and there's also the technical inevitability argument well it's going to happen so we might as

SPEAKER_06: well do it um yeah i mean there is something to that so one of the cases is um was an emulator so sony is a very common uh either plaintiff or defendant in ip cases because they have a lot of valuable ip and basically someone made an emulator of a playstation an early playstation on a pc and the graphics were actually technically better on the on the pc and that case went to the night circuit and the emulator maker won because and there was a lot of copy involved they had to have they had to

SPEAKER_445: basically reverse engineer the entire playstation to be able to do it and of course they copied it

SPEAKER_446: like the literal bits and bytes of of the code were were put onto into the emulator and so

SPEAKER_33: that there is something to that um i mean well this is also the great irony of this is that while open ai is an organization you can sue because it exists as an entity the open source community is a little bit harder to sue because they don't exist as an entity you have contributors so maybe you could

SPEAKER_18: speak to that because if let's say open ai does lose this case or settle which i believe is what it's going to be one of those two things a massive settlement nine figures minimum is my prediction and uh but it will not be disclosed but it'll be at least nine figures and with some kind of licensing going forward but even if you were to do that what's to stop as you know all these open source

SPEAKER_121: projects come out there and somebody's decides they're going to roll their own model as hardware gets better and better that they just rip the new york times and you could buy the new york times archive probably from somebody in india in manila in israel there are scraping companies

SPEAKER_172: that sell these things on the what i'll call the gray market maybe illegal here maybe legal there

SPEAKER_22: maybe there's no laws there so maybe you could speak to that do you think yeah i mean all this

SPEAKER_166: is for open source open source is an interesting angle i mean i think open source had its own you know

SPEAKER_06: one of the things that was that was interesting in the wave of ai regulation we've seen you know from the eu and others was you know open source had a lot of the same objections of like um you know people

SPEAKER_00: had t-shirts with algorithms printed on it they're like okay if we open source then you know all these bad guys will get will get the code but sort of the market worked out here i i think it's tougher i

SPEAKER_06: think um you know it's going to involve calls by the right rights holders and then what i think will

SPEAKER_103: happen is what we talked about at the top of the hour which is like as the tech emerges a

SPEAKER_443: market like tech for the market for it will emerge you know we're going to get the itunes equivalent and

SPEAKER_109: i think there are some startups being funded in there they're still at this point i don't think

SPEAKER_135: it's a it's not a before this case i don't think it was being talked about enough to be a problem

SPEAKER_18: with a big enough market but now but now it is here's a possible solution let me see what you think of this i buy chat gpt for 20 bucks and it says um if you authenticate with your new york times

SPEAKER_22: subscription so your chat gpt and i authenticate with my new york times subscription then it says okay you're going to use chat gpt 4.5 t for new york times yeah and so but if you don't have the t and you do it on 4.5 and you say hey wire cutter what are the best things says hey you need to have a new york times subscription so authenticate with that and then you say hey i want to make uh star wars carry says oh you know what you have to use open ai uh you have to use chat gpt with disney plus so authenticate your disney plus and now you can start to have fun with the disney

SPEAKER_61: characters in dolly or whatever it is and then they could license that to the highest bidder because

SPEAKER_22: when i you know if you use hulu and you have hbo max or nba or use apple tv they just authenticate

SPEAKER_18: each other's subscriptions you have this sort of subscription death by a thousand subscriptions

SPEAKER_465: uh kind of concept what do you think of this concept i mean i think it's it's certainly that that

SPEAKER_257: shape of a solution it sounds right to me like i i think technically viable too right i mean

SPEAKER_00: yeah i don't think it's difficult the other interesting thing is there are a bunch of

SPEAKER_66: startups trying to do sort of like your digital life right where twitter search is like notoriously terrible you literally can't find anything on twitter and how often does it happen to me that

SPEAKER_387: i'm like oh i remember there was a tweet about that and then like i can't find it so you can

SPEAKER_26: imagine an llm that's actually trained on your entire everything you've ever consumed and then

