Media & Entertainment: 10 Legal Developments Impacting Business and Legal Decisions

1. AI — “Fair Use” and the Creation of GenAI

In 2024, media and entertainment businesses will focus on whether the longstanding tenet that content is king has been disrupted by the “fair use” affirmative defense being deployed in the courts by artificial intelligence (AI) technology companies operating platforms that generate creative works based on a user’s prompts, known as generative AI (GenAI). Under the Copyright Law of the United States, fair use is an affirmative defense to what would otherwise be copyright infringement. GenAI companies, which are defendants in various copyright infringement lawsuits, assert they don’t need permission from media and entertainment companies to train GenAI platforms on copyrighted content owned by these companies. They argue that the training constitutes fair use under the Copyright Law and that works generated by GenAI platforms are not derivative works of the copyrighted content on which the platforms are trained. The spotlight will shine on decisions the courts make regarding the merits of the arguments of GenAI companies.

2. AI — “Human Authorship” Requirement for Copyright Registration

A recent decision by the US Copyright Office Review Board could have far-reaching implications for works of art created in part by GenAI. On December 11, 2023, the Review Board affirmed a refusal to register a work of art partially created by GenAI, concluding that the work lacked the “human authorship” necessary to claim copyright protection. This decision marks the third time in recent months that the Review Board issued a written opinion analyzing the impact of GenAI on copyright protection and continues a trend of courts and the Copyright Office rejecting copyright protection for AI-generated works. This decision has significant implications for rights owners. If a work contains too much GenAI content, it could lead to a loss of copyright protection for the work, either in whole or in part. Moreover, copyright applicants must disclose the inclusion of AI-generated content in their copyright applications. Failure to do so can lead to cancellation of the copyright registration and, consequently, loss of access to federal courts and the ability to seek statutory damages from infringers. General counsel will want to work closely with creative teams to implement best practices and policies to help reduce the risk that any particular work product will be unprotectible under US Copyright laws.

3. Defamation — High Stakes, High Damages

The past few years have seen an increasing number of highly publicized, high-dollar defamation cases brought against media and entertainment companies or public figures. Already this year, a jury has awarded author E. Jean Carroll a large amount in punitive damages in her defamation action against Donald Trump, and a New York court has denied Fox Corporation’s motion to dismiss in Smartmatic’s defamation action against it, meaning that case will proceed to discovery. 

These cases underscore important principles for companies in the media and entertainment space. First, a parent company can be held liable for its subsidiary’s defamatory statements. Second, there appears to be an appetite for increased punitive damages where a defendant continues to repeat their defamatory statements. To protect against the risk of defamation liability, media and entertainment companies should consider carefully whether the statements that they publish — or statements published by their agents or subsidiaries — create a risk of defamation liability, and vigilantly protect against repetition of those statements. 

4. AI — Expanding Protection for the Right of Publicity

The right of publicity gives a celebrity, musician, or other individual the right to prevent unauthorized commercial use of his or her name, image, voice, likeness, or other aspects of identity. There is no federal right of publicity; instead, the right arises based on varying state laws and common law. The rise of deepfakes and advances in GenAI have caused concerns regarding the easy ability to mimic likenesses and voices. US Congress has taken notice. 

A discussion draft circulated by US senators in October 2023, the NO FAKES Act of 2023, would create a civil action for producing, publishing, distributing, or transmitting a “digital replica” of a real person’s image, voice, or likeness without consent (with some exceptions). A bill introduced in the House of Representatives in January, the No AI FRAUD Act, would create a civil action for certain conduct involving “digital depictions” and “digital voice replicas” of real people without their consent. These proposed bills would not preempt existing state law rights of publicity but create an additional remedy for certain unauthorized uses of a person’s likeness. 

5. Essential IP Audit — IP Rights Should Reflect Technological Developments

As AI, digital content, and the metaverse continually evolve how goods and services are provided to consumers, media and entertainment companies themselves continually need to adapt their intellectual property (IP) rights and legal options to face these new challenges and opportunities. One such step is to review form agreements — such as contracts with production companies, talent, licensees, and affiliates, online terms of services, and privacy policies — to confirm that they have secured their current and future interests for real-world scenarios and digital, virtual, augmented, and electronic platforms. Another step is to audit trademark portfolios for potential gaps in coverage for virtual goods and/or services and strategically fill those gaps. As a reminder, the US Patent and Trademark Office (USPTO) requires an applicant to at least have a good faith intent to use the trademark in connection with all goods and services in an application at the time of filing. Failure to meet this requirement can render the application and any resulting registration void.

