Ambush Marketing: the evolution and uncertainties in preparation for Milan Cortina 2026
For events of a certain media importance, usually sports, companies that are used to investing in advertising compete for commercial partnerships with the organiser of the event, bearing considerable investments but also expecting a positive economic and image return.
It is clear that, by virtue of the most basic principles of competition, even companies that have not reached (or simply did not want to reach) any commercial partnership agreements with the organiser, are allowed to advertise their products by alluding to the event (so-called “smart marketing” or “real time marketing”). Such promotional initiatives encounter a limit and become unlawful if the company replaces itself in the public's perception as the sponsor or official licensee, thus damaging not only the company that has invested to secure the partnership but also the event's organisation, which is consequently forced to lower the fees of licences and sponsorships to make them more attractive.
These practices are called “Ambush Marketing”, a topic more relevant than ever given the upcoming Winter Olympics Milan Cortina 2026. As always, when it comes to major sporting events, the States involved in the organisation regulate the trickiest aspects with specific regulations; the Italian Government, for the occasion, issued Law Decree n. 16/2020 (the so-called “Ambush Marketing Decree”), converted into Law n. 31/2020, which has general application and is not limited to the 2026 Olympic Games.
Regarding this business practice, it should first be pointed out that to date there is no precise legal definition of ambush marketing; the expression has Anglo-Saxon origins and was coined for the first time by Jerry Welsh on the occasion of the 1984 Olympic Games in Los Angeles, when the US multinational Kodak decided to sponsor television programmes related to the Olympics, crediting itself to the public as the official sponsor of the event even though it was not, unlike its competitor Fujifilm.
This expression therefore refers to all those situations in which a company attempts to exploit an event that has particular visibility to its own advantage, without, however, being linked to the organisation of the event.
Sometimes the so-called ambusher presents itself as the sponsor or official licensee of the event using signs, symbols, trademarks related to it. In Italy, it was the Court of Venice in 2005 that first recognised this unlawful conduct, prohibiting the famous Venetian company Benetton from using the term “olympic” on its clothing coincidentally introduced in proximity of the Turin 2006 Winter Olympic Games.
However, there are many ways in which ambush marketing takes place, and only rarely do these go so far as to explicitly recall the (usually well-known) distinctive signs associated with the event. More often, ambush marketing occurs in an indirect and veiled manner and is realised through the intensification by a company of advertising investments in conjunction with, or close to, the event, in order to dilute the official sponsorship of the event obtained by the competitor. For example, during the 1996 Olympic Games in Atlanta, instead of paying the approximately 50 million dollars required by the organisation for sponsorship, Nike set up a massive shop close to the sports facilities and covered the stadiums with its advertisements, thus deceptively suggesting that it was one of the official sponsors of the event. Lastly, in the spring of 2022, the AGCM sanctioned Zalando, which was not a sponsor of the UEFA EURO 2020, for having displayed during the event and close to the Football Village a huge billboard bearing the words "Who will be the winner?" and the flags of the participating countries, thus brazenly referring to the event and creating doubt in the public about the existence of a commercial relationship with the organiser UEFA, which in fact did not exist.
Sponsoring an event concurrent to the main event can also be a form of ambush marketing. Again, Nike in 2008 organised, at the same time as the 2008 Summer Olympics in Beijing, the “Nike + Human Race 2008”, a running race held in 25 countries for charity purposes but which had the deceitful intention of promoting the company by parasitically linking to the Olympic Games.
Another form of ambush marketing is carried out through surprise advertising initiatives during or close to the event. In this case, the ambusher's aim is not to make people believe that it has a partnership with the event organiser, but exclusively to make people talk about it. This is the case of Pringles, which during Wimbledon 2009, despite not being a sponsor, distributed packages outside the tournament venue bearing the words 'These Are Not Tennis Balls', playing on the similarity between the tube of chips and the one containing tennis balls and thus achieving a great return of image.
Finally, there is a conduct that at first sight might appear to be ambush marketing but which in reality is lawful and do not infringe others' rights, that occurs when one creates an indirect association with the event, for example by means of advertising campaigns in which well-known personalities who have previously participated in the event appear. Significant here is the case of Lay's, the chips company that on the occasion of the 2014 World Cup recruited footballers Fabio Cannavaro and Lionel Messi as testimonials, despite the fact that the official sponsor of the Italian national football team at the time was the competitor San Carlo. However, neither the Institute of Advertising Self-Discipline nor the Court of Turin decided to sanction the unlawful conduct in this case. Consistently with this decision, the regulations issued for Milan Cortina 2026 expressly exempt in fact conduct carried out in performance of sponsorship contracts concluded with individual athletes, teams or participants in one of the events.
In the light of the case law analysed, one now has to ask how far a company can go in advertising its products during events of great media resonance. The lack of a clear definition of ambush marketing and the vagueness of the criteria identified by the judges make it difficult to date to precisely identify the perimeter within which a company may lawfully move and make ambush advertising predictable and avoidable. Nor does the Ambush Marketing Decree already cited solve this problem.
In conclusion, in order to adequately protect the investments made by companies in the course of such events and avoid unpleasant surprises, it is hoped that the legislator will soon succeed in providing a regulatory definition of ambush marketing and clearly identify the requirements for its configurability.
In any case, to date there has been no ambush marketing to the 2026 Winter Olympics. We will see!
Digital Content Creators in the IP world
In recent years, the online communication and entertainment industry has been profoundly revolutionized thanks to technology and its increasing use, which has created new job opportunities including, for example, the creation of digital contents, capable of generating profits. No one should be surprised, therefore, that an increasing number of young people are trying to make their way in this field in an attempt to realize a unique digital product on the various platforms that is immediately recognisable to the public of web.
