Duped or Duplicated? The Difference Between A Counterfeit And An Accessible Homage

By: HR Fitzmorris

Even non-legally versed consumers know that counterfeit or fraudulent products are illegal. In fact, some may have even experienced the euphoria of getting what they thought was a steal on a new designer product only to find out that it was a different type of ‘steal’ altogether. 

But what about “dupes”?

Unlike counterfeit products, which are copies of trademarked consumer goods meant to be passed off as the real thing, dupes (short for duplicate or duplication) are products that mimic other companies’ popular products without seeking to trick the consumer into thinking it’s the real deal. Dupes usually mimic high-end, in-demand goods and are sold at a much lower price-point—essentially the Gen Z version of a “knock-off.” Dupes have become extremely popular with the rise of social media advertising aimed at younger demographics. Teens that may not be able to afford a wildly trendy Cartier ring ($2,995) certainly may be able to scrounge up the change for the Amazon dupe ($12.99, with free next day shipping!).

The “Real” Fakes

To the everyday consumer the distinction between a counterfeit and a dupe may seem dubious, but in legal terms it’s significant. Counterfeiting is a concept used to “indicate an infringement of intellectual property rights, namely acts (use, manufacturing, or sale, for example) carried out without the consent of the intellectual property right holder.” “Counterfeiting” is the “act of making or selling fake products with the intent to deceive consumers. In the United States, it is illegal to produce, distribute, or sell counterfeit goods.” 

There are more issues with counterfeit goods outside of intellectual property infringement and their morally dubious nature. There are also possible health and safety issues with fake products that flout FDA or consumer protection standards.  There’s of course, the economic harm to legitimate businesses that lose money when their customers are lured away. The ever-present environmental harms associated with the flood of mass-produced, easily discarded items lurk behind the scenes. There’s even concern that counterfeit goods play a role in funding broader criminal enterprises.

Dupes: Duplication or Duplicity?

One of the important elements of counterfeiting is the “intent to deceive,” and this element is a significant piece of what separates dupes from counterfeits. Dupes do not claim to be the real-deal. In fact, part of their allure is that purchasers are getting the same or similar quality and functionality of the original without the original’s branding (and the associated price mark-up). As Claire Kane put it in her article for online publication MIC: 

While “fake” is a dirty word in fashion and “counterfeit” sounds unethical, the more neutral-sounding “dupe” suggests making savvy purchases and “somehow cheat[ing] the system” to get the look for less.

Companies hoping to crack down on dupes and knockoffs face an uphill battle in court. Without distinctive, trademarked branding that makes counterfeits fall within the reach of traditional trademark infringement, brands find little sympathy in the law. The current state of U.S. copyright law as it pertains to clothing and accessories has significant gaps. U.S. copyright law does not fully protect items defined as useful articles, which are “objects having an intrinsic utilitarian function” and “clothing” is the very first example of what counts. So, without the direct, obvious infringement on the branding, companies are unlikely to prevail.

Can You  Smell the Difference?

An especially interesting sector of dupes gaining popularity are designer fragrance dupes. Most dupes, like a certain handbag or shoe dupe, the knockoff brand doesn’t need (or want) to explicitly refer to the original product—it relies on the consumer to ‘get’ the reference. Not so with replica fragrance brands such as Oakcha, Dossier, or ALT Fragrances, which directly rely on references to their designer counterparts in their marketing. In fact, they often list the fragrance they were “inspired by” right on the bottle, or in the product description. So, what makes fragrance such a fertile ground for direct and blatant knockoffs without running afoul of trademark or copyright law? 

The answer is a combination of technology and law. First, new technological developments have made it extremely easy to reverse engineer specific fragrance formulations. Also, while the branding or packaging of a perfume may be eligible for copyright protection, a perfume’s scent is not because the scent serves as the “functional purpose of the product.” This makes it, under trademark law, ineligible for registration with the USPTO (functionality is a bar to registration). Perfumers can look to other avenues of protection such as obtaining a patent over the perfume formula, or trade secret protection, but these protections are difficult and costly to obtain and have drawbacks like disclosure. 