6. Sports — Rise in Streaming

The sports media landscape is experiencing increasing fragmentation with the rise in streaming services and digital platforms. We have seen a decline in the traditional modes of broadcasting. Gone is the old model of having 82 games broadcast on a combination of over the-air and cable broadcasters. In 2024 and beyond, the competition to broadcast professional league content will continue to increase, with streaming services and digital platforms willing to pay a premium for these rights. This trend has already led to further realignment of the sports media landscape, as evidenced by the 2023 bankruptcy petition filed by Diamond Sports Group, which provides regional television broadcasts for teams in the National Basketball Association (NBA), National Hockey League (NHL), and Major League Baseball (MLB). As leagues enter into partnerships, rights holders must carefully consider how to allocate their rights to maximize revenue.

7. Fair Use — Post-Warhol Landscape

The US Supreme Court’s ruling against artist Andy Warhol’s estate in the copyright dispute over the use of a photograph of Prince for a Vanity Fair cover continues to raise questions concerning the wide-reaching implications for new media and GenAI in 2024. In a 7-2 decision, the Court found the “purpose and character” factor of the copyright fair use analysis did not weigh in favor of a finding of fair use where the use of a new work encompassing an original work shares the same purpose as the use of the original work and is commercially licensed. Although the addition of a new meaning or message is a relevant consideration in assessing the purpose and use of a work for purposes of determining fair use, it is not dispositive. As companies and executives continue to grapple with how to use new AI technologies, this case is forcing leadership to more carefully consider whether the new works created could qualify as transformative, and whether they go beyond that required to qualify as a derivative work.

8. Publishing — Book Bans

Many states have enacted sweeping laws that broadly require the removal of books from public or school libraries. Often, these laws have limited or no basis in existing constitutional jurisprudence, do not provide guidance to educators regarding how to implement the laws, and include provisions that penalize educators for failure to implement the laws.

An ArentFox Schiff team recently obtained a preliminary injunction preventing the enforcement of one such law, which provided for the removal of books from schools and classroom libraries. In that case, our clients included the world’s largest trade publisher, Penguin Random House, four award-winning authors, the Iowa State Education Association, teachers, a librarian, and a high school student.

9. Data Privacy — Relevant to the Expanding Use of Technology

In 2018, the European Union’s (EU) General Data Protection Regulation (GDPR) took effect, and California enacted the California Consumer Privacy Act (CCPA), later amended by the California Privacy Rights Act of 2020 (CPRA). This was supplemented by 13 other new comprehensive privacy laws around the United States. Since then, privacy issues have taken a front-row seat for media and entertainment companies. The GDPR (and its counterpart in the United Kingdom (UK)), as well as US state privacy laws, impose a slew of new requirements on the industry, from opt-outs for targeted advertising and profile creation to assessments for high-risk data uses, to honoring individuals’ requests to assess, correct, and even have their personal information deleted, in addition to detailed contract requirements for sharing personal information with vendors and other third parties.

The GDPR and UK law also restrict the cross-border transfer of personal information, even among affiliates. There is also a large and growing trend involving private privacy litigation and regulatory enforcement in the United States. Media and entertainment companies can find themselves defending these cases where they deploy third-party chatbots, cookies, pixels, and other tracking technologies, videos, session replay technology, biometric information such as AI-enabled facial recognition technology or collect fingerprints (such as for wage and hour purposes), and common analytics and advertising services.

Now, more than ever, it is important to review your contracts and to identify and remediate these issues on your digital properties to avoid regulatory and private privacy enforcement.

10. Trademarks — Post-Jack Daniel’s Landscape

The Supreme Court’s landmark decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC (US 2023) has invited uncertainty about the future of the so-called “Rogers test.” This test, often relied on by media and entertainment companies when conducting title clearances, states that the unauthorized use of a third-party trademark in the title of an expressive work constitutes trademark infringement or false endorsement only if (1) “the title has no artistic relevance to the underlying work whatsoever,” or (2) if there is artistic relevance, where the title “explicitly misleads as to the source or the content of the work.” Media and entertainment companies should be aware that titles that were previously held defensible under the Rogers test are now being remanded for consideration under the Jack Daniel’s precedent, with some courts finding that Rogers does not apply. Under Jack Daniel’s, if a third-party’s trademark is used as a source identifier for the defendant’s own goods or services, even if the defendant’s use also has an expressive function, the case will not be reviewed under the threshold Rogers test. Instead, courts will now conduct standard likelihood of confusion analysis to determine whether the use is infringing.

At the end of the day, while many titles that arguably include third-party trademarks can still be cleared for use (e.g., based on traditional likelihood of confusion and nominative fair use analysis), the cost of defending trademark infringement claims regarding show and film titles is likely to increase. This is because cases are less likely to be resolved at the motion to dismiss stage given the fact-specific nature of determining whether a term is used as a “source identifier” and whether there is a likelihood of consumer confusion.

Additionally, companies should not assume that the title of a single work, like a movie or book title, will always be analyzed under the Rogers test. While the title of a single creative work is not registrable at the USPTO, some courts have found that the title of a single work can be used as a source identifier, meaning such titles would not be analyzed under Rogers, but would instead be evaluated based on traditional likelihood of confusion standards.