If you’ve already created your estate plan (i.e. a will and trust, plus a few other documents), then you’re ahead of most of the American population. However, things can still go wrong, even when you’ve created a proper estate plan. Here are a five common estate planning mistakes:

1. Failing to fund your trust.

I covered this in my previous blog article. Your trust is only in charge of the assets it owns in its own name. Everything else is still part of the general estate. If you do not change the title to your assets or, at a bare minimum, declare what assets are considered to be trust assets, then your trust will not be funded, and your estate will most likely still have to go through probate.

2. Failing to properly title your assets.

This is the flip side of not funding your trust. Sometimes, a person does fund their trust, but then they later acquire a new asset in their own name. When they die, that asset is still in their name, and there is nothing to suggest that they intended it to be a trust asset. If the asset was worth enough, then it will have to go through probate. This is only slightly better than not funding your trust at all because, at least in this case, you’re only probating one or two assets rather than the full estate.

3. Failing to plan for future disabilities.

Most people with a special needs child or beneficiary will make sure to include a Special Needs Trust in their estate plan so that the beneficiary is provided for and still has access to government benefits for the permanently disabled. However, many people do not consider the fact that not all disabilities are genetic. A person could get injured later in life, and that injury could be severe enough that they can no longer support themselves. In that instance, an inheritance is more of a curse than a blessing because an inheritance will disqualify them from government benefits for as long as they have the money (and applying or re-applying for government benefits is a nightmare all its own). If they want to keep their benefits, they would have to create their own Special Needs Trust, and a first-party Special Needs Trust is not as beneficial as a third-party Special Needs Trust (i.e., one that you create for them, as opposed to one they create for themselves). That’s why it’s a good idea to always have a Special Needs Clause, allowing the trustee to create a Special Needs Trust just in case it becomes necessary for any of your beneficiaries.

4. Failing to update your trust.

Unfortunately, estate planning is not a “one-and-done” process. Life happens, and updating your estate plan as your circumstances change is important. Otherwise, you have cases like Heath Ledger’s, where his child did not inherit from his estate because he failed to update his estate plan after she was born. Michael Crighton had a similar issue, where he did not update his estate plan when he knew he would die before his wife had their baby, and his estate plan stated that only the people he referenced by name could inherit from the estate. After his death, his adult children used his estate plan to insist he did not intend for that child to inherit. You also have issues where all the nominated trustees are deceased, or someone was gifted an asset that’s no longer in the estate (and that was the only gift they were supposed to get), or the detested ex-spouse gets a chunk of the estate because they were never formally removed, etc., which leads to my next point.

5. Failing to explicitly disinherit heirs.

If there is someone you don’t want to inherit from you, and they are (or could be) entitled to an inheritance under the law, you want to make sure that you mention them by name and explicitly state that they cannot inherit from you. Otherwise, they could claim they were unintentionally omitted, and your estate could be tied up in litigation for years. For example, I had a client some time ago whose husband had recently passed. About two years after their last estate plan update a woman approached him, claiming to be his child (from before his marriage, in case you were wondering). According to the widow, the more he got to know this woman claiming to be his daughter the less he wanted a relationship with her, but he never updated the estate plan. After his death, the woman petitioned the court to inherit as an omitted child. Since he had never stated his position one way or the other, the case proceeded to litigation. There are also cases where a known child was not included in the distribution list, but since they weren’t specifically disinherited, they had grounds to go to court for a share of the estate. All told it’s much better to explicitly state that you do not want them to inherit (and if you want to go the extra mile, give the reasons why.)

Of course, many other mistakes can be made in the estate planning process, but these are some of the more common ones. That’s why it’s always important to review your estate plan before and after signing and make updates as things change or as you become aware of new issues to consider.

Avoid these common estate planning mistakes by reviewing your estate plan with an attorney to ensure it’s up to date and covers what matters to you most. Please feel free to contact me with any questions or schedule a review at kaway@kawaylaw.com.

You found a great photo online that would be perfect for your upcoming social media campaign. And you also saw a fantastic article on a lawyer’s website that you could totally repurpose for your newsletter. There is so much interesting and useful content on the Internet, but would using other people’s content in your marketing, be a problem?