The legal landscape concerning dupes is unique and developing. It is inconsistent across products and complicated across industries. Whether you think dupes are simply knockoffs with a moral makeover or a legitimate industry that provides consumers with accessible choices, the law is unlikely to be the force that stems the tide.

Fan Creativity in Gaming and IP Infringement

By: Yixin Bao

Gaming is known to be a big and rapidly growing industry. In recent years, the COVID-19 pandemic has contributed to a surge in gaming activity and revenue. Many people turn to gaming as a form of entertainment during their time at home. According to The NPD Group, the average time people spent on gaming rose from 12.7 hours per week in 2019 to 14.8 hours per week in 2020 and to 16.5 hours per week in 2021. Statista data further shows that the estimated global gaming market will increase to $268.8 billion annually in 2025 from $155.89 billion in 2020. 

There are many different types of gaming. The most commonly recognized ones include mobile gaming, console gaming, and PC gaming. In addition, new categories have emerged, such as esports and virtual reality gaming. With the increasing popularity of gaming and the increasing number of players, the gaming industry is expected to continue to grow in the future. 

As popularity of the gaming industry is on the rise, so are related intellectual property infringement issues. Intellectual property can include inventions, artistic works, designs, and names that are used in commerce. Normally, IP infringement includes patent infringement, copyright infringement, or trademark infringement. IP infringement can result in legal action taken by the owner against the infringing party, including but not limited to injunctions and monitary damages. 

A “fan” or “fanatic” is defined as someone who exhibits intense admiration and enthusiasm for something or somebody. Without a doubt, the gaming industry has its own fans. In fact, this number can be huge. For example, League of Legends (“LoL”) is known to be one of the most popular online games in the whole world. It is said that there are currently 180 million League of Legends players right now in 2023. Esports also heavily influenced the growth of the game’s popularity. Each year, the World Championship is organized so that teams from all different countries gather together and compete for the best team. In 2018, 99.6 million unique viewers watched the World Championship. Although it can be difficult to accuralty measure how many fans a game has, as some will not identify themselves as fans, it is reasonable to assume LoL’s fanbase is enormous. 

Many fans of the gaming industry make their own content. This includes, for example, creating new characters or inventing new storylines based on the original characters and artworks. On one hand, this benefits the gaming industry because fans give free promotion for the games. On the other hand, however, this is when the fan creativity ends, and IP infringement occurs. Kostya Lobov, a partner at a United Kingdom (“UK”) law firm, discussed the balance between fan creativity and IP infringement. Lobov admitted that companies didn’t want to alienate genuine fans, but some bad actors tried to profit from making use of the others’ IP rights. This might lead to trademark and copyright infringement. This also happens in the United States. 

Gaming companies often issue take-down requests in response to content created using their intellectual property. While some companies have a zero-tolerance policy and remove most potentially infringing content, others are more lenient and only take action when the content is being used for commercial purposes. Although fair use may allow for some creative use of copyrighted material without permission, it is important for fans to be cautious. Non-commercial use may support a fair use argument, but it is not definitive. Other factors, such as the nature of the copyrighted material, may also play a significant role. Overall, as long as one creates something that uses the gaming company’s IP rights, he or she bears a degree of risk of infringement. 

In conclusion, the companies in the gaming industry should consider carefully how to set up their line between fan creativity and IP infringement. There can be thousands of potential content that can technically infringe on the gaming companies’ IP rights. Enforcement can be infinite and difficult if the line is too blurry. The legal actions might also “promote” their games in a negative way. In the end, the gaming industry should learn how to coexist with fan creativity and learn to profit from the efforts of fans while at the same time protecting its own rights.

Alexa: Are You Going to Testify Against Me?