SPEAKER_00: by the nature of if you've consumed it then presumably at some point along what you have the rights yeah there's like there's a million you know ways to do it and that's kind of the why i i characterize the lawsuit as historic is that we're at this moment where we don't know what

SPEAKER_140: the what the tech and the market solution to this is yet and it'll emerge it's just you know maybe not

SPEAKER_00: in the exact way we did it so another fun thing um andreessen horowitz there's an investing partner that she writes um i think it's connie chan she writes a lot about um china and media in china in china when you buy a kindle book or any kind of book digitally you pay by the page right so it's

SPEAKER_10: not actually a thing so the fact that we happen to buy whole books here in the us that's the market that emerged not necessarily a foregone conclusion so in your example you could have you know that

SPEAKER_140: you're like do you want wire cutter and it could literally just be like the wire cutter slice of the new york times thing or it could be like by the query or it could be some kind of rev share like

SPEAKER_477: you know as you said music industry is super sophisticated on this i think you know the words

SPEAKER_22: and kind of digital publishers let's be honest publishers are kind of dopey they've they've been dopey historically they've never really been smart about their approach legally they've never held the line they let google run amok and you know rupert murdoch got it right he's like google's nothing without us if those publications had grouped together in that era and told google listen you know the top thousand publications are going to no index unless you pay us a licensing fee and here's what we want

SPEAKER_18: google would have paid it um i'm sure and they just never had the coordination or the chutzpah that they

SPEAKER_22: needed to i think the new york times today is so sophisticated because they're a subscription-based business the move to subscription base makes them understand the value of their content and because it's subscription doesn't that change everything on a legal and technical basis about this case the

SPEAKER_21: fact that there's a firewall maybe you could explain how the subscription wall changes this a bit yeah so

SPEAKER_52: um strong plus one on new york times having kind of jumped the digital divide or jumped the digital

SPEAKER_484: you know evolution there um the new york times food app would be you know it's all a startup in its own right in the hundreds of millions in terms of revenue and you know recipes themselves are not

SPEAKER_10: copyrightable obviously the rest of it is but i pay for new york times food and i have for since it came out because it's so nicely compiled and they do the you know 10 recipes to make for the new year and

SPEAKER_27: whatever and so beautiful it's worth it exactly it's a thousand it's a thousand percent worth it but publishers and another another example you could look to here is kindle right so they did one of

SPEAKER_140: the things that i i point out in the thread and i think is or you know in the responses to my thread was so amazon kindle had uh the guy who's now the chairman of co2 ventures dan rose was the head of

SPEAKER_91: business development for kindle and basically oh good yeah he's done a bunch of um you know did a

SPEAKER_00: bunch of deals with the publishers and initially he's public about this bezos said don't tell them

SPEAKER_219: we're making an e-reader and he's like well how am i going to get them to do deals with me if i can't

SPEAKER_140: actually say and so eventually they did but you're right that that was a moment where you know the tech company kind of had this power but what was different about kindle was kindle was still kind

SPEAKER_26: of unproven at the time versus here we've got chat gpt clearly it's a runaway success it was the

SPEAKER_00: fast million people using it yeah exactly you know they're at i think it was 160 or 1.6 billion

SPEAKER_500: arr now um yeah and so they can't claim poverty or this isn't a real business this is not a student

SPEAKER_501: project so i mean even if you you know made the argument i i don't i don't know enough about publishers to to know if they're dopey but even if they were like you can see more money i knew them

SPEAKER_401: so they were they were for 20 years when they digital but now they're super sophisticated the ones

SPEAKER_22: that survived it's kind of like a darwin thing like if you survived as a publisher you're sad yeah

SPEAKER_61: makes it full stop okay now in your deck you had some other examples is there anything else in the deck that's super compelling we should rip through here before as we wrap up let's take a look i love

SPEAKER_330: i love a guest showing up with a deck amazing you've turned out to be a great guest thank you for coming

SPEAKER_30: on the program yeah super fun happy any any time you have anything legal happy happy to dive in there

SPEAKER_91: was a fun part of the thread where um people were making luigi fan art and you could kind of tell

SPEAKER_276: when the model was getting uh was was being aware of copyright so this is kind of a fun one so

