AI Stealing from Artists is just Business as Usual in the Tech Industry

What Big Tech's IP infringement practices mean for artists' copyrights

It’s the fall of 2011. Most tech coverage is absorbed in speculation around the upcoming spring, when Facebook is set to IPO. However, one man’s focus is on another giant in the search, advertising, and social networking space.

Erin-Michael Gill, Chief Intellectual Property (IP) officer for MDB Capital, an investment bank specializing in evaluating the IP of both public and private companies, realized that Yahoo! was a “treasure chest” of patents. Between 2001–2007, Yahoo! was granted on average 40–50 patents per year and continued to ramp up their IP efforts with 310 in 2010 (Jackson, 2011). Gill valued the company’s IP separately from its core business with applications in paid search, display, and social networking. This means he felt the IP could be sold separately to the company. In its 1,100 patent portfolio, there was pay-per-click advertising, display ads, social networking, data center management, unsolicited email processing, and digital content creation and distribution (Jackson, 2011).

In 2004, Yahoo! almost derailed Google’s IPO by suing over the violation of its GoTo.com pay-per-click advertising with Google’s AdWords model. Considering that Google had made $29B in revenues related to the GoTo.com patent (Jackson, 2011), many assumed that Yahoo! would drag out the lawsuit for maximum benefit. So it shocked many when they settled only weeks before Google’s IPO date for shares of stock.

With the Facebook IPO on the horizon, Gill also began comparing the two companies’ portfolios. He quickly realized that the exponential and unprecedented growth of Facebook seemed to be built upon Yahoo!’s technology.

“Their {Facebook} patent portfolio didn’t really map to what they were actually developing…Yahoo! had roughly a 1000 patents and Facebook had less than 100…and how often Facebook was citing Yahoo! was more than 2 to 1” — Erin-Michael Gill (TechCrunch, 2012)

Gill predicted that when Facebook would be at its most vulnerable, i.e. before the public offering, this IP risk would come to the forefront. Unlike many mainstream media outlets at the time, Gill was not surprised when Yahoo! filed this lawsuit months before the IPO date. In the words of Clint Eastwood’s Dirty Harry, “Go ahead. Make my day.”

What ensued was a fairly predictable legal battle with critics appearing on both sides.

Many predicted Facebook would pony up a pile of cash, which would of course be larger than the Google deal, to clear the runway for their IPO takeoff. Mark Cuban, who had made a fortune when Yahoo! bought Broadcast.com, sarcastically wrote that he hoped Yahoo! would crush Facebook with a $50B payout. He argued that this case would be a watershed moment to demonstrate the absurdity of patents in the technology industry (I Hope Yahoo Crushes Facebook in Its Patent Suit | Blog Maverick, 2012).

Facebook flexed their muscles by countersuing, claiming the reverse of Yahoo!’s initial claims. Paul Graham, co-founder of Y Combinator who also sold his company to Yahoo! in 1998, showed his support for Facebook by stating “I’m impressed that Facebook is fighting back instead of settling to make the IPO easier, as companies so often do, and as Yahoo! probably expected them to” (Sloan, 2012). It also didn’t help that Yahoo! had lost their awe factor. Citing lack of strategic direction and internal leadership change-ups, Andrew Nusca (2011) compared Yahoo! to a “big tech dollar store, stocking anything that would make a buck without any rhyme or reason”. In contrast to Facebook’s unicorn status, Yahoo! was the bitter-ex, the aging senior, the lackluster star trying to shakedown their young rival.

With a revolving door of CEOs, Yahoo! ousted Scott Thompson, under whose leadership the short-lived suit was filed. His replacement, Ross Levinsohn, and the board moved to settle the lawsuit in the summer of 2012. In the deal, the two companies agreed to some cross-licensing with a new advertising partnership. Making peace with your enemy can make them your partners. Learning from their mistakes, Facebook also changed course on their IP strategy. In April 2012, Facebook spent $550M to add 650 patents from Microsoft, who had acquired those patents from AOL (Pepitone, 2012).

A 2018 review of Facebook’s patent portfolio by Sahil Chinoy revealed their commitment to collecting personal data with treasures such as:

• Classifying your personality

• Romantic relationship prediction

• Life change prediction for members in a social network

• Routine deviation notification
  

AI stealing from artists is not just an ethical dilemma.

The recent pushback of authors, Hollywood actors and writers, artists, and musicians who criticize the use of their works in training AI models, is not simply an ethical dilemma. It’s a battle over livelihood, creative expression and intellectual property. Big Tech seemingly has endless resources to challenge their rival’s market share through IP disputes. However, if the only path to change is challenging the unlicensed use of their creative property through lawsuits, artists will never have the resources to challenge AI stealing artists' data.

IP litigation continues to be a top concern and activity within the tech sector. In fact, the importance of intellectual property is a hallmark of the current tech landscape. This ruthless protection of IP is behind some of the largest verticals in operating systems, hardware, algorithms, social media, data centers, etc. However, these same tech companies also have a long history of “building upon” existing IP as they scale. Even after a settlement or ruling, companies continue this same wonton disregard for IP. It’s the mantra — better to ask forgiveness than permission.

IP infringement in the tech industry is not just a few bad actors. It’s business as usual. Facebook had nearly 900M users before (TechCrunch 2012) before Yahoo! moved to challenge their use of patented technology. Similarly, AI companies are scaling so fast while many artists don’t even know their works have been used for AI training because their creative property is scraped from the web in unethically obtained datasets. “AI is another upward transfer of wealth from working artists to Silicon Valley billionaires” (Crabapple, 2022). How can David beat Goliath if Goliath becomes Godzilla?