These people are called “digital content creators” (a category in which the "influencers" can be included), that we want to analyse in this article, especially in relation to some intellectual property aspects.
The digital contents produced by the content creators are protected by copyright law if the requirement of creativity is met. In this case, any unauthorized reproduction and/or dissemination of such digital contents by third parties is expressly prohibited, unless there is an express consent from the digital content creator, which is usually released in exchange for a monetary compensation.
As a result, first of all, the content creator is the owner of the moral rights of the created content, so only he can be recognized as the author of that content; these rights are inalienable and untransferable. Furthermore, the content creator is also the owner of economic utilization rights of the content, which are transferable, even if only partially.
This is the example of the many advertising contracts signed between companies and content creator/influencer. The latter, according to the advertising contract, agrees to create digital content, such as photos, posts, stories or videos, through which he promotes the products and the services of a particular brand. All this in exchange for a monetary compensation but also, in certain cases, the transfer of the property rights of this content in favour of the company, like the right to use and/or reproduce it for any purpose and in any form without incurring any infringement.
This partnership is not new; in fact, it already existed in the past as celebrity marketing, whereby athletes, actors, singers or celebrities from other sectors used their face and image becoming the brand ambassador of a company, so the representative of that brand. However, in the past, the personalities chosen were already famous for other merits, therefore, the consumer purchased the product and/or the service based on the popularity of these personalities and not on their promotional ability. Totally different is the influencer marketing because often the content creators are not famous, so they are more human and accessible, which is the reason behind the "trust" relationship built with the consumer; moreover, the content creators are chosen precisely for their promotional skills and therefore for their ability to suggest and influence their followers about the choice of a certain product and/or service. Thanks to that ability that the content creator can become a real celebrity.
In light of these considerations, the image of the content creator/influencer in the communication and entertainment industry is central and therefore it deserves to be protected and safeguarded.
In fact, the image is an absolute right of a person that cannot be damaged in any way, so its disclosures and/or reproductions without the consent of the person involved are generally prohibited. The rule does not apply for famous and notorious people because in these cases the consent is not necessary, except if the reproduction and/or disclosure of the image would result in prejudice to the reputation or decorum of the person in question. However, it is not always easy to understand when the use of the image is justified by the celebrity of the person or when it instead constitutes a damage to the person's reputation.
This last aspect shows how it is not always easy to protect the image of famous people, such as precisely the content creators, which is the reason that they often adopt alternative remedies to protect their image. One of these is to register their name as a trademark to prevent third parties to improperly use their popularity by taking financial advantage, or, by damaging their reputation.
As further confirmation of the above, also recent case law has denied to famous people the right to protect their image as an intellectual work, de facto depriving them of an additional defence instrument.
This is the consequence of the judgment no. 219/2/2023 of the Second Instance Tax Court of Piemonte, issued against the football player Cristiano Ronaldo, who, in addition to being known as an athlete and as one of the highest-paid players in the world, he has also utilized his popularity, image, and initials (CR7) over the years to generate new economic income, in order to be part of the celebrity/influencer marketing.
The player, who at the time was playing for the Italian soccer club Juventus, had applied for a preferential tax regime under Article 24-bis of the Italian Income Tax Act (TUIR). The aim of that legislation was to encourage foreign citizens, especially the wealthiest, to transfer their residence in our territory and for this purpose had provided for a fixed flat-rate regime for all new-residents, but only in relation to their foreign source income.
Cristiano Ronaldo had requested access to the preferential tax regime provided by the TUIR since believed that the profits originated with the use of his image, so with the celebrity/ influencer marketing, were separate from the football activity carried out, at that time, in Italy. Tax Court of Piemonte denied the application of Article 24-bis TUIR to CR7.
According to the Court, in fact, the image of any person should be protected only as personal quality, it is not the product of an autonomous work, because notoriety could originate, as we have already said, by an artistic or professional activity or ability, or even by the simple skill to promote the own image on social networks and other digital platforms. So, the image is connected to the person and cannot be separated from his life and work. Therefore, the profits deriving from the use of the image of Cristiano Ronaldo could not be separated from his sporting activity, being directly and intrinsically connected.
Beyond the tax implications of this decision, this ruling has generated important consequences for the whole celebrity/influencer marketing industry. In fact, as we have already said, influencers are the most exposed to the violation and injury of their image right. For this reason, in the absence of specific legislation, over the years, they have tried to find escamotages and use other instruments of protection, often referring to copyright and the industrial property code. However, denying the qualification of intellectual work to the image right, the Tax Court of Piemonte has deprived the content creators of a new instrument of protection, generating a legislative gap in the entertainment and communication sector.
In fact, the image of the more and more influencers consists in a real working tool that, if damaged, could cause not only moral but also economic damage, obstructing or making difficult their work.
Therefore, if the regulation of copyright cannot be extended to effectively protect the image of the content creators, we wonder if the legislator will intervene to introduce new and more specific defence instruments in favour of all individuals involved in celebrity and influencer marketing.
Regulation and risks related to the use of Artificial Intelligence Systems
As known, on 21 April 2021 the European Commission finalised a proposal for a regulation (hereinafter for convenience “Regulation”) in order to introduce a system of harmonised rules for the development, placing and use of artificial intelligence “AI” systems within the European Union. At that time, a “grace period” was introduced, that is a two-year period in which all operators of the field would have had time to comply with the Regulation, as well as to make decisions based on the rules contained therein.