SPEAKER_91: i started getting errors that said okay put luigi in the background of my chat gpt says i'm unable to create an image with luigi as it doesn't align with the content policy for image generation okay so this

SPEAKER_513: was like yesterday yeah and then okay but clearly they didn't care about the grinch and blues from

SPEAKER_219: blues clues coca-cola and then i threw in um in the background uh no it's the castle from downton

SPEAKER_79: abbey oh down now you're right yes that is yeah yeah so i'm sorry i've heard i didn't watch down

SPEAKER_408: an abbey oh it's amazing no i did so much it's so good i'm being cheapy i did watch it yeah no the movie itself if you if you just want the movie it's pretty good so for copyright violations exactly i

SPEAKER_177: mean you had trademark there with the coke and everything so yeah and then you know with the grinch it tried to actually um at different points this is kind of funny it would try to actually do different

SPEAKER_440: things i can see if i can find you that let me see if i can find the grinch that it did it did a

SPEAKER_305: grinch that was um let me pull up my my gpt history always uh scary on a live demo yeah always

SPEAKER_523: scary to pull it up you could have all kinds of interesting exactly no no i i will pull it up because

SPEAKER_219: because it is funny i think i asked for a green character that hates christmas or something like that and yeah and what it did this was really fun so i was with my three-year-old and she wasn't fooled

SPEAKER_177: like this one she did not think was the grinch like she said grinch but he's kind of different he's

SPEAKER_133: got like kind of looks like sesame street character yeah you know that this is clearly not the grinch but later in the thread i'm like that's like so clearly the grinch right yeah and then you know

SPEAKER_132: also the grinch but then this one it kind of goes back to a pixar grinch it goes back to a pixar grinch

SPEAKER_219: so it's like not really right and then this one is like like a wizard like what do you what even is

SPEAKER_532: this disney disney maybe a disney grinch i don't know yeah so i asked for nordic princess sisters

SPEAKER_426: obviously on an elsa you know so they're right there with the braids you know so well this is the

SPEAKER_36: the thing you can you can know the the keywords very easily of these are ip so if you just said hey give me all the disney characters all the marvel characters put their names in here people ask for

SPEAKER_537: that just tell them it's against it won't do it yeah moana it just says no if he's just saying

SPEAKER_36: make me moana it won't do it yeah and so i did this where i was trying to make a my bulldog into darth vader and then it says we cannot can't can't do that i said make a sith lord bulldog and it's like

SPEAKER_192: yeah of course here you go so i think they're trying to get this copyright thing under control but the

SPEAKER_36: truth is especially for images uh there are there's a finite number of styles in the world and so

SPEAKER_33: so it's very clear that they have a pixar style and they have a marvel style and they have stolen those styles those are not their styles so maybe you could speak to the concept of a theme or a style the pixar style is unique to them is that defensible and if you if they if you say i want to make this

SPEAKER_101: in the style of pixar should a language model that makes images be able to make you a pixar character

SPEAKER_482: should they be able to do that yeah i i think the idea of the pixar style should they be able to do in that style or inspired by i think so i mean this is like okay you know around face and you know i

SPEAKER_10: actually represent this is fun this actually came out one of the cases i worked on at my firm was barbie versus brats so the founder of um mga which makes brats worked at mattel which is very active rights

SPEAKER_136: holder they sue people for lots of barbie things and then obviously the barbie ip is super valuable

SPEAKER_10: billion dollar maybe this summer so he worked there during and one of the defenses was that

SPEAKER_350: you know it wasn't infringement because it there's only so many ways to make a doll so in the office

SPEAKER_179: really fun we had these like big doll heads everywhere and we looked at anime we looked at

SPEAKER_30: whatever and the case also 10 years of litigation but should you be able to make a big headed doll

SPEAKER_140: like in in the style of a brats doll or you know whatever probably i mean so i don't know i i think

SPEAKER_72: it'll be tough where you can ask gpt now to give you a taylor swift style song and and it does it does

SPEAKER_00: a pretty good job so where it's something new you know a little bit better that's why the exhibit j with the 100 verbatim things is so important so copyright law isn't gonna is it gonna stop um

