Technology impacts almost every industry, and the cannabis industry is no exception. There are multitudes of cannabis patents granted by the United States Patent and Trademark Office (“USPTO”) each year, including the technology to process and cultivate cannabis plants, and the medical uses of cannabis in the treatment of diseases. As states continue to legalize cannabis, the dispute about whether a federal court should apply the illegality doctrine to cannabis-related patents would become more prevalent in the future.
Background
Traditionally, USPTO does not prohibit the filing of patents related to cannabis. In fact, the number of cannabis-related patent filings continues to increase in recent years. The explanation for this increase seems to be related to the more advanced technologies resulting in the rising medical and recreational use of cannabis and a trend favoring the legalization of cannabis on a state-by-state level. 21 states have acted to legalize recreational marijuana, and even more states have legalized the medical use of marijuana. Nevertheless, in most circumstances, at the federal level, marijuana and marijuana-related products are still considered illegal. Because the legalization of cannabis and marijuana is a relatively recent occurrence, unsurprisingly there has been limited cannabis patent litigation in legal history.
With the expectation of increased patent litigation over cannabis patents, the question then becomes whether the illegality doctrine should apply to cannabis patents in a federal court, where marijuana and cannabis are schedule 1 controlled substances under the Controlled Substances Act in the eyes of the federal judiciary. The idea of the illegality doctrine comes from Everet v. Williams, also known as “the Highwayman’s case,” a 1725 case in an English court. The court refused to uphold a lawsuit regarding the enforceability of contracts, which was to share the spoils of the armed robber. “No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act.” Lord Mansfield spoke so. The illegality doctrine is based on the belief that a person shouldn’t be able to benefit from his or her wrongdoing.
Discussion
This question of whether the illegality doctrine should apply to cannabis patents in a federal court has already been raised more often in the legal profession. For example, according to several Goodwin Procter LLP attorneys, including Rob Cerwinski, Brett Schuman, Daniel Mello, and Nikhil Sethi, the uptick in cannabis-related patenting activities in recent years might lead to a potential cannabis patent “war.” These attorneys argue that a federal court should not apply the doctrine because these patents are not the fruit of a crime. There is a big difference between the private agreement between the two criminals in the Highwayman’s case and the patent owners’ rights granted by the USPTO. For example, many cannabis patent holders are pharmaceutical companies and research institutions, instead of criminals. Even the U.S. government holds a cannabis patent. The U.S. Department of Health and Human Services has a patent on certain parts of the marijuana, the non-psychoactive cannabinoids, for their potential use to protect the brain from damage by certain diseases. These holders’ businesses are legal, where the illegality doctrine should not be applied.
A second reason that the illegality doctrine should not be applied is that patent rights themselves do not violate federal drug laws. Patent rights are the rights to exclude others from making or using the invention, which is again, different from the rights to grant owners to make or sell the invention.
Last but not least, if a federal court decides to apply the illegality doctrine to the cannabis patents, it will be in direct conflict with an agency that serves as the national patent office and trademark registration authority for the United States, USPTO.
Future
While marijuana stays illegal under federal law, a large majority of the public seems to favor federal legalization of recreational and medical marijuana according to a CBC News poll published in 2022. As the technologies grow, the public shows support, and states continue to legalize cannabis, this dispute about whether a federal court should apply the doctrine to these patents could become more prevalent.
Have you ever been excited by a flashy movie trailer, only to be sorely disappointed when you get around to seeing the film itself? While it is certainly a common sentiment, most people would not think to litigate over the letdown. Yet in the ongoing case, Conor Woulfe et al v. Universal City Studios LLC et al, two disgruntled movie-watchers have sued Universal City Studios LLC for just such a disappointment, claiming that Universal deceived them with an early trailer for the movie Yesterday.
The movie Yesterday, released in 2019, takes place in a world where everyone except the protagonist mysteriously loses all recollection of The Beatles, allowing the protagonist to pass off the band’s famous songs as his own creations. A trailer for the film featured said protagonist serenading popular actress Ana de Armas with the Beatles song “Something.” Allegedly, this brief sighting of de Armas in the trailer was enough to prompt Conor Woulfe and Peter Michael Rosza to watch Yesterday, and both men paid $3.99 on Amazon to stream it. However, to their immense disappointment, the scene with de Armas from the trailer was removed from the film’s final cut, and de Armas never makes an appearance otherwise.