Unfortunately, the answer is often yes. Just because it’s on the Internet does not mean it’s not copyright protected. In fact, it’s best to assume that anything created in the last century is copyright-protected, whether it’s on the Internet or not. If you copy a blog article or use an Internet photo without permission, it’s very likely that you’re infringing on a copyright. On top of that, using it in your marketing means that you’re putting it out there for the world to see, which increases the likelihood that the original owner will see it and object to your use. It’s much safer to use something that’s been tagged for commercial re-use or get content from a reputable website that previously got permission from the copyright holder. There may or may not be fees involved, but consider that the price to pay for peace of mind.

In addition to copyright, you need to consider right of privacy and right of publicity. They’re two sides of the same coin – right of privacy is the right to not have your face exploited for commercial gain when you want to stay out of the limelight, and right of publicity is the right to control when and where your face appears in a commercial context. In either case, the person doesn’t want their face to appear in an advertisement or marketing campaign without their permission. Keep this in mind anytime you’re using a photo with a person in it. If you don’t have that person’s permission, and/or you’re not getting it from a site that’s letting you use it with the person’s permission, it’s best to stay away.

Last but not least, if the content contains another company’s branding (e.g., a logo, trademark, slogan or other aspect of the company’s commercial identity), you risk trademark infringement, false advertising, false endorsement, and a host of other trademark-related claims. Essentially, the risk is that the company believes you’re using their branding to confuse or deceive consumers or make them think there’s a connection between their company and yours. In that case, they will likely come after you on whatever legal grounds they can think of. (Exception: if you are comparing your company or product to a competitor’s and making truthful statements about your competitor or their product, then there is very little they can do about it. Just be very careful if you go this route because if you tick them off enough, they may decide to come after you anyway.)

So, to sum up, while you technically can use other people’s content in your marketing, you’re taking a lot of risks if you don’t go through the proper legal channels. The safest route is always to get permission or properly license the content from a legitimate website.

If you have questions about using other people’s content in your marketing or want someone to review your marketing campaign for legal issues, please feel free to email me at kaway@kawaylaw.com.

If you’ve worked with a lawyer to create a trust, you’ve probably heard this term before. “Funding your trust” is a common refrain for estate planning lawyers, mainly because so many clients fail to take this crucial step, creating problems for their poor trustee to deal with after their death.

So what does funding my trust mean?

Simply put, “funding your trust” means making the trust the legal owner of your assets. (Technically, the trustee is the owner and holds the assets “in trust,” but I’m keeping it simple to avoid confusion.) The trust is only in charge of the assets it owns, and everything else is still considered part of the estate and, therefore, not governed by the trust. In order for the trust to be effective, you need to update the title to your assets to make the trust the legal owner.

What happens if I don’t fund my trust?

That depends on how thorough you were when creating your estate plan (or how thorough your lawyer was). If you were thorough, then you either signed an “Assignment to Trust,” declaring all your assets trust assets, or you included a Schedule of Assets at the back of your trust listing everything you consider to be a trust asset (and yes, you can absolutely do both if you want to be an overachiever – that’s a good thing in this instance).

In this case, while it would have been much easier to move the assets into your trust during your life, your hard work still pays off. Your trustee will have to go to court, show the judge the Assignment to Trust and/or Schedule of Assets, and ask for a court order to move the assets into the trust. In most cases, the judge will rubber-stamp the order and move on because that’s much easier than a full probate. Your trustee will have to pay the court fees and experience some delays in getting things done, but at least they avoided the full probate process.

That is not true if you did not leave any evidence behind of what you considered to be a trust asset. If there is no evidence to prove that an asset was supposed to be in the trust, then a full probate is required. The executor of your will (who is usually also the trustee of the trust, because that makes life easier) will oversee the probate process, and at the end of the probate, the assets can all be moved into the trust, and the trust administration can proceed.

Okay, so I should fund my trust. How do I do that?