Sharing artwork is not granting permission

There are four main types of intellectual property — copyright, trademark, patent, and trade secrets. In general, any original creative work has certain rights to that work under copyright. Even if an artist is commissioned to create a specific work, they typically retain the rights to that painting or ghost-written book, even if they don’t physically own it. This gets more complex because artists are just as diverse as the mediums through which they create. Even if the original work is being reproduced, transformed or parodied, there are copyright protections to ensure the fair use of that work.

It’s important to recognize that artists would not even be in this situation without the immense access and ability to scrape our personal information from the Internet that tech companies possess. Sharing work online is important to build a platform, reach an audience and monetize your work. In simplified terms, me sharing my resume on LinkedIn in hopes of finding job opportunities or clients is the same situation that artists face when they share their portfolio. Everyone should have free access to the Internet.

Besides monetary and reputational benefits, many artists share their work because they have something to say. And they do this even at their own risk.

“Artists work within the public sphere, they are more visible. This makes them an easier, softer target for people who want to silence their work. They face persecution in ways that are necessarily obvious. Books aren’t allowed to be published, exhibitions are closed down, shows are cancelled.” — Elisabeth Dyvik, UNESCO

Online platforms provide a channel to reach your audience but they also open you up for digital harassment. Creative expression is an act of courage. Artists reflect and challenge social norms. So supporting their rights, supports our collective ability to challenge power systems and sociocultural norms. If we recognize and value creative property with the same importance, it becomes very clear that tech companies’ copyright infringements are also threatening our democratic freedoms.

Big Tech is abusing the patent system.

Article 8 of the US Constitution lays the bedrock of US intellectual property law. Specifically, it grants inventors and authors “exclusive right” to their writings and inventions. Patents play an important role in driving innovation and developing economic strength. One key governing body that upholds this delicate balance is called the Patent Trial and Appeal Board (PTAB).

PTAB is a relatively new addition to the federal landscape, created in 2011 by the America Invents Act (Forbes, 2023). It’s a board of unelected judges meant to be a low-cost alternative to district court litigation but has instead become a powerful mechanism for large companies to exert power over small innovators. For example, 84% of patents challenged in PTAB were partially or wholly invalidated compared to 30% when challenged through federal court (Forbes, 2023). The evidence standards are lower and patent challengers can repeatedly go after the same patent. The PTAB board also tends to heavily favor the patent challenger, who also happen to often be Big Tech patent infringers.

Big Tech challenges patents on both fronts — PTAB and the federal courts. This also means that patent holders must defend their IP on multiple fronts. The US Patent Office tried to stop this systemic abuse by allowing patents to be heard in court before they are heard in PTAB. They reversed their decision a year later which corresponded to a large uptick in PTAB cases (Forbes, 2023).

The blatant abuse of the system shows the careful maneuvering and lobbying the Big Tech industry can achieve in order steal the technology of smaller competitors. This type of lobby spotlights the limited reach of the government to enact change. As we see patent portfolios at these tech companies exponentially grow, we must ask ourselves, can we expect these companies to act in our best interest given their business practices?

Fortunately and unfortunately, one our biggest flexes to enact change in the marketplace is to vote with our dollars. We can limit our use of emerging AI technologies to solutions based on ethical data collection. We can follow the recommendations from artists such as Creative Common’s guidelines for making generative AI work for everyone. We can hold artists’ work to the same value that tech companies hold their patents. They are valuable on their own and worthy of a legal and financial battle.

References:

Jackson, E. (2011, November 7). The owner of Yahoo!’s patents could cripple Facebook’s IPO aspirations. Forbes. https://www.forbes.com/sites/ericjackson/2011/11/07/the-owner-of-yahoos-patents-could-cripple-facebooks-ipo-aspirations/

Yahoo! and Google Resolve Disputes — News announcements — News from Google — Google. (n.d.). https://googlepress.blogspot.com/2004/08/yahoo-and-google-resolve-disputes.html

TechCrunch. (2012, February 29). Erin-Michael Gill on the Yahoo — Facebook patent dispute [Video]. YouTube. https://www.youtube.com/watch?v=zPDHEX90-40

I Hope Yahoo Crushes Facebook in its Patent Suit | blog maverick. (2012, March 13). https://blogmaverick.com/2012/03/13/i-hope-yahoo-crushes-facebook-in-its-patent-suit/

Sloan, P. (2012, April 4). Facebook vs. Yahoo: Who’s shaking down whom? CNET. https://www.cnet.com/tech/services-and-software/facebook-vs-yahoo-whos-shaking-down-whom/

Nusca, A. (2011, September 8). 4 chiefs, 4 years: Yahoo’s leadership problem. ZDNET. https://www.zdnet.com/article/4-chiefs-4-years-yahoos-leadership-problem/

Pepitone, J. (2012, July 6). Yahoo and Facebook settle patent brawl. CNNMoney. https://money.cnn.com/2012/07/06/technology/yahoo-facebook-patent-settle/index.htm

Chinoy, S. (2018, July 17). Opinion | What 7 creepy patents reveal about Facebook. The New York Times. https://www.nytimes.com/interactive/2018/06/21/opinion/sunday/facebook-patents-privacy.html

Crabapple, M. (2022, December 21). Op-Ed: Beware a world where artists are replaced by robots. It’s starting now — Los Angeles Times. Los Angeles Times. https://www.latimes.com/opinion/story/2022-12-21/artificial-intelligence-artists-stability-ai-digital-images

UNESCO: We must protect artists and defend the right to freedom of expression! (2023, April 20). UNESCO. https://www.unesco.org/en/articles/unesco-we-must-protect-artists-and-defend-right-freedom-expression

Forbes, S. (2023, August 15). Big tech is abusing the U.S. patent system. Time for Congress to step in | Opinion. Newsweek. https://www.newsweek.com/big-tech-abusing-us-patent-system-time-congress-step-opinion-1819256