While someone’s favorite actress being cut from a film without warning sounds like a fairly trivial problem, the resulting lawsuit and its demands are nothing for Universal to laugh at. In January of 2022, Woulfe and Rosza sued Universal in the District Court for the Central District of California. The pair brought several claims that alleged the studio profited from the illegal misrepresentation of the movie, ultimately seeking $5 million for two yet-to-be-certified classes of spurned viewers of Yesterday. Woulfe and Rosza seek class certification for viewers who paid to see the film in California and Maryland.
To combat these claims, Universal filed a special motion to strike this lawsuit under California’s Code of Civil Procedure § 425.16, the state’s anti-SLAPP statute. A SLAPP suit, or a strategic lawsuit against public participation, is generally a lawsuit without legal merit that is brought to dissuade critics from producing negative publicity. In response to such frivolous lawsuits that limit critics’ free speech, many states have enacted Anti-SLAPP statutes. California’s anti-SLAPP statute specifically provides defendants with a special motion to strike a claim that arises from an act in furtherance of free speech and in connection with a public issue, “unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” After the defendant shows that the suit arises from such an act, the burden falls on the plaintiff to show that the complaint is both legally sufficient and “supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.” Hilton v. Hallmark Cards. Universal also filed a motion to dismiss the suit for failure to state a claim, under Federal Rule of Civil Procedure 12(b)(6).
In his ruling, Judge Stephen V. Wilson worked through a multi-step framework laid out by the Ninth Circuit to reach the conclusion that this lawsuit stemmed from Universal’s right to free speech, as Universal’s creations of Yesterday and its trailer both were exercises of free speech. He also ruled that Woulfe and Rosza’s claims were in connection with a public issue for several reasons, including the fact that the user reviews, ratings, and an interview regarding the lack of de Armas in the final cut demonstrated public interest in the dispute. Because the claims center around an act of free speech that is connected to a public issue, Wilson went on to analyze whether Woulfe and Rosza had established a likelihood of success on their claims.
Ultimately, Judge Wilson was persuaded by the majority of Universal’s challenges to the movie viewers’ claims, including barring injunctive relief. However, Wilson did leave room for the suit to continue. Namely, he allowed the plaintiff’s claims of unfair competition, false advertising, and unjust enrichment to continue, and even left open the possibility of monetary damages, stating that “the Court cannot rule as a matter of law that [Woulfe and Rosza] received the full value of what they paid for…”.
Both the unfair competition and false advertising claims take into account the “reasonable consumer standard,” in which a plaintiff must show that the defendant’s misrepresentation is likely to deceive an ordinary consumer acting reasonably under the circumstances. Using this standard, Wilson found that Woulfe and Rosza alleged facts that demonstrate the plausibility that ordinary consumers would be misled by the trailer. Additionally, California’s false advertising law only applies when a significant portion of reasonable consumers could be deceived by a trailer. On this point, he found it plausible that viewers of Yesterday would expect Ana de Armas to feature prominently in the movie, allowing the suit to survive the anti-SLAPP motion and a motion to dismiss.
Notably, Wilson also held that Universal had no defense in the First Amendment’s free speech protections because Woulfe and Rosza had sufficiently alleged that Yesterday’s trailer is false, commercial speech. Specifically, Wilson noted that the First Amendment provides no protection for false or misleading commercial speech. Wilson, applying factors from Bolger v. Youngs Drug Products Corp., found that Yesterday’s trailer constitutes commercial speech because it (1) is an advertisement for the movie, (2) refers to the specific product of the movie, and (3) Woulfe and Rosza have alleged sufficient facts to show that Universal had an adequate economic motivation so that the economic benefit was the studio’s primary purpose for the expression in the trailer.
However, Judge Wilson’s ruling does not mean that any studio whose movie disappoints compared to its trailer is eligible to be sued. Despite many media sources’ bold headlines that movie studios can now be sued over their deceptive trailers, Wilson explicitly limited his holding to “representations as to whether an actress or scene is in the movie, and nothing else.” This statement wisely barred Wilson’s ruling from being used to support lawsuits when moviegoers’ subjective tastes are not met by films whose trailers enticed them. Furthermore, Woulfe and Rosza’s claims have yet to actually succeed–Wilson’s ruling only shows that their surviving claims are plausible and have at least a slim likelihood of success. While this holding certainly does not yet doom movie trailers to lose their artistic freedom of expression, movie studios may want to be a bit more careful about which actors they choose to feature in their trailers moving forward.