By: Melissa Torres

Life seems pretty great in a world where we can turn lights off, play music, and close the blinds by simply speaking it into existence. But, what happens when your conversations or home noises are used against you in a criminal investigation? 

Smart speakers, such as Google Home and Amazon Alexa, are marketed as great tech gifts and the perfect addition to any home. A smart speaker is a speaker that can be controlled with your voice using a “virtual assistant”. It can answer questions for you, perform various automated tasks and control other compatible smart devices by simply activating its “wake word.”

According to Amazon.com, in order for a device to start recording, the user has to awaken the device by saying the default word, “Alexa.” The website states, “You’ll always know when Alexa is recording and sending your request to Amazon’s secure cloud because a blue light indicator will appear or an audio tone will sound on your Echo device.” Unless the wake word is used, the device does not listen to any other part of your conversations as a result of built-in technology called “keyword spotting”, according to Amazon.

Similarly, Google states, “Google Assistant is designed to wait in standby mode until it detects an activation, like when it hears ‘Hey Google.’ The status indicator on your device will let you know when Google Assistant is activated. When in standby mode, it won’t send what you’re saying to Google servers or anyone else.” 

Consumers consent to being recorded when they willingly enter a contract with these smart devices by clicking “I agree to the terms and conditions.” However, most people assume this refers only when implicating the “wake word.” Despite assurances from tech giants that these devices do not record without being prompted, there have been many reports that suggest otherwise. And recent in years, these smart devices have garnered attention as they have been called as the star witness in murder investigations.  

In October 2022, someone fatally shot two researchers before setting fire to the apartment they were found in. According to the report, Kansas police believe the killer was inside the apartment with the duo for several hours, including before and after their deaths. Investigators found an Amazon Alexa device inside the apartment and filed a search warrant for access to the device’s cloud storage, hoping it may have recorded clues as to who is responsible for the murders. If the police obtain relevant information, they may be able to use it in court, depending on how this evidence is classified.

Under the Federal Rules of Evidence, all relevant evidence is admissible unless another rule specifies otherwise. Specifically, statements that are considered hearsay are not admissible unless an exception applies. Hearsay is any statement made outside the presence of court by a person for the purpose of offering it to prove the truth of the matter asserted. Although these devices technically do produce statements, courts have held that a statement is something uttered by a  person, not a machine. However, there is an important distinction between machines that have computer stored and computer generated data. Computer stored data that was entered by a human has the potential to be hearsay, while computer generated data without the assistance or input of a person is not considered hearsay.  The question of how these statements will be classified and whether they will be permitted in court is up to the judge. 

As such, this isn’t the first time police have requested data from a smart speaker during a murder investigation. In 2019, Florida police obtained search warrants for an Amazon Echo device believing it may have captured crucial information surrounding an alleged argument at a man’s home that ended in his girlfriend’s death. In 2017, a New Hampshire judge ordered Amazon to turn over two days of Amazon Echo recordings in a case where two women were murdered in their home. In these previous cases, the parties consented to handing over the data held on these devices without resistance. In 2015, however, Amazon pushed back when Arkansas authorities requested data over a case involving a dead man floating in a hot tub. Amazon explained that while it intends not to obstruct the investigation, it also seeks to protect its consumers First Amendment rights. 

According to the complaint, Amazon’s legal team wrote, “At the heart of that First Amendment protection is the right to browse and purchase expressive materials anonymously, without fear of government discovery,” later explaining that the protections for Amazon Alexa were twofold: “The responses may contain expressive material, such as a podcast, an audiobook, or music requested by the user. Second, the response itself constitutes Amazon’s First Amendment-protected speech.” Ultimately, the Arkansas court never decided on the issue as the implicated individual offered up the information himself.      