For real property (i.e., your house and any other land you own), you’ll need to execute a Grant Deed, giving ownership to yourself as trustee of the trust. For most everything else, you’ll need to contact the institution holding the assets, inform them that you want to move your assets into your trust, and they will send you paperwork. Yes, it will be tedious, but if you persevere, then it will be done, and you will have saved your future trustee a lot of hassle down the road. If you used a lawyer for this process, then they can likely help you with the funding process as well. (Just don’t ask them to deal with banks directly; bankers don’t like talking to lawyers anymore than anyone else does.)

If you have questions about funding your trust or would like help with the trust funding process, don’t hesitate to get in touch with me at kaway@kawaylaw.com, and I will be happy to help.

I wrote about the issues surrounding AI and copyright law a few months ago, but as with any new and exciting technology, the landscape is changing rapidly, so I felt an AI and Copyright update is in order.

In my previous article, I discussed whether AI-generated content could be protected by copyright law in the first place. The Copyright Office addressed that question in a recent update to the Federal Register, stating that anything created by a machine cannot be protected by copyright (link: https://www.copyright.gov/ai/ai_policy_guidance.pdf). The Copyright Office has a long-standing policy of only granting copyright protection to works created by humans, so this decision is consistent with their previous rulemaking. (Before machines, there were questions about paintings done by elephants in zoos and a semi-famous “monkey selfie” case in the courts involving a monkey who found a camera in the jungle and, well, took a selfie. PETA brought the case to the courts on behalf of the monkey and lost rather spectacularly.)

The Copyright Office also addressed the question of human authors using AI as a tool in their creative process or creating content in conjunction with AI-generated content. In these cases, the content contributed by the human can be protected by copyright, but the content contributed by the AI program cannot. When registering a work with the Copyright Office, the applicant must identify any part of the work that was AI-generated, and that part of the work will not be protected by copyright. This means that authors wanting to use AI-generated content need to be very thoughtful and strategic in how they do so since that part of the work will not be protected.

The use of copyrighted content in AI databases is still a very contentious issue. Several lawsuits have been filed against various AI software developers over their use of copyrighted content in “training” the AI program. The AI developers, for the most part, are arguing that this falls under the fair use doctrine and therefore, permission is not needed. It’s possible that Congress will issue legislation to resolve this issue, but most likely, a decision will be reached by the courts before then.

While the copyright owners are certainly upset about their content being used without permission (or payment), the bigger issue for them is that many AI programs do not yet have filters to prevent copyrighted material from making it into the content it generates. To be fair, creating such a filter is likely an extremely complex task since the program will have to take into account the copyright status of the content it is using, the final product it is being asked to generate, and whether any fair use principles apply (and even humans struggle with that last one). So while this seems like a simple and straightforward answer, it will likely be some time before it can be successfully executed. And until such a filter is in place, the presence of copyrighted material in AI-generated content is likely the biggest impediment to the software developers’ fair use argument.

Last but not least, the impact of AI-generated content on the market for human labor is still a concern, but it hasn’t received the same headlines as the issues outlined above. Creatives are still encouraged to read their contracts carefully to make sure the content they create is not used to train AI programs to replace them down the road. (It should also be noted that while AI software has proven itself capable of many things, it has yet to prove itself truly creative, so machines will not run Hollywood anytime soon.)

I hope you enjoyed this latest AI and copyright update. If you would like to learn more about copyright and AI and how it could impact you, please email me at kaway@kawaylaw.com.

My process is pretty straightforward when people come to me to create a will and/or trust. I present them with an intake sheet, which asks all the questions I need answered to create their will and trust (yes, it’s a lot of pages). I try to get all the decision-making done upfront, so the rest of the process is just memorializing their wishes on paper. After doing this for several years (I don’t want to depress myself with an exact number), I find there are many things most clients have never considered. With that in mind, here are a few things to consider when creating your own will or trust.

1. Do you want to have a provision for your pets?

This topic is growing in popularity as far as the things you should consider when creating your own will or trust. Now, this consideration isn’t always necessary – sometimes clients have a child or friend they know will take the pets, and everyone else will bless them for it. But sometimes, the client has a specific person in mind, but it’s unlikely that the person will step forward unless they’re named. And sometimes, the client knows that everyone wants the pet, so they want to name a person to ensure there’s no fight about it. Whatever the situation, if there’s a specific person you want to take your pets, you should probably say so in your will or trust.