In light of the proliferation of AI systems, it is legitimate to ask whether during the aforementioned grace period they have actually complied with the rules of the mentioned Regulation.
To answer this question, it is first necessary to list below the artificial intelligence systems specifically prohibited by the Regulation:
- those that use subliminal techniques capable of distorting the behaviour of a subject;
- those that exploit the vulnerability of a specific group of people;
- those that allow public authorities to create a classification of persons based on a social score;
- those using real-time biometric identification systems, except in cases provided for by law.
In addition to the above, the European Commission has also identified three types of risk in relation to the type of artificial intelligence system in use, which are shown below:
- “unacceptable risk” if the AI system is to be considered a threat to security, means of support and individual rights; such a system is to be considered prohibited under the Regulation;
- “high risk” if AI systems are used in areas where fundamental human rights are affected; such a system can be used and implemented only by adopting a number of precautions which will be discussed below;
- “low risk” if AI systems involve risks that are considered minor, such as in the field of video games, where only transparency obligations are imposed.
On the basis of these due premises, let us try to analyse a concrete case of artificial intelligence - namely, the autonomous driving system of the well-known car manufacturer “Tesla” in relation to which the Firm has already published an article - in order to understand whether or not it complies with the Regulation and, more importantly, what kind of risk would result from its use.
It is reasonable to consider as high the risk such AI system could bring to the public, and proof of this is the more than 700 accidents caused by it outside the European Union, with damages caused both to people and third-party vehicles.
It is also reasonable to state that an autonomous driving system such as the one in question should require a double regulation, namely both the rules of the aforementioned Regulation in relation to the use/implementation of the artificial intelligence system, and new and specific traffic regulations imposed by the circulation of driverless vehicles that communicate with each other through signals and sounds not comprehensible to humans (it appears that the latter regulation is already well advanced in France, Germany and the United States).
Now, it seems reasonable to place this so-called “self-driving car” AI system within the second type of risk, i.e. the one deemed “high”; according to the Regulation, this type of risk imposes on the manufacturer of such artificial intelligence system (“Tesla”) to carry out a preliminary conformity assessment of the system as well as to provide a detailed analysis of the relative risks, all by means of a series of tests that must prove the total absence of errors of such systems. In addition, Article 10 of the Regulation lays down a further obligation for the company using the AI system concerning the proper storage and governance of the data of the users processed by the systems in question.
Thus, the Regulation provides a number of rather strict requirements and obligations that, in the writer’s opinion, are unlikely to be met by the artificial intelligence systems now in circulation and, in fact, there has been lot of criticism from those who would like to see the introduction of less stringent criteria so as to facilitate greater use of artificial intelligence systems.
Another concrete example of artificial intelligence, which we have already discussed in last month's article, is ChatGPT which in Italy was blocked by Italian Authority for Privacy for non-compliance with the European regulations on personal data.
Precisely ChatGPT shows how it is quite complex to frame and classify different AI devices although applying the criteria and principles set out in the Regulation. In fact, at a first and superficial analysis, ChatGPT could fall within the AI systems with a lower risk (third level) as it does not seem to involve fundamental rights.
However, one has to wonder whether this also applies if one were to ask the ChatGPT application to track and disclose a person's data or to prepare an essay or even to rework a copyrighted work.
The answer to this question can only be negative, since such use would risk violating not only the fundamental rights related to the protection of personal data of each individual but also those belonging to the authors of copyrighted works. All this forces us to classify ChatGPT in the category of "high risk" AI systems.
In this respect, it should also be pointed out that the Regulation provides strict controls in relation to “high-risk” AI systems, as well as the application of administrative penalties of up to EUR 30 million or 6% of the turnover of the company concerned. It is however unclear, or at least has not yet been identified, the body responsible for monitoring compliance with the Regulation.
In conclusion and based on the considerations spent above, the writer believes it is advisable for the principles and criteria for the classification of the various artificial intelligence systems to be better defined when the regulation is definitely approved, given that they are currently too generic and often insufficient to correctly classify more complex AI systems (such as “ChatGPT”).
It is also desirable that an independent and impartial authority will be created and set up for each Member State, which can carry out the function of monitoring and verifying the correct application of the regulation's provisions in order to better protect the fundamental rights of individuals.
GPT Chat and Copyright: implications and risks
Lately, there has been a lot of discussion about Chat GPT, acronym for Chat Generative Pre-trained Transformer, a particular chatbot developed by OpenAI which is a research company engaged in the development and evolution of artificial intelligence.
Chat GPT has been presented to the users as a “friendly Ai or Fai”, therefore as an intelligence capable of contributing to the benefit of humanity. Nevertheless, its use has triggered lot of concerns and criticisms, with major implications especially in relation to intellectual property’s aspects.
In fact, thanks to its advanced machine learning technology, called Deep Learning, Chat GPT is able to generate a new text autonomously, imitating human language. Thus, it can be used not only to briefly answer questions, but also for automatic text writing.
Specifically, Chat GPT is able to create texts from scratch upon user's request, but also to process summaries or documents from existing works and thus owned by others.
However, the current absence of a specific regulation on its use risks to seriously jeopardizing the copyright of the contents “created” by Chat GPT: on one hand significantly increasing cases of copying and plagiarism and, on the other hand, making more complex for the copyright holder to defend its rights.
To fully understand the issue just above represented, we must first consider that, according to copyright law, the idea cannot be protected as such, but only its form of expression (thus, in the case of Chat GPT, the text created).