Thus, a question is still unanswered: Exactly how much privacy can we reasonably expect when installing a smart speaker? As previously mentioned, these smart speakers have been known to activate without the use of a “wake word”, potentially capturing damning conversations. Without a specified legal standard, there’s not much consumers can do to protect their private information from being shared as of now, fueling the worry that these devices can be used against them. Tech companies, like Amazon and Google, suggest going into the settings and turning off the microphone when you aren’t using it, but that requires trusting the company to actually honor those settings. Users also have the option to review and delete recordings, but again you have to trust the company to honor this. The only sure way to protect yourself from these devices is by simply not purchasing them. If you can’t bring yourself to do that, be sure to unplug the devices when you’re not using them. Otherwise, it’s possible these smart speakers may be used as evidence against you in court.

AI Art: Infringement is Not the Answer

By: Jacob Alhadeff

In the early 2000s, courts determined that the emerging technology of peer-to-peer “file-sharing” was massively infringing and categorically abolished its use. Here, the Ninth Circuit and Supreme Court found that Napster, Aimster, and Grokster were secondarily liable for the reproductions of their users. Each of these companies facilitated or instructed their users on how to share verbatim copies of media files with millions of other people online. In this nascent internet, users were able to download each other’s music and movies virtually for free. In response, the courts held these companies liable for the infringements of their users. In so doing, they functionally destroyed that form of peer-to-peer “file-sharing.” File-sharing and AI are in not analogous, but multiple recent lawsuits present a similarly existential question for AI art companies. Courts should not find AI art companies massively infringing and risk fundamentally undermining these text-to-art AIs.

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Text-to-art AI, aka generative art or AI art, allows users to type in a simple phrase, such as “a happy lawyer,” and the AI will generate a nightmarish representation of this law student’s desired future. 

Currently, this AI art functions only because (1) billions of original human authors throughout history have created art that has been posted online, (2) companies such as Stability AI (“Stable Diffusion”) or Open AI (“Dall-E”) download/copy these images to train their AI, and (3) end-users prompt the AI, which then generates an image that corresponds to the input text. Due to the large data requirements, all three of these steps are necessary for the technology, and finding either the second or third steps generally infringing poses and existential threat to AI Art. 

In a recent class action filed against Stability AI, et al (“Stable Diffusion”), plaintiffs allege that Stable Diffusion directly and vicariously infringed on the artist’s copyright through both the training of the AI and the generation of derivative images, i.e., steps 2 and 3 above. Answering each of these claims requires complex legal analyses. However, functionally, a finding of infringement on any of these counts threatens to fundamentally undermine the viability of text-to-art AI technology. Therefore, regardless of the legal analysis (which likely points in the same direction anyways) courts should not find Stable Diffusion liable for infringement because doing so would contravene the constitutionally enumerated purpose of copyright—to incentivize the progress of the arts. 

In general, artists have potential copyright infringement claims against AI Art companies (1) for downloading their art to train their AI and (2) for the AI’s substantially similar generations that the end-user prompts. In the conventional text-to-art AI context, these AI art companies should not be found liable for infringement in either instance because doing so would undermine the progress of the arts. However, a finding of non-infringement leaves conventional artists with unaddressed cognizable harms. Neither of these two potential outcomes are ideal. 

How courts answer these questions will shape how AI art and artists function in this brave new world of artistry. However, copyright infringement, the primary mode of redress that copyright protection offers, does not effectively balance the interests of the primary stakeholders. Instead of relying on the courts, Congress should create an AI Copyright Act that protects conventional artistry, ensures AI Art’s viability, and curbs its greatest harms. 

Finding AI Art Infringing Would Undermine the Underlying Technology

A finding of infringement for the underlying training or the outputs undermines AI Art for many reasons: copyright’s large statutory damages, the low bar for granting someone a copyright, that works are retroactively copyrightable, the length of copyright, and the volume of images the AI generates and needs for training.

First, copyright provides statutory damages of $750 to $30,000 and up to $150,000 if the infringement is willful. Determining the statutory value of each infringement is likely moot because of the massive volume of potential infringements. Moreover, it is likely that if infringement is found, AI art companies would be enjoined from functioning, as occurred in the “file-sharing” cases of the early 2000s. 