You may also want to set some money aside for the pet to ensure that the pet is taken care of. The new owner may or may not need it, but it can be helpful while they’re adapting to the new household addition.

2. Do you want your house to be sold?

Most of the time, the house gets sold as part of the estate administration because, in most cases, the beneficiaries want the money more than they want the house. However, in some cases, a client does not want the house to be sold (e.g. their children are too young to decide if they want the house, or they want their child to be able to grow up in the family home). In other cases, one child wants the house, but their siblings want it sold yesterday. Or the client may have multiple properties and want to give specific properties to specific people. If any of these are true for you, you probably want to have a provision that tells everyone what will happen to the family home.

3. What happens if your beneficiaries don’t outlive you?

No one wants to think about this possibility, but unfortunately, it sometimes happens. If you have five children and fifteen grandchildren, you probably don’t need to worry about it, but if you’re giving your entire estate to one or two people, you should probably think of a backup plan if they’re not there to inherit.

If you don’t think of something, the California Probate Code has a backup plan in place. Your estate will go to your closest blood relatives if you don’t have a living beneficiary. For some people, that’s fine and dandy; for others, this is their worst nightmare. If you fall into the latter category, a backup plan is essential.

4. When/how do you want your children (or other young beneficiaries) to inherit?

Minors are not allowed to inherit outright, so their share has to be held in trust until they’re 18. I don’t know about you, but I wouldn’t trust most 18 year olds with an inheritance, so it would be a good idea to set a higher age limit for them (e.g. 25).

It also doesn’t hurt to break up their inheritance into chunks distributed over time. That way, even if they blow through their first distribution, they still have a chance to be smart when the subsequent distribution rolls around.

5. Are any beneficiaries receiving government benefits for a permanent disability?

If you have a special needs child or if a beneficiary became permanently disabled later in life, then an inheritance may be a curse rather than a blessing. These government benefits are needs-based, meaning that if the recipient comes into money, then the government benefits stop. In addition, many disabilities make the person incapable of managing funds responsibly, making it unwise to give them the money outright. You should seriously consider a Special Needs Trust when you have a beneficiary who cannot manage money, and/or who will lose government benefits if they receive an inheritance.

A Special Needs Trust holds the money for the beneficiary and uses it to supplement their government benefits rather than replace them. It’s also possible to have multiple people involved to ensure the beneficiary gets the right level of care for their particular disability. The beneficiary will never have direct access to the funds, but the funds will be used to help and support them. Most Special Needs Trusts also have provisions allowing the trustee to dissolve the trust should the beneficiary become capable of supporting themselves. All in all, it’s an excellent tool when you have a beneficiary on government benefits.

These are just a few of the questions I ask on my intake sheet (like I said, it’s a thorough form). And I would suggest they are at least some of the things you should consider when creating your own will or trust.  If you would like to learn more about these topics, or if you would like to come in for a consultation, you can feel free to email me at kaway@kawaylaw.com.

Last month I told you about the Andy Warhol Foundation for the Visual Arts v. Lynn Goldsmith, the Supreme Court case that is said to be a game changer for fair use. I’ll end the suspense this month and tell you what happened at the Supreme Court in my exciting conclusion, Part 2: Fair Use Revisited.

As I said last month, the fair use test consists of four factors, but courts have been weighing the first factor more and more heavily. Specifically, many cases have been decided based almost exclusively on whether the use is “transformative.” The Supreme Court put the brakes on this trend in this case. While “transformative-ness” is relevant, it is not the deciding factor in the fair use test or even in the first factor of the fair use test. It is one element to be considered among several others. In addition, making some changes to the original is not enough to make something “transformative” – it has to fundamentally change the purpose of the work to apply. So to go back to Google v. Author’s Guild, Google’s use still qualifies as “transformative”, because the purpose of Google’s use (creating an online searchable database) is fundamentally different from the purposes of the original authors (offering a book for sale for educational or entertainment purposes). But here, Andy Warhol’s artistic changes to Lynn Goldsmith’s photograph do not change its purpose as a cover photo for a magazine devoted to Prince. Since the purpose of this use is the same as the purpose for the original photograph, it is not transformative. Combined with this being a commercial use, the Andy Warhol Foundation fails the first factor of the test and loses the case (the parties had already agreed that Ms. Goldsmith would win for the other three factors).