Greg Rutkowski illustrates fantastical images for games such as Dungeons & Dragons and Magic the Gathering. Rutkowski’s name has been used thousands of times in generative art platforms, such as Stable Diffusion and Dall-E, flooding the internet with thousands of works in his style. For example, type in “Wizard with sword and a glowing orb of magic fire fights a fierce dragon Greg Rutkowski,” and Stable Diffusion will output something similar to Rutkowski’s actual work. Rutkowski is now reasonably concerned that his work will be drowned out by these hundreds of thousands of emulations, ultimately preventing customers from being able to find his work online.
Examples of images generated by Dream Studio (Stable Diffusion) in Rutkowski’s style.
These machine learning algorithms are trained using freely available information, which is largely a good thing. However, it may feel unfair that an artist’s copyrighted images are freely copied to train their potential replacement. Ultimately, nothing these algorithms or their owners are doing is copyright infringement, and there are many good reasons for this. However, in certain exceptional circumstances, like Rutkowski’s, it may seem like copyright laws insufficiently protect human creation and unreasonably prioritizes computer generation.
A primary reason why Rutkowski has no legal recourse is because an entity that trains its AI on Rutkowski’s copyrighted work is not the person generating the emulating art. Instead, thousands of end-users are collectively causing Rutkowski harm. Since distinct entities cause aggregate harm, there is no infringement. By contrast, if Stable Diffusion verbatim copied Rutkowski’s work to train their AI before generating hundreds of thousands of look-a-likes, this would likely be an unfair infringement. Understanding the importance of this separation is best seen through understanding the process of text-to-art generation and analyzing each person’s role in the process.
Text-to-Image Copyright Analysis
To give a brief summary of this process, billions of original human artists throughout history have created art that has been posted online. Then a group like Common Crawl scrapes those billions of images and their textual pairs from billions of web pages for public use. Later, a non-profit such as LAION creates a massive dataset that includes internet indexes and similarity scores between text and images. Subsequently, a company such as Stable Diffusion trains its text-to-art AI generator on these text-image pairs. Notably, when a text-to-art generator uses the LAION database, they are not necessarily downloading the images themselves to train their AI. Finally, when the end user goes to Dream Studio and types in the phrase “a mouse in the style of Walt Disney,” the AI generates unique images of Mickey Mouse.
Examples of images generated by Dream Studio (Stable Diffusion) using the phrase “a mouse in the style of Walt Disney”
These several distributed roles complicate our copyright analysis, but for now, we will limit our discussion of copyright liability to three primary entities: (1) the original artist, (2) the Text-to-Image AI Company, and (3) the end-user.
The Text-to-Image Company likely has copied Rutkowski’s work. If the Text-to-Image company actually downloads the images from the dataset to train its AI, then there is verbatim intermediate copying of potentially billions of copyrightable images. However, this is likely fair use because the generative AI provides what the court would consider a public benefit and has transformed the purpose and character of the original art. This reasoning is demonstrated by Kelly v. Arriba, where an image search’s use of thumbnail images was determined to be transformative and fair partly because of the public benefit provided by the ability to search images and the transformed purpose for that art, searching versus viewing. Here, the purpose of the original art was to be viewed by humans, and the Text-to-Image AI Company has transformatively used the art to be “read” by machines to train an AI. The public benefit of text-to-art AI is the ability to create complex and novel art by simply typing a few words into a prompt. It is more likely that the Generative AI’s use is fair because the public does not see these downloaded images, which means that they have not directly impacted the market for the copyrighted originals.
The individual end-user is any person that prompts the AI to generate hundreds of thousands of works “in the style of Greg Rutkowski.” However, the end-user has not copied Rutkowski’s art because copyright’s idea-expression distinction means that Rutkowski’s style is not copyrightable. The end-user simply typed 10 words into Stable Diffusion’s UI. While the images of wizards fighting dragons may seem similar to Rutkowski’s work, they may not be substantially similar enough to be deemed infringing copies. Therefore, the end-user similarly didn’t unfairly infringe on Rutkowski’s copyright.
Secondary Liability & AI Copyright
Generative AI portends dramatic social and economic change for many, and copyright will necessarily respond to these changes. Copyright could change to protect Rutkowski in different ways, but many of these potential changes would result in either a complete overhaul of copyright law or the functional elimination of generative art, neither of which is desirable. One minor alteration that could give Rutkowski, and other artists like him, slightly more protection is a creative expansion of contributory liability in copyright. One infringes contributorily by intentionally inducing or encouraging direct infringement.