SPEAKER_179: um you know make me a pixar style character of you know jar mustard or whatever like you know like

SPEAKER_33: whatever you want to pick it does seem that some people are confusing non-commercial use with commercial use so they're like well i could draw a jedi bulldog is that illegal if my daughter makes one versus

SPEAKER_22: i'm charging 1995 for a product to do this and at scale with 1.6 billion in growing in revenue so can

SPEAKER_296: you explain to people why you know these are two different things in the eyes of the law yeah so

SPEAKER_177: that was actually a big issue in the betamax case so the betamax case was was vtrs or what is now vcrs and the funny thing happened which is disney was one of the groups that sued sony and the supreme court held you know there is a substantial non-infringing use that's the language which is time shifting so

SPEAKER_26: you want to watch the game you will use your vcr you record it and then you watch it later and there was all kinds of evidence this is how people were using vcr nevertheless disney was one of

SPEAKER_140: the petitioners um in that case i think it was less than six years later disney was the single biggest

SPEAKER_00: seller of vcr tapes and so literally like the tech finds a way right and the market finds a way and so in terms of commercial use you know there were a bunch of people in the comments and some

SPEAKER_140: beautiful article in i think it was the guardian about um i can't remember his name the the guy who

SPEAKER_566: came up with mario the game designer the famous guy yeah i know he's right yeah anyway shiguro

SPEAKER_57: i think yeah anyways saying that he was the architect of children's dreams for a generation

SPEAKER_00: which is like a beautiful quote but essentially like if people you know making actual marios okay i think that nintendo should be able to go after that but making mario style video games

SPEAKER_61: no i don't think they should be able to go after that try to inform the audience of where we think

SPEAKER_18: this is going the prediction for what happens in the long term here with this case and then how it affects the wider industry so it does seem the number one possibility in all cases of a copyright claim is settlement so i guess that would be one possibility settlement then there's go to the map and take many years um and then get a judgment right that's a second possibility here so and then i guess there's

SPEAKER_61: the courts throwing this out or dismissing it right or something so are those the three buckets we should

SPEAKER_33: be looking at here like either new york times wins or loses or settlement happens those are the three

SPEAKER_575: possibilities broadly speaking yeah i mean winning and losing is like you know even in some of the

SPEAKER_167: famous cases there's a process where it gets remanded so sent back so some of these things for the infringement that or you know if it is infringement the things that have already happened your exhibit j's

SPEAKER_26: type of examples you know the new york times will preserve claims on that um but as open ai makes changes i think you're right i think it's either the case gets settled and one way that could happen is you know they announce some kind of copyright holder symposium or something and new york times is like the head of this consortium and it's like some kind of opt-in system where you know new york

SPEAKER_140: times content is part of it and publishers can go there and maybe they get a little royalty you know

SPEAKER_405: something accelerated similar to what the music industry has where there's a very sophisticated thing

SPEAKER_140: where you need to get the mechanicals and you need to get the performance rights and it's it's it's there's like a known system and libraries for that we'd call that a marketplace solution emerges

SPEAKER_582: exactly so like one possibility is like a marketplace solution another possibility is um you know the

SPEAKER_140: court comes out with a ruling that says llms just the fact of developing an llm is not copyright

SPEAKER_52: infringement provided you have some kind of substantial protections and it could come out with a test that

SPEAKER_66: says okay if somebody asks for luigi or moana you know anything that's like very obvious that should

SPEAKER_350: be fixed and there should be measures taken to address that another possibility which we wasn't on

SPEAKER_27: the table is congressional action that's very possible so we actually have that that has happened

SPEAKER_452: where courts have i'm sorry congress has codified things i mentioned fair use in the 1976 copyright act

SPEAKER_246: with the internet we have the dmca and it's a very robust system right somebody asks you to take something down you know they can contest it so an amendment to the dmca also possible there's a

SPEAKER_177: california senator who um he was a cs major super cool um so california i think senator um or a u.s

SPEAKER_10: senator from california who um is proposing ai regulation and and that could be a possibility