So what does this mean for fair use going forward?

The most obvious answer is that people who are drawing from preexisting content cannot rely on their use being “transformative.” The Supreme Court has significantly raised the bar on what qualifies as “transformative”, and they have further declared that “transformative-ness” cannot be the deciding factor in infringement cases. People using preexisting content must carefully analyze all four factors before they can feel reasonably confident about their use qualifying as fair use. Critics of the decision are concerned that this will inhibit people from using preexisting content, and the creative world will suffer for it. I personally feel that creatives will find a way to adapt, but only time will tell.

I read another article recently that pointed out that this could also spell trouble for AI companies. As I pointed out in my previous article on AI, AI needs a large database in order to work, and that database almost necessarily includes copyrighted content. AI companies have largely been relying on their use being “transformative” – if that is no longer a deciding factor, this could generally spell trouble for the AI industry. On the other hand, they have a stronger argument than the Andy Warhol Foundation did in this case, so this may be more of a setback than an industry killer.

It will certainly be interesting to see what the long-term impact of this case will be. In the meantime, if you have questions about this case or article (Part 2: Fair Use Revisited), and how it affects your work, please feel free to email me at kaway@kawaylaw.com.

What the Andy Warhol Foundation for the Visual Arts v. Lynn Goldsmith Case Means for Fair Use Going Forward – Part 1

It’s been a while since I last wrote on fair use. Since that time, the Supreme Court decided a major case dealing with fair use, Andy Warhol Foundation for the Visual Arts v. Lynn Goldsmith. While the long-term impact of this case is still unknown, it’s expected to shake up the copyright landscape significantly. Let me go through this case and what it means for people using someone else’s content.

For those who aren’t familiar with this case, here’s the background:

In 1981, Lynn Goldsmith was hired to take a bunch of photos of this up and coming artist named Prince. Ms. Goldsmith took said photos, and has been licensing them and profiting off of them ever since. In 1984, Ms. Goldsmith licensed one of her photos to Vanity Fair to use as a reference for an illustration. Vanity Fair then hired Andy Warhol to create the illustration based on Ms. Goldsmith’s photo. It’s important to note that the license only gave permission for the photo, and the resulting illustration, to be used in a specific issue of Vanity Fair.

Fast forward to 2016, when Prince died. A lot of magazines and others in the entertainment news industry wanted to run commemorative articles, magazines etc. on Prince, using photos that had been taken of him over the years, and Conde Nast, the owner of Vanity Fair, was no exception. However, Conde Nast reached out to the Andy Warhol Foundation for the Visual Arts to reuse the illustration from 1984, and discovered that Andy Warhol had created a whole series of illustrations based on Ms. Goldsmith’s photo. Conde Nast then licensed a different illustration of Prince, and used it on the cover of their magazine. This alerted Ms. Goldsmith to the fact that Andy Warhol had made multiple illustrations of her photograph, and she accused the Andy Warhol Foundation of copyright infringement. Both parties then ran to the courts for a verdict, and the case made it all the way up to the Supreme Court.

Before I give away the ending (assuming you haven’t already heard), let’s do a quick refresher on the fair use test. Whenever courts are deciding whether something is fair use, they look at four factors (you can get a more detailed breakdown here – link to June 2018 post):

1. The purpose and character of the use – what is the alleged infringer actually doing with the content?
2. The nature of the copyrighted work – the more creative it is, the more protection it gets
3. The amount used – how much was taken, in terms of quantity and in terms of quality
4. The effect on the market – will the alleged infringer’s use hurt the original’s ability to make money?