It must also be considered that once the authorship of the writing or work has been recognized, any improper use of it is forbidden, including copying in its entirety, paraphrasing and sometimes reworking it, when the differences appear to be of minor relevance. In essence, plagiarism exists in case of partial reproduction of the protected work and, based on recent case law of the Supreme Court, also in the case of “developmental plagiarism”, for example when the new work cannot simply be considered inspired by the original work because the differences, merely formal, make it an abusive and unauthorized reworking of the latter.
It is also useful to point out that, according to consistent case law, in order for copyright infringement to be established, the elements considered essential of the original work must not be reproduced and therefore they must not coincide with those of the work that has been transposed.
Although there is no specific regulation on the point, it is reasonable to state that these principles also apply to the texts generated by Chat GPT, because its use or the use of any other form of artificial intelligence cannot derogate the rules of copyright law. Consequently, the users must be very careful to ask to Chat GPT to summarize or paraphrase another's text because, if these are spread without the author’s permission, the latter might demand payment of reproduction rights in addition to compensation for any damage caused. To this extent, once can wonder whether the artificial intelligence’s system itself should refuse such a request if it precisely infringes other’s rights.
Another hypothesis that might arise must then be considered, and that is if the text prepared from scratch by Chat GPT is worthy of protection under copyright law. In this case, the question to be asked is whether copyright can be recognized in favor of Chat GPT.
To answer this question, we must first consider that, according to the Italian law, artificial intelligence systems are devoid of legal personality, therefore they cannot hold any rights, including copyright. This also seems to be confirmed by the copyright law which doesn’t mention Chat GPT nor any other form of artificial intelligence in listing the subjects to which it may be applied. And it could not be otherwise since it is a law issued in 1941.
Consequently, for a Chat GPT work to be deemed worthy of protection under the copyright law, there must necessarily be a creative contribution by a natural person, which, however, seems to be lacking at present.
In conclusion, the absence of ad hoc legislation regulating the use of Chat GPT exposes to serious risks of infringement of others' works and thus jeopardizes authors’ rights. This is also because it does not appear that Chat GPT has at present adopted suitable verification and control systems to prevent infringement of other’s rights.
Given the increasing use of this new technology and the doubts just discussed, the writer hopes that the legislature will regulate this phenomenon as soon as possible so as to clearly define its scope and any possible rights (rights which do not seem to be able to be recognized in favor of Chat GPT).
It is also hoped that Chat GPT will soon be able to implement effective monitoring and reporting systems for the protection of intellectual property rights, which will likely need the help and assistance of the rights holders themselves (similar to the Amazon platform), but which could concretely safeguard others’ creative works.
The European unitary patent: what possible advantages and disadvantages?
Until now, at the European level, patents have been governed by the Munich Convention, which provides for a single, centralized procedure for granting patents entrusted to the European Patent Office (EPO).
While the procedure is uniform in terms of the granting of the patent, the same cannot be said for its protection; the European patent granted must in fact be validated in each State party to the Convention in which protection is sought. It is commonly said that the European patent corresponds to a “bundle” of national patents: in essence, following the grant, the European patent confers on the holder the same rights as would be conferred by a national patent, and all questions concerning the validity and infringement of the patent are referred to the national courts.
This situation is about to change.
European unitary patent
As we all know, the Agreement on the Unified Patent Court will enter into force on 1 June 2023 and at that point the European unitary patent will be effective, which will confer uniform protection in all European states that have chosen to adhere to this new system.
It should be made clear that the European unitary patent will not replace the “traditional” European patent, on the contrary, it will stand alongside the latter by allowing the patent holder to choose which system to join.
As it happens with the “traditional” European patent, the EPO will still be the competent office to grant unitary patent rights; furthermore, the new system has not changed the way the patent is granted. Quite simply, at the end of the grant procedure of the European patent, the patent proprietor will have the option to request unitary effect within one month and will have to do so in the language of the proceedings.
Currently, twenty-five European states have chosen to participate in this system (the big missing country is Spain); only seventeen, however, have ratified the Agreement.
This means that when the system comes into force, uniform protection will only extend to the seventeen ratifying states. The question to be asked is therefore: what will happen next? When other states ratify the Agreement, will the uniform protection automatically extend to them?
Surprising as it may be, the answer is no.
In fact, over time several “generations” of unitary patents will be created with different territorial coverage depending on the number of states ratifying the Agreement. At least in the first instance, therefore, there will not be a truly unitary patent in all the states participating in the system.
Given that this is an alternative system, how can one choose not to join it?
It is already possible to do so. As of 1 March 2023, in fact, the so-called sunrise period began, i.e. a three-month period during which the holders of European patents already granted, holders of European patent applications and holders of supplementary protection certificates granted for a product protected by a European patent may request the exclusion of these from the system and consequently remove them from the jurisdiction of the Unified Patent Court (this is referred to as an opt-out, as provided for in Article 83 of the Agreement). The opt-out can also be exercised during the transitional period (seven years). However, it is a good idea to make this choice during these three months because, if you are involved in a court action before the Unified Court after 1 June, the opt-out will no longer be permitted. If one chooses to opt-out, is one forever excluded from the system? No, it is possible to change your mind and choose to opt-in, but this choice cannot be revoked again.
What concrete advantages will the new system bring?
There are many advantages. First of all, uniform protection will be available in all states that have ratified the Agreement and the EPO will be the only office to which applications will be submitted (not only that, but the EPO will also centrally manage the post-registration phases). In addition, holders of unitary patents will pay a single annual maintenance fee and costs related to the validation phase of the patent will obviously not be paid anymore. In addition, disputes that arise in connection with the unitary patent will be subject to the exclusive jurisdiction of the Unified Patent Court, whose decisions will have effect in all states affected by the unitary effect (this will make it easier for the patent holder to stop ongoing infringement activities in all affected states).