Dall-E has actively encouraged end-users to generate art “in the style of” artists. So not only are these text-to-art AI companies verbatim copying artists’ works, but they are then also encouraging users to emulate the artists’ work. At present, this is not considered contributory liability and is frequently innocuous. Style is not copyrightable because ideas are not copyrightable, which is a good thing for artistic freedom and creation. So, while the work of these artists is not being directly copied by end-users when Dall-E encourages users to flood the internet with AI art in Rutkowski’s style, it feels like copyright law should offer Rutkowski slightly more protection.
An astronaut riding a horse in the style of Andy Warhol.
A painting of a fox in the style of Claude Monet.
Contributory liability could offer this modicum of protection if, and only if, it expanded to include circumstances where the copying fairly occurred by the contributor, but not the thousands of end-users. As previously stated, the end-users are not directly infringing Rutkowski’s copyright, so under current law, Dall-E has not contributorily copied. However, there has never been a contributory copyright case such as this one, where the contributing entity themselves verbatim copied the copyrighted work, albeit fairly, but the end user did not. As such, copyright’s flexibility and policy-oriented nature could permit a unique carveout for such protection.
Analyzing the potential contributory liability of Dall-E is more complicated than it sounds, particularly because of the quintessential modern contributory liability case, MGM v. Grokster, which involved intentionally instructing users on how to file-share millions of songs. Moreover, Sony v. Universal would rightfully protect Dall-E generally as due to many similarities between the two situations. In that case, the court found Sony not liable for copyright infringement for the sale of VHS recorders which facilitated direct copying of TV programming because the technology had “commercially significant non-infringing uses.” Finally, regardless of Rutkowski’s theoretical likelihood of success, if contributory liability were expanded in this way, then it would at least stop companies such as Dall-E from advertising the fact that their generations are a great way to emulate, or copy, an artist’s work that they themselves initially copied.
This article has been premised on the idea that the end-users aren’t copying, but what if they are? It is clear that Rutkowski’s work was not directly infringed by the wizard fighting the dragon, but what about “a mouse in the style of Walt Disney?” How about “a yellow cartoon bear with a red shirt” or “a yellow bear in the style of A. A. Milne?” How similar does an end-user’s generation need to be for Disney to sue over an end-user’s direct infringement? What if there were hundreds of thousands of unique AI-generated Mickey Mouse emulations flooding the internet, and Twitter trolls were harassing Disney instead of Rutkowski? Of course, each individual generation would require an individual infringement analysis. Maybe the “yellow cartoon bear with a red shirt” is not substantially similar to Winnie the Pooh, but the “mouse in the style of Walt Disney” could be. These determinations would impact a generative AI’s potential contributory liability in such a claim. Whatever copyright judges and lawmakers decide, the law will need to find creative solutions that carefully balance the interests of artists and technological innovation.
On January 2nd, 2023, during a primetime Monday Night Football matchup between the Buffalo Bills at the Cincinnati Bengals, Bills’ safety Damar Hamlin collapsed after being struck in the chest during a routine tackle. Bills’ medical staff rushed to the field, where assistant athletic director Denny Kellington performed CPR for nine minutes after it was discovered that Hamlin had no pulse. Kellington’s actions likely saved Hamlin’s life, as Hamlin had suffered from a severe cardiac arrest. National Football League (NFL) officials responded in the immediate aftermath of the episode by suspending play in the still ongoing football game (Hamlin’s collapse happened with less than six minutes left in the first quarter), before outright canceling the match on Thursday January 5th. The reasons cited for not replaying the match at a later date were all related to a lack of a large impact on who would be playing in the upcoming NFL Playoffs and were unrelated to Hamlin’s current medical status.
In the days that have followed, Hamlin has continued to receive intensive treatment, but his recovery is looking more hopeful by the day. In fact, doctors report that after regaining consciousness one of Hamlin’s first questions was wondering who had won the much-hyped matchup. The NFL, and the larger professional sports world, have banded together around Hamlin, and it has been an incredibly touching display community in the face of potential tragedy. But the episode also draws attention to the larger issue of liability for injuries in professional sports.