SPEAKER_61: so that would mean whoever gives the most money to be a bit cynical here whoever gives the most money to their senators congressmen whatever politicians and has the most influence in the deepest pocket for these old people uh the juryocracy geriocracy is that what they're called

SPEAKER_97: geritocracy or something that that run uh washington you know that would kind of feel like it would be

SPEAKER_22: in favor of the copyright holders because copyright holders in the united states we really do protect

SPEAKER_36: them uh in a major way so they could just say listen you got to get permission full stop you know

SPEAKER_06: that's possible i do think you know like i said open ai has been very savvy and thoughtful in a lot of ways and you know part of sam altman's sort of charm of charm tour last call was on this like they

SPEAKER_26: know who he is and he's like look i'm not zuck and i think he was very successful in in showing that he wasn't that he's not duck and so you know that's another possibility i think you know the europe

SPEAKER_00: europe did regulate ai and they were very proud of that so far it has not been regulated here but

SPEAKER_10: i think there will be a situation and and this is um google made a bunch of good law on um

SPEAKER_594: on that sponsored search so initially if you search for a term on google if you search for

SPEAKER_476: you know acne acne's competitor can buy that or if you search for ford you can get a chevy ad and yeah

SPEAKER_00: that was actually it wasn't clear that that wasn't trademark infringement google spent about 10 years litigating that issue and just won and i've seen legal theorists make the case that part of the

SPEAKER_26: reason google won is that judges love google because it's so useful and so i think similarly for chat gpt it's so useful for us lawyers in particular because we we are our stock and trade

SPEAKER_91: is words that um either i i don't think that opening i will lose here i actually i'm going to disagree

SPEAKER_177: with you i i think that open ai will win some key points you know they'll probably have to make some concessions they'll have to have a copyright you're in center and they'll have to um you know have dmca

SPEAKER_276: style things but i don't think they're going to straight lose on the fair use or at least not

SPEAKER_130: without going all the way to the supreme court fascinating i'm taking the other side of that i

SPEAKER_121: think it's going to be we're going to come down in favor of for people who have at scale copyright libraries you're going to need their permission ahead of time and if you've used it i think you're going to have to unwind it which is what i i agree with you that they're probably in the process of doing that sam's pretty smart and i think you're just it's easier to just be like you know what we took it out we redid it it's no big deal they could do that there's been some memes on that on

SPEAKER_548: the um you know the like square jaw meme and it's like take my content out and the guy's like fine

SPEAKER_18: sure um that could be possible yeah i think that's a that's a distinct possibility i do think you bring up a really good point which is having seen up close and personal what happened with uber and also airbnb i wasn't an investor in that one unfortunately because people loved the service so much and became addicted to it by the time the lawsuit started to pile up when austin got rid of

SPEAKER_330: the city of austin got rid of uber and lyft at one point people went nuts and then campaigns i mean it

SPEAKER_615: was amazing yeah and their public policy it was incredible like doing that the one distinction i

SPEAKER_10: would make so uber is a great example where like i even tell i advise my my clients like product market fit is an incredible drug right it really makes your lawsuits better and honestly uber every

SPEAKER_179: time they had a lawsuit their usage just went up like so it's like right away also for uber yeah this

SPEAKER_10: one was slightly different is uber was like in the trenches city by city versus this is federal so you run

SPEAKER_30: into some of the the gerontocracy or whatever it is you say that's a fair point too airbnb the same

SPEAKER_18: thing you know people were like well i want to have choices of where to stay and i want to be able

SPEAKER_22: to monetize my home or my second home or my guest house and it just felt like those companies were on

SPEAKER_18: the right side of history vis-a-vis consumer choice lower prices etc and i think that's what chat gpt really has going for them which is we all want to be able to make luigi characters and make a birthday card for you know our family or make a party invite that has the silver surfer and marvel characters on

David Friedberg: it so if that's the case we're kind of like well that's kind of the world we want is where we get to

SPEAKER_27: use your copyrights without your permission it totally is but i mean this really gets like it goes back