The Supreme Court had previously stated that the fourth factor should be given the most weight, but over the years the lower courts have been looking more and more at the first factor. Specifically, they’ve been looking at whether the work is “transformative”, i.e. whether the original work has been altered to the point that the new work serves a different purpose or character. For example, in Google v. Author’s Guild, Google was sued because they were scanning whole libraries and putting the digitized books into a searchable online database. The court ruled this fair use, because a searchable online database is very different from a single book published for educational or entertainment purposes. (It helped that Google was careful to make sure that people couldn’t recreate a book from the snippets it made available, so the market for the scanned books wasn’t harmed.) It’s gotten to the point where some courts will decide an entire case based on whether or not the new work is “transformative.”

Are you thoroughly confused yet? I’ll give you some time to digest this, and we’ll pick this back up next time. Let me know if you have any questions that just can’t wait, otherwise I’ll see you again next month for the exciting conclusion about this fair use decision (that you’ll probably have heard by then, but that’s okay, I’ll still break it down for you).

All right, I’ll admit it – writing an article about why you shouldn’t DIY your estate plan might seem a bit self-serving. But, I have had people ask me what the benefits are of using a lawyer versus one of those online services (or just signing a piece of paper stating what they want). Here’s how I typically respond:

1. Online estate plans are not customized to your circumstances. If you go to a lawyer, they will talk to you about your financial situation, your family situation, your goals with your estate, etc., and they will adapt the language in your estate plan accordingly. Online services just ask you for basic information and spit out a generic will and trust with the names filled in. For some people that’s fine, but for many others there may be special provisions they didn’t know to add, or provisions that are not relevant to their circumstances.
2. Online estate plans are usually poorly drafted. I need to be careful here, because I have occasionally seen an online estate plan that was pretty decent. However, these were the exception, not the rule. Most online estate plans I have reviewed have been clunky, awkward, and difficult for even me to make sense out of. I’ve also noticed problematic provisions that don’t reflect the wishes of the client, as noted above. Estate plans the client put together themselves tend to be even worse.
3. DIY estate plans are more likely to go to court. A litigator once told me that the majority of his cases involved DIY estate plans. Having a lawyer draft the plan (and check the client for capacity and undue influence) greatly reduces the likelihood that people will contest the plan after the client has passed.
4. DIY estate plans are harder to defend in court. Since the person put the plan together themselves, there was no one to check for capacity or undue influence (and there’s a higher risk of fraud as well). If a lawyer put the plan together, they can serve as a witness and can testify to their client’s mental state at the time they signed. This testimony is given a lot of weight by the courts. Without it, the defendant needs to gather evidence of the person’s mental state from whatever sources they can think of. Granted, the court assumes a person has capacity unless the evidence indicates otherwise, but a lawyer’s testimony makes things much easier.

Even though I’m writing about why you shouldn’t DIY your estate plan,  it’s not to say that online estate plans don’t have their place. There are times when a person’s circumstances are very simple, and they don’t need a tailored estate plan. There are also cases where there’s urgency and the person simply doesn’t have the time to get the plan done by a lawyer. But on the whole, I believe that most people would benefit from having their plan drafted by an experienced lawyer. Of course, I’m biased, so give my opinion all the attention it deserves.

If you would like to discuss the benefits of using a lawyer further, or would like to skip that step and sit down for a free consultation, you can email me at kaway@kawaylaw.com.

In my previous article, I talked about estate planning for musicians and the steps they could take to ensure their copyrights stayed profitable. In this article, I’ll be talking about estate planning for authors.

The first thing authors should consider when creating a will and trust is their copyrights. Suppose there is no explicit mention of your copyrights. In that case, it is considered part of the “residue” or “remainder” of the estate, meaning that it will go to whoever you’ve designated to receive the bulk of the estate after the specific distributions are done. It’s certainly possible to leave things like that, but if your copyrights are producing income (or you think they could be in the right hands), then it’s worth considering some other options.

If the person you want to be in charge is also the person you wish to receive the income, then you can simply leave them your copyrights and be done with the matter. But what if the person you want to be in charge of your copyrights is not the person you want to receive the income? For example, perhaps you want your children to receive the income, but none of your children have the time, knowledge, or inclination to manage the copyrights to ensure that the income happens. In that situation, leaving your copyrights in trust might be better, with the children as beneficiaries for any income.