Second, the threshold for a copyrightable work is incredibly low, so it is likely that many of the billions of images used in Stable Diffusion’s training data are copyrightable. In Feist, the Supreme Court wrote, “the requisite level of creativity is extremely low [to receive copyright]; even a slight amount will suffice. The vast majority of works make the grade quite easily.” This incredibly low bar means that each of us likely creates several copyrightable works every day. 

Third, works are retroactively copyrightable, meaning that the law does not require the plaintiff to have registered their work with the copyright office to receive their exclusive monopoly. Therefore, an author can register their copyright after they are made aware of an infringement and still have a valid claim. If these companies were found liable, then anyone with a marginally creative image in a training set would have a potentially valid claim against a generative art company.

Fourth, the copyright monopoly lasts for 70 years after the death of the author. Therefore, many of the copyrights in the training set have not lapsed. Retroactive copyright registration combined with the extensive duration of copyrightability means that few of the training images are likely in the public domain. In other words, “virtually all datasets that will be created for ML [Machine Learning] will contain copyrighted materials.”

Finally, as discussed earlier, the two bases for infringement claims against the AI art companies are (1) copying to train the AI and (2) copying in the resultant end generation. Each basis would likely result in billions or millions of potential claims, respectively. First, Stable Diffusion is trained on approximately 5.85 billion images which they downloaded from the internet. Given these four characteristics of copyright, it is likely that if infringement were found, many or all of the copyright owners of these images would then have a claim against AI art companies. Second, regarding infringement of end generations, Dall-E has suggested that their AI produces millions of generations every day. If AI art companies were found liable for infringing outputs, then any generation that was found to be substantially similar to an artist’s copyrighted original would be the basis of another claim against Dall-E. This would open them up to innumerable infringement claims every day. 

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At the same time, generative art is highly non-deterministic, meaning that, on its face, it is hard to know what the AI will generate before it is generated. The AI’s emergent properties, combined with the subjective and fact-specific “substantial similarity” analysis of infringement, do not lend themselves to an AI Art company ensuring that end-generations are non-infringing. More simply, from a technical perspective, it would be near-impossible for an AI art company to guarantee that their generations do not infringe on another’s work. 

Finding AI art companies liable for infringement may open them up to trillions of dollars in potential copyright lawsuits or they may simply be enjoined from functioning.

An AI Copyright Act

Instead, Congress should create an AI Copyright Act. Technology forcing a reevaluation of copyright law is not new. In 1998, Congress passed the DMCA (Digital Millennium Copyright Act) to fulfill their WIPO (World Intellectual Property Organization) treaty obligations, reduce piracy, and facilitate e-commerce. While the DMCA’s overly broad application may have stifled research and free speech, it does provide an example of Congress recognizing copyright’s limitations in addressing technological change and responding legislatively. What was true in 1998 is true today. 

Finding infringement for a necessary aspect of text-to-art AI may fundamentally undermine the technology and run counter to the constitutionally enumerated purpose of copyright—“to promote the progress of science and useful arts.” On the other hand, finding no infringement leaves these cognizably harmed artists without remedy. Therefore, Congress should enact an AI Copyright Act that balances the interests of conventional artists, technological development, and the public. This legislation should aim to curb the greatest harms posed by text-to-art AI through a safe harbor system like that in the DMCA. 

Cheaters Never Win, Bungie’s 4.3 Million Dollar Award Against AimJunkies

By: Perry Maybrown

Does anyone else remember being a kid, getting stuck on that super hard level and having to insert a Game Genie or GameShark into their machine to activate cheats? Apparently Nintendo really did not like these types of add-ons, so they sued the company that made them, and lost. But in today’s internet age, cheating has gotten more sophisticated, and much more illegal. 

Earlier this month, AimJunkies.com, a website that offers video game cheats for sale, was ordered by an arbitration judge to pay Bungie 4.3 million dollars after being sued for copyright infringement and violations of the Digital Millennium Copyright Act (DMCA). Bungie followed up by filing a motion with the court, to affirm this monetary award. 