SPEAKER_00: like kind of way back machine like i remember when i was at yahoo and yahoo was trying to launch like a subscription or a paid e-card service and i was like i'm not gonna pay for that i can get that free on blue mountain and it just happened to be that ads is what emerged but one of the things the europeans

SPEAKER_26: point out and i think a lot of thinkers point out is that ad supported tech is not necessarily how

SPEAKER_00: it had to be no it could it could have been another way and so you know similarly here like it could be a subscription it could be a licensing like there's many different ways and it'll be

SPEAKER_350: interesting to see like eventually the law catches up it just like you said takes time i think now

SPEAKER_18: this is really very clarifying to have you on the program because the market-based solution is the likely case here so i think that's where i come to after an hour with you market-based solution always the

SPEAKER_121: best solution parties get around a table and and hash it out and then there's of course some liability for the mistakes that open ai made so they pay a speeding ticket they give them a hundred million dollars as part of this new thing no harm no foul they can afford it they got 10 billion laying around it's all good but i like the market-based solution and i think there's something very interesting in how the cable tv system worked or or how bundling and subscriptions work now and authentication um because chat cpt knows how to do that sam walton and the team over there know how to do that like they already have api keys so the new york times description is like an api key to unlock some things in the new york times right it could be like a really cool feature like maybe the open ai

SPEAKER_36: markets to people hey you if you have a new york times subscription this is going to get a lot better for you because when you ask your queries it's going to give you a bunch of stuff and say and also from the new york times for further reading boom boom boom uh and would you like us to bookmark there's a world of possibilities of how open ai could work with you know new york times to make interesting stuff vis-a-vis recipes hey you i want to ask it about recipes here's the i took a picture of my refrigerator and then it went to the new york times food app and told me possibilities of what i can make based on my spice draw you know that's kind of interesting it's amazing and that was one of

SPEAKER_627: the things you know i mentioned that i spent uh you know three and a half years at amazon and that's

SPEAKER_26: kind of how bezos thinks and it was woven into everything where it was like okay how can we have this tech work together how can we get paid for one piece of content multiple times how can we turn something into self-serve like you know i loved mark andresen's ai piece obviously he's super in the ai

SPEAKER_405: optimism phase but i'm very optimistic too for all these like daily life fun use cases so yeah good stuff

SPEAKER_18: as career technologists you and i it's pretty clear that this is the one this is the chosen one this technology is the manifestation of everything that's come before it from the pc revolution to the

SPEAKER_296: internet to mobile and cloud and all this and then big data all of this is built up to this moment in

SPEAKER_59: time and so it's really important we get it right chuchelia you are amazing where people find more of

SPEAKER_257: you yeah so you can follow me on twitter it's chuchelia zinn um or i am pretty active on linkedin as well i'm launching my own startup which is ai for lawyers yeah oh i know and i know an angel investor

David Friedberg: yeah he's really good at getting you your first hundred customers amazing yeah no it's excellent

SPEAKER_301: does it have a name yet or um yeah it's gonna be general counsel ai so that's who i am and i thought

SPEAKER_91: okay gcai but love it essentially still sort of i guess uh you know stealth because we're developing the product but i have an engineering co-founder and we're we're pretty well well there but to the

SPEAKER_10: point that we talked about like llms are wordsmiths right so what are lawyers also wordsmith so i've

SPEAKER_00: had you know when you said that this is the chosen technology i had that feeling very strongly i've

SPEAKER_91: never been excited about legal tech before it's like you know clm snooze but this was actually like management exactly you know but like this is something where to the cnd point i could write a cease and desist letter and i just say like here's the here's the infringement here's the whatever and

SPEAKER_10: make very light edits and a one-hour task becomes a five-minute task not even and i give training

SPEAKER_350: classes for lawyers you can find me on maven i know you you're friends with gagan and them too so

SPEAKER_646: i teach on maven because i just have so so much energy that i got to get out right so fantastic

SPEAKER_130: everybody check your maven and we'll put some links in the show notes you are awesome please come

SPEAKER_406: back we should do a check-in when we yeah let's do it this is so fun okay happy to do it have a good

David Friedberg: one jason thanks all right and we'll see you all next time on this week in starters bye bye