However, the European unitary patent also seems to have certain limitations. First, it has potentially less territorial coverage than the European patent. The new system only involves those EU states that have ratified the Agreement (unlike the EPC, which also includes non-EU states such as, for example, Switzerland and Turkey). It should be added that the new system is, in certain cases, a double-edged sword. On the one hand, uniform application of the law is provided for, but on the other hand, the patent holder may be exposed to a higher risk: if the Unified Patent Court judges a patent invalid, it would be invalid in all states affected by the unitary effect.
So, is it worth joining the new system or not?
There is no straightforward answer to it. It seems compulsory to make an assessment that takes into account the peculiarities of each individual case. For example, the patent at issue and its “strength” must first be considered. But also the procedural position one takes in a possible court action; in fact, as a plaintiff, it might be useful to obtain a single decision for all the territories adhering to the patent system with unitary effects (with obvious savings in time and costs), while as a defendant, on the other hand, it might be useful to defend oneself in different states, and therefore before different judges, thus gaining time, and avoiding that an unfavorable decision would have effect on all the territories of the UPC at the same time, thus preventing the sale of the product considered to be infringing in the 17 countries adhering to the Agreement.
It should also not be forgotten that the system is new and right holders will be “exposed” to it. The tightness and efficiency of the rules will really be put to the test once the system comes into force. Likewise, the case law of the new Court is obviously not known. It has also been pointed out by several parties that the unitary patent provides less flexibility; it will not, for example, be possible to carry out the so-called selective abandonment, which is instead feasible for the “traditional” European patent (the unitary patent will have to be maintained or abandoned in all countries). It will also not be possible to transfer the patent only in certain states.
Conclusions
In conclusion, the unitary patent presents some advantages on the one hand, but also disadvantages on the other, which must be carefully weighed up according to the specific case. In the case of the opt-out, this is the right time to start making initial assessments. For everything else, one will have to wait for the entry into force of this new system to understand its actual scope and operational efficiency.
The “Magic Avatar” and the world of artificial intelligence: lights and shadows of a trend that “revolutionizes" privacy and copyright
On December 7, 2022, “Lensa” has turned out to be the most popular iPhone app on the Apple store. The reason? Although “Lensa” has been on the market since 2018, last November it launched a new feature called “Magic Avatar”: taking advantage of artificial intelligence, this feature allows users – upon payment of a fee - to transform their selfies into virtual avatars.
At first glance, once does not catch the problem arising from an avatar who shows the face (clearly enhanced) of the subject of the selfie; however, upon closer analysis, there are several legal issues connected to the use of this “Lensa”’s feature.
Indeed, the application thereof works thanks to artificial intelligence and on the basis of a huge amount of data (so-called “datasets”) which are stored and used to improve the performance of the application itself. In most of the cases, these datasets are nothing more than images collected randomly on the web in relation to which obviously there is no real control on the existence of any rights. This is the first problem: the diffusion and collection of illustrations without the consent of the artists who previously created them turn out to be a copyright’s infringement. Authors are not recognized of any contribution or prize for their works – which, instead, should be guaranteed to them pursuant to the Copyright Italian Law (l. 633/1941 and subsequent amendments) – and they also find themselves competing with artificial systems which are able to “emulate” their style in few minutes.
The problem does not concern the avatar generated by “Lensa” application, but the huge number of images extrapolated from the web, used by the system to trains itself and from which it must “learn” to then reproduce the avatar. The consequences of such a trend should not be underestimated since it is fair to wonder whether one day the artificial intelligences might completely replace human activity. Such undesirable scenario is not so unlikely if we consider that the treatment of visual works created by the use of artificial intelligence’ systems is currently being studied by the US Copyright Office.
In order to (partially) face this issue, the website “Have I Been Trained” has been created to help content creators carry out research aimed at understanding whether the datasets used by artificial intelligences unlawfully reproduce their creations.
There is also a second and more worrying aspect concerning the processing of personal data by “Lensa”. Upon payment of a very low amount to generate the avatar, people provide the application with personal data and information that may also be used for purposes completely different from the creation of “filtered images” and that have therefore a significant economic value. This is one of the main complaints made against this app, namely that, once installed, “Lensa” collects more data that those necessary for its operation, transferring them to servers located in the USA (where the company’s registered office is located). That’s enough to state that the data processing does not comply with the GDPR.
Indeed, Lensa app’s privacy policy states that users’ biometric data (defined under Art. 4 par. 14 of GDPR as “those personal data resulting from specific technical processing relating to the physical, physiological or behavioural characteristics of a natural person, which allow or confirm the unique identification of that natural person, such as facial images or dactyloscopic data”) would be delated from the servers once the app has used them to generate the Magic Avatar.
The point is that – as often happens – “Lensa”’s privacy policy is long and complex, namely it adopts legal terms difficult to be understood by the users; for example, we read that “Lensa” does not use “facial data” for reasons other than the application of filters, unless the user gives consent to use the photos and videos for a different purpose. This might seem comforting but, on a deeper analysis of the terms and conditions, it turns out that “Lensa” reserves far broader powers – of distribution, use, reproduction, creation – over the work raised from user content, subject to an additional “explicit consent” required by the applicable law (i.e., the various national laws).
But where does such “explicit consent” come from? Easy: by sharing the avatar on the public or tagging “Lensa” on social networks, even via hashtag, the user gives consent to use that content and thus authorizes the company to reproduce, distribute and modify it. This licence – which ends with the deletion of the account – is justified in Lensa’s privacy policy on the basis of the so-called “legitimate interest” (i.e. “it is our legitimate interest to make analytics of our audience as it helps us understand our business metrics and improve our products”).