Another possibility when considering estate planning for authors is to create an LLC for your copyrights. Several people have asked me about this option, and it is a viable way to pass on copyrights and/or have one person in charge with someone else receiving income. But several drawbacks should be noted. First, LLCs do not avoid probate unless you include your ownership interest among your trust assets. Second, it will not protect your assets from lawsuits since you will always be personally liable as the book’s author. And third, there is an annual filing fee for LLCs in California, and it’s high enough that I wouldn’t recommend going this route unless your copyrights are producing at least $1000 each year. All that said, it can still be a good option, particularly when a work has multiple authors.

Once you’ve decided which of these methods best suits your circumstances, you can do a few things to ensure everything goes smoothly once you’re no longer at the helm. First, have a portfolio that tracks your books, published and unpublished. Published books should have information on who the publisher is, how well the book sells, when to expect royalty payments, etc. Unpublished books should have some basic notes on the status, so your manager can pick up where you left off. Additionally, it’s helpful to your manager to have contact information for your agent, publisher, lawyer, or anyone else they may need to contact, so they can find out what’s going on with your books and update everyone with the manager’s contact information. Lastly, make sure your manager can find all your contracts and licensing agreements in case they need to reference them in the future. (If you don’t know where they are, make sure to find them or ask the other party for another copy. You can’t enforce your rights if you don’t know what your rights are.)

If you have any questions about estate planning for authors or need help navigating your estate plan in general, please feel free to email me at kaway@kawaylaw.com.

Many people have asked me about AI and copyright law in the past few months. It is a hot topic right now with the introduction of ChatGPT, and there are several possible uses for AI within the entertainment industry. At the same time, AI technology raises a number of issues that the courts and legislatures are still addressing. This article looks at three big issues facing AI technology, which will probably need to be resolved before the technology can truly take off.

The first issue to be addressed is the copyrightability of AI-generated content. The Copyright Office has definitively stated that content must have a human author in order to have a copyright; they will not register anything authored by a machine (or a monkey, as in Naruto v. Slater, a.k.a. the “monkey selfie” case). So anything that is 100% AI generated is in the public domain and free of copyright protection. But what if an author uses AI as part of their creative process? The Copyright Office has suggested that a computer can be used as an aid to a human author. Still, the question remains whether the human author can claim full copyright protection or if the copyright would be limited to his contribution, not the AI-generated part. While this question has not yet been answered, I suspect that the amount each contributed will be an essential factor in the final decision. Another important factor will likely be the amount of creative input the human gave to the AI program; some countries are allowing copyright protection when the directions show sufficient creative input.

The second issue to be addressed is AI using copyrighted content to generate its own content. In order for AI to do what it does, it must have an extensive database of content to reference, and that database does include copyrighted content. Currently, most AI algorithms do not include limitations on using copyrighted content, so it is very easy to instruct AI to create something that incorporates iconic characters or text. While this certainly raises a concern about AI being used for evil, the bigger problem would be people using AI-generated content and not realizing that that content contains copyrighted material. Knowing that AI-generated content might contain copyrighted material could very easily put a damper on people using it. On the flip side, owners of lucrative copyrights are kicking up a fuss over their content being in the database without their permission. Some are suing the owners of the AI content, while others are figuring out how to work with the owners to prevent their content from being incorporated into AI-generated works without permission. At this point, it’s hard to say whether this will be resolved by the courts, the legislature, or by the various parties working it out amongst themselves.

The third issue is how AI will alter employment opportunities for content creators. AI is a faster and cheaper way to create content, which could significantly impact the job market for animators, special effects experts, and writers, to name a few. Content creators must figure out how to compete with this new kid on the block. In addition, Author’s Guild recently put out a press release warning writers that their content could be used for AI training purposes and recommended that future contracts include a clause expressly prohibiting this (https://authorsguild.org/news/model-clause-prohibiting-ai-training/). It’s a good point that paid writers should take to heart – who wants to find out they’ve unknowingly been training their replacement?

Time will tell how these issues, and the others raised by AI, will ultimately be resolved. In the meantime, if you have questions about how AI and copyright law can be used for your benefit or detriment, feel free to contact me at kaway@kawaylaw.com.