Bungie brought nine claims in its original complaint filed in 2021 . The company argued that AimJunkies had infringed upon their copyright of Destiny 2, by “copying, producing, preparing unauthorized derivative works from, distributing and/or displaying Destiny 2 publicly all without Bungie’s permission.” Under those same facts, AimJunkies also infringed upon Bungie’s Destiny 2 trademarks. Furthermore, by making use of Bungie’s trademarks and copyrights, AimJunkies was also accused of false designation of origin. As well as two separate DMCA violations, breach of contract, tortious interference, consumer protection act violations and unjust enrichment. 

Later in 2022, a court dismissed Bungie’s copyright infringement allegations, for failure to state a claim. And while the copyright issue was dismissed, the door was still left open by the judge for Bungie to refile the claim later, with more evidence. Which Bungie unsurprisingly did. The court later upheld this amended complaint when AimJunkies once again tried to get it dismissed. 

After substantial litigation, Bungie decided to change tactics. Rather than attacking AimJunkies in court, they would drag them into mandatory arbitration.  This was accomplished by citing Destiny 2’s user agreement. Whenever a user plays games online, they are usually required to sign some kind of user agreement, which almost alway includes a mandatory arbitration agreement. Arbitration is a process that happens out of court, where two sides argue their case to a neutral arbitrator (usually a retired judge). There is a lot of controversy surrounding mandatory arbitration. For one thing, the “neutral” party deciding the case is usually paid/hired by whatever company included the arbitration agreement in the first place. It’s also difficult to overturn an arbitration agreement, as decisions can only be challenged for a limited number of very specific issues. 

A judge agreed to allow claims four through nine in Bungie’s lawsuit to be decided by mandatory arbitration. This meant that JAMS, one of the world’s largest private alternative dispute resolution providers, would be overseeing these six claims. Thus beginning the long, 9 month, process of arbitration. Bungie won and was awarded more than $4 million in damages as reported by TorrentFreak

So how did the arbitrator reach that huge number? It’s mostly thanks to the DMCA. The DMCA is an amendment to the copyright act from 1998 which seeks to address the relationship between the internet and copyright. The DMCA includes a section also referred to as the anti-circumvention law, which makes it illegal to knowingly circumvent a copyrighted work’s electronic security measures. For example, most video games have some kind of security measure, or Digital Rights Management (DRM) that stops users from getting into the source code. But some bad actors will sneak around these protections, so they can get a peek into the code. This allows those same bad actors unfettered access to the games, making it possible for them to reverse engineer different systems or download the game itself and share it. In this case the arbitrator found that AimJunkies had circumvented Destiny 2’s DRM to see the code and develop an effective cheat. Following § 1203 of the DMCA, the arbitrator awarded Bungie 2,500 per violation. With  102 violations, that meant AimJunkies was fined $255,000 for just one of Bungie’s six claims. 

Additionally, by hosting the cheats and selling them, the arbiter found that AimJunkies was in violation of the anti-trafficking provisions of the DMCA. This is where the costs really start to stack up. Just like the previous issue, Bungie was granted $2,500 per violation. With more than  1,316 copies of the Destiny 2 cheat sold, AimJunkies faced a whopping  $3,402,500.00 in anti-trafficking violations.

Finally, Bungie was awarded a further $738,722 in costs and attorney’s fees after proving AimJunkies had committed spoliation, the intentional destruction of evidence. This was found on the grounds that AimJunkies failed to keep proper financial records even after receiving a cease and desist letter from Bungie, which the arbitrator found to be a purposeful choice.

While this is a huge win for Bungie, the war is not over. As of February 28, 2023, AimJunkies is attempting to contest the arbitration decision. While it is unclear whether they will succeed, it’s a good lesson for us all. Just like the old saying goes, cheaters never win.