However, this statement raises some concerns, especially in the light of the decision issued by the Italian Privacy Guarantor concerning the social media “Clubhouse”, according to which company’s “legitimate interest” is not the proper legal basis for processing such data and therefore it is not correct either for carrying out data analysis or for the systems “training” process.
In the end, artificial intelligence undoubtedly represents an epoch-making technological evolution, but its use may imply the risk of un unlawful compression of users’ rights; indeed, a European Regulation on artificial intelligence aimed at defining the scope and conditions of its use has been under consideration for some time.
In this respect, hopefully “Lensa” application will take steps as soon as possible to protect the illustration creator’s rights through the recognition of a proper remuneration to them, and so that the user data will be collected and processed correctly, in accordance with applicable privacy’s laws.
Intellectual Property on Memes
Who among us has never received an image or photograph of a character (even a well-known one), accompanied by a caption capable of making us laugh?
Well, these elements are commonly referred to as “Memes”[1] and have the capacity to spread rapidly by mass communication media.
Beyond the communicative capacity of such Memes, one might wonder whether they receive any form of legal protection or if they are in the public domain and therefore freely usable by web users. To answer this question, it is first appropriate to understand the legal framework of Memes.
As mentioned, the Meme is nothing more than an ironic re-elaboration of an original work (usually photographic) already protected by copyright. It follows therefore that Meme - if has the degree of creativity required by copyright law - can be considered a derivative work (pursuant to Article 4 of Law no. 633 of 22 April 1941[2]), i.e. a work created on the basis of a pre-existing work.
This means that the owner of the rights on the main work - hence on the photograph or image created - will have the right to rework it and create derivative works, including Memes, and exploit them for commercial purposes.
Moreover, on the basis of the above considerations, anyone who intends to create and/or commercially exploit Memes will have to previously obtain the owner's permission of the original work, thus requesting a licence against payment of a fee.
But then one has to wonder why such Memes circulate on the web and/or via Whatsapp freely and without any licence?
As far as the European Union is concerned, the answer to this question is to be found in European Directive No. 2019/790 on Copyright in the Digital Single Market, which aims to harmonise the EU copyright framework in the field of digital technologies and in particular the Internet.
In particular, Article 17, VII paragraph, of that Directive states as follows: "Member States shall ensure that users in each Member State are able to rely on any of the following existing exceptions or limitations when uploading and making available content generated by users on online content-sharing services:
- quotation, criticism, review;
- use for the purpose of caricature, parody or pastiche”
It is therefore expressly provided that Member States may use and apply - within certain limits - exceptions allowing free use of copyright protected content via the Internet.
The ratio of the mentioned article is evidently to grant a discrete freedom for web users to share digital content, also protected by copyright, with the sole condition that such use must not even indirectly have an intent / purpose of profit, but only a satirical purpose.
In Italy, the right of satire, although not expressly provided by law, has found widespread application in case law over time[3]. The Meme can, therefore, be considered as an expression of right of satire, which, however, must be exercised within a well-defined perimeter, i.e. in the total absence of profit-making purposes.
This is because the owner of the rights over the Meme holds all the rights of economic exploitation over the work itself and, consequently, can prevent anyone from making a profit from their use. Indeed, there have been several legal actions commenced by Meme’s rights holders, especially in the United States[4].
In conclusion, due to the extremely quick digital evolution and the Internet world we are now witnessing, the outlined intervention of the European legislator can only be welcomed, which aimed at facilitating the exchange of content between Internet users and safeguarding their freedom of expression.
This European directive seems to have managed for the time being in properly balancing the freedom of expression of web users and the protection of copyright. We hope, in this regard, that the national legislator will follow this direction.
[1] “Digital memes are viral content that can monopolise the attention of users on the web. A video, a drawing, a photo becomes a meme when its "replicability", which depends on its ability to arouse an emotion, is maximised.” This is the definition of “Meme” provided by “Treccani” Dictionary.
[2] "Without prejudice to the existing rights on the original work, the elaborations of a creative character of the work itself, such as translations into another language, transformations from one into another literary or artistic form, modifications and additions constituting a substantial remake of the original work, adaptations, reductions, compendia, variations not constituting an original work, are also protected."
[3] Supreme Court no. 23144/2013: [...] satire constitutes a corrosive and often merciless modality of the right to criticism and can also be realised by means of the artistic image, as in the case of cartoons or caricatures, consisting in the conscious and accentuated alteration of the somatic, moral and behavioural features of the persons depicted. It differs from the chronicle in being removed from the parameter of truth in that it expresses, by means of paradox and surreal metaphor, an ironic judgement on a fact, remaining subject to the limit of continence and functionality of the expressions or images with respect to the purpose pursued. In the formulation of the critical judgment, expressions of any kind may therefore be used, even those damaging to the reputation of others, provided that they are instrumentally linked to the manifestation of a reasoned dissent from the opinion or conduct targeted and do not result in a gratuitous and destructive attack on the honor and reputation of the person concerned."
[4] Recalled in this regard is the case of Pepe the Frog, a cartoon character created by cartoonist Matt Furie. The author sued the website Infowars and its owner in 2014 for having used the image for the purpose of creating memes with a sexist, xenophobic and even racist background. Furie was awarded $15,000 in compensation in 2019.
Artificial intelligence travels fast and with autopilot
Self-driving, profiling, social scoring, bias, chatbot and biometric identification are just some of the many terms entered in our daily life. They all refer to artificial intelligence (“AI”), which is the machine’s ability to show human-like skills such as reasoning, learning, planning and creativity[1]. Today like never before, AI has an enormous impact on persons and their security. It is sufficient to mention the Australian case that involved the driver of a Tesla “Model 3” who hit a 26-year-old nurse[2], while the vehicle was on autopilot.
With reference to this tragic accident, one naturally wonders who should be held liable for the critical conditions of the poor nurse. Is it the driver, despite the fact she was not technically driving the vehicle at the moment of the accident? Is it the manufacturer of the vehicle that hit the nurse? Or, again, the producer/developer of the software that provides to the vehicle the information on how to behave when it detects a human being on its way?
As of now, the driver – although she was released on bail – has been accused of causing a car accident. That doesn’t change the fact that – if the charge will be confirmed after the pending judgement – the driver will have the subsequent right to claim damages on the producer/developer of the AI system.
The above-mentioned case deserves an in-depth analysis, especially regarding the European AI industry.
It is worth mentioning that, despite the gradual rise of the AI use in the widest scope of our daily life[3], to date there is no law, regulation or directive related to the civil liability on the use of AI systems.
At an EU level, the Commission seems to have been the first that seriously dealt with the issue of civil liability by highlighting gaps regarding this subject, and publishing, among other things, a Regulation proposal establishing harmonized rules of AI systems[4].
By analogy, it is possible to retrieve from the above proposal three different definitions of civil liability: liability from faulty product, developer’s liability and vicarious liability.
Liability from faulty product applies in the case under exam, which considers the machine to lack legal personality[5].
Hence, as is evident, in the event an AI system causes damage to a third party, the liability will be on its producer/developer and not, on the contrary, on the device/system that incorporates it.
Returning to the case in question, it would therefore be up to the developer of the AI system (i.e. the US company Tesla) to compensate the injured nurse, if the latter is able to prove the connection between the damage/injuries caused and the fault of the AI system. For its part, the developer of the AI system could exclude the damage only if it is able to prove the so-called “development risk”, i.e. providing proof that the defect found was totally unpredictable based on the circumstances and manner in which the accident occurred.
Some commentators have observed on the point that the manufacturer should be able to control the AI system remotely and predict, thanks to the algorithms, unscheduled conduct at the time of its commercialization[6]. Moreover, as we already know, the algorithms incorporated in the AI systems installed in cars can collect data over time, self-learn and study particular behaviors and/or movements of human beings, increasingly reducing the risk of accidents.
From this point of view, the manufacturer would therefore have an even more stringent burden to exclude any hypothesis of liability, that is, to demonstrate that it has adopted all the appropriate safety measures to avoid the damage.
In this regard, the European Parliament has also drafted the “Resolution containing recommendations to the Commission on a civil liability regime for artificial intelligence” which introduces the category of the so-called “High-risk AI”, i.e. those artificial intelligence systems operating in particular social contexts such as, for example, education, or those technologies that collect sensitive data (as in the case of biometric recognition), or that are used in the selection of personnel (which would risk falling back into social scoring or other discriminatory acts) or, again, the technologies used in the field of security and justice (through which there would be the risk of biases: prejudices of the machine on the subject being judged). It has been observed that for such “high-risk AI” systems there is an objective liability of the producer in case of a harmful event unless the latter is able to demonstrate the existence of force majeure event.
In conclusion, despite the efforts made by the Commission and then by the European Parliament with regard to the regulation of AI systems, there are still a lot of questions to be answered regarding the profiles of liability connected to them.
For example, it would be useful to understand how AI systems that are not considered to be “high risk”, such as the self-driving systems discussed in this article, should be framed and regulated. Or again, what threshold of liability to apply if in the not-too-distant future an AI device may be considered fully comparable, in terms of reasoning capabilities, to a human being (as recently claimed by a Google employee on the search engine AI system[7]).
What is sure is that, as often happens with any technological innovation, only a significant integration and adoption in our society of artificial intelligence systems will outline concrete hypotheses of liability, as applicable in contexts of daily operations.
In any case, we have high hopes that the aforementioned Regulation - whose date of entry into force is not yet known - will be able to provide a discipline that is as complete as possible and that above all reduces the risks and responsibilities of the users of AI systems and increases, on the other hand, the burdens borne by the manufacturers of the same to guarantee their safety.
[1] https://www.europarl.europa.eu/news/it/headlines/society/20200827STO85804/che-cos-e-l-intelligenza-artificiale-e-come-viene-usata
[2] https://www.drive.com.au/news/melbourne-hit-and-run-blamed-on-tesla-autopilot-could-set-legal-precedent-for-new-tech/
[3] Considerando (2), Proposta di Regolamento del Parlamento europeo e del Consiglio che stabilisce regole armonizzate sull'intelligenza artificiale (legge sull'intelligenza artificiale) e modifica alcuni atti legislativi dell'unione, 2021/0106, del 21 aprile, 2021
[4] Proposta di Regolamento del Parlamento europeo e del Consiglio che stabilisce regole armonizzate sull'intelligenza artificiale (legge sull'intelligenza artificiale) e modifica alcuni atti legislativi dell'unione, 2021/0106, del 21 aprile, 2021
[5] Barbara Barbarino, Intelligenza artificiale e responsabilità civile. Tocca all’Ue, Formiche.net, 15/05/2022
[6] Ut supra fn 5
[7] https://www.theguardian.com/technology/2022/jun/12/google-engineer-ai-bot-sentient-blake-lemoine
Smart contracts
We often hear about “smart contracts”, but it is not always clear how useful they are or where they can be applied.
Let's start by saying that, in essence, a smart contract is nothing more than a computerised transaction protocol that executes the terms and conditions of a contract. The purpose of such tools is to automate and simplify certain processes.
Consider, for example, the case of insurance policies for flight delays; normally, when the insured event occurs (i.e. the delay), the insured must get in contact with the insurance company in order to receive, at the end of the investigation and unless there are objections, the compensation foreseen with a time frame that can be quite long.
The purpose of a smart contract in this case is to automate the process of claiming damages and paying compensation. Specifically, the insured and the insurance company negotiate the terms of the contract (e.g. the severity of the delay, the amount of compensation, etc.), and then translate the negotiated clauses into computer instructions (algorithms), which are “triggered” automatically when the event occurs. To make it simple, the compensation will be automatically paid into the insured's bank account as soon as the information on the plane's delay is recorded by the smart contract.
However, for the smart contract to achieve the desired automatic effect, the occurrence of the contractual event, i.e. the delay of the aircraft, must be notified to the smart contract. Without this fundamental step, the clauses could not be activated and would remain just a line of code on an isolated device. For this specific reason, the reliability of the source of information to which the execution of the clauses is linked is a crucial aspect in the negotiation phase between the parties, since once it has been selected, its reliability and impartiality cannot be challenged in the course of the relationship.
Once the negotiation phase has been completed, the next issue is the accuracy of the implementation of the smart contract and its accountability. For some time, in fact, the large-scale spread of these instruments has been hampered by the lack of a third-party intermediary who would certify the effective compliance of the lines of code - whose writing must necessarily be entrusted to a technician - with the will of the parties, as well as the inalterability of the instructions over time and their ready verifiability by all interested parties. This function, which in traditional contracts is carried out by professionals such as lawyers and notaries, who guarantee with their work the official nature of what was agreed and the protection of the interests of their clients, is in fact unknown to the world of algorithms.
This, however, has changed with the advent of the blockchain. The latter is in fact a register of information grouped in 'blocks' that are almost impossible to alter and are potentially accessible to any party interested in verifying their content.
By inserting the smart contract into a blockchain through the payment of a cryptocurrency “commission”, a twofold result can be achieved: the verifiability of the information entered (which is thus removed from the exclusive sphere of control of the programmer) and the certainty of this information, which cannot be altered or manipulated without the knowledge of either party. In essence, the blockchain performs the function of a digital notary, archiving and formalising the will of the parties when the contract is concluded. Subsequently, upon the occurrence of the event referred to therein, the so-called “oracles” - blocks that serve to transmit information from the world to the blockchain - communicate it to the registered contract, which will execute the instructions for which it was programmed.
In addition to the insurance field, other areas in which these instruments can be applied are M&A - for example, the possibility of obtaining immediate credit of sums in an escrow account upon the occurrence of the event referred to in the deed of acquisition - and the financial field, where the degree of digitalisation is already very high and where relevant information is already exchanged through computer applications that have an immediate effect on the value of stocks. By way of example, the occurrence of a war event in a given country almost simultaneously causes a collapse in the value of the relative government bonds, just as the statements of central bank presidents are immediately recorded by the financial system, raising or depressing the trend of the international stock exchange over the course of a single day.
From the above examples, it is clear that smart contracts are undoubtedly useful in certain areas, although it is still too early to say that they are destined to replace “traditional” contracts.
This is because not all clauses of a contract can be applied and interpreted through automatisms (e.g. clauses referring to uses and practice), nor all contracts provide for obligations that can be performed by a computer. It is sufficient to think about the clauses providing that the renewal of the contract is subject to the successful completion of a trial period - necessarily linked also to evaluations of personal nature that cannot always be codified ex ante - or to events of force majeure that by their nature cannot be regulated ab origine.
To this must be added that it is still not clear how a smart contract that contains errors or no longer corresponds exactly to the will of the parties can be modified, especially from the moment of its registration on the blockchain. The paradox in such cases would be the automatic and potentially “infinite” execution of an arrangement of interests no longer acceptable to the contracting parties themselves. This aspect also makes it unlikely that smart contracts can be used to regulate, for example, relationships of duration, precisely because the intrinsic uncertainty connected to the changing conditions over time would be incompatible with the ex ante determination of any possible contractual consequences.
Without prejudice to above important considerations, however, it is worth highlighting the great advantage in terms of reducing transaction costs that widespread adoption of this technological innovation could bring. This is especially true in all those cases where the needs to be met do not require complex negotiation; therefore, it is not unlikely that smart contracts will start to be implemented in all those cases where the parties prefer the speed and certainty of automatic performance of an obligation over the renegotiability or flexibility of the relationship.
In conclusion, there is no question of the usefulness and economic savings that can be achieved by using smart contracts. What is certain is that, as is often the case with any technological innovation, these advantages will only be truly perceived through significant integration and adoption of these tools in our society.
However, it can already be said that smart contracts will find wide application especially in standard relationships where a minimum contribution in terms of creativity and customisation of contractual solutions is required.
Under a different point of view, a real challenge for legal professionals is to be able to integrate such tools into traditional contracts in order to improve and enhance the effectiveness of the legal protection provided. This could be a truly “smart” objective to be achieved.
Insight publishes on the "Mitteilungen der deutschen Patentanwälte" magazine
Insight Studio Legale is pleased to announce that on the journal Mitteilungen der deutschen Patentanwälte it is now online the article by Alessandro Merolla entitled “Doctrine of equivalents in patent infringement: the Italian Supreme Court rules on the relevance of patent prosecution history in the European legal framework”.
Table of contents November issue