While an on-the-job injury at a more “normal” job with a low risk of injury, and almost no risk of death, would likely lead to a suit seeking to recover damages for the injury and its consequences, Football remains different. The kind of injuries like the one Hamlin suffered remain an “inherent risk” to the sport, and players take on an assumption of that risk in choosing to play football. In Morgan v. Kent State Univ. (2016), the risks inherent in an activity are those that are “foreseeable, common, and customary” to an activity. Certain risks “are so inherent in some activities that they cannot be eliminated, and therefore a person participating in such activities tacitly consents to the risks involved.” It is foreseeable, common, and customary to be tackled or to tackle another in professional football, and as anyone who watched the replay might be able to see, the tackle is nothing out of the ordinary. Hamlin, therefore, would be hard-pressed to assign any potential injury liability to the NFL, the Bengals, the Bills, or Tee Higgins (the player who he was tackling), because Hamlin assumed the risk that he might be injured throughout the normal course of the game. This is further exemplified by Avila v. CitrusCommunityCollege Dist. (2006), where the court stated that “the football player who steps onto the gridiron consents to his opponents hard tackle.” Hamlin, by playing Football, consented to being hit in the chest during a tackle. While the result of said tackle was unlikely and harrowing to say the least, the risk of that outcome was assumed. Leagues like the NFL try to strike a balance between encouraging players to go out and give their all in any given match, and remain safe while doing so, and the balance always appears to be lopsided to giving it their all.
Hamlin’s injury occurred during a routine tackle; it was an example of the medical phenomenon commotio cordis, where blunt force trauma hitting the chest at just the wrong moment can cause an irregular and dangerous rhythm. This was an unlikely outcome to a standard play, but it was not an impossible outcome. Hamlin’s cardiac arrest is nowhere near the first injury that has grasped the attention of the public, and it is likely not going to be the last. The NFL itself has had a history with high profile catastrophic injuries, and deaths that have resulted in part due to trauma related to playing professional football. And these injuries extend far beyond Hamilin (or the high-profile concussion settlement of the 2010s). The National Center for Catastrophic Sports Injury Research keeps records of football fatalities and catastrophic injuries going back decades, related to professional and amateur football. Between 2016-2021, 140 catastrophic injuries to football players were reported across experience levels, while in 2021, 20 football related deaths were reported.
Players are aware of the potential risks of football, but that does not stop the Monday Night Football incident from being a wakeup call. Tennessee Titans linebacker Dylan Cole after the incident said that “[he] always said [he] signed on the dotted line, so [he] understands what [they]’re getting into” but that does not stop the hit from being “tough to watch” and a “reminder to the world of how precious life is and how absorbed we can get into things that really, truly don’t matter.”
While this incident ends in a fairytale fashion, with the world surrounding Hamlin in love and support, and Hamlin offering words of support to his fellow Bills players, there’s no guarantee that the next public injury ends the same way. And when it comes, because it will come, it is the player, and not the league, who remains on the hook for the injury.
Gacha games were first developed and received popularity in the early 2010s with the release of the first notable gacha game which shifted Japanese gaming culture forever. Gacha games are video games that revolve around a “gacha” (toy vending machine) mechanic. This mechanic functions through virtual in-game currency that is traded for a randomized item to be used in the video game. Items include anything from characters to weapons and each fall on a spectrum of rarity and utility. Therefore, players are known to “roll” for the rarest items multiple times during the window of availability.
In the United States, gacha games have been in the forefront of gaming in recent years with the release of hits like Genshin Impact. Games like these are free to download but include in-game purchases that often raise more revenue than would purchases for the game itself if it were sold for a one-time retail price. Popular games nowadays are sold for upwards of $60 and are anticipated to increase in price through the upcoming year. Since its release in September 2020, Genshin Impact has accumulated over 127 million downloads, and since then, the game has generated $3.7 billion in revenue.
How is gacha gaming harmful?
In-game currency is much like gambling chips as they are both purchased with real money. Also like gambling, gacha games are highly addictive. The chance-based mechanics of the games render them predatory and exploitative of their users. Addicts of gacha games are known to spend thousands of dollars on in-game currency, desperate for the best characters, gear, and skins. However, the difference between gacha games and gambling is that the prizes in gacha games have little real-world relevance. Gamblers and casinos have the opportunity to win a jackpot prize of real money for real purchases while gacha gamers are betting for virtual prizes that are later superseded by new items with each update to the game.
While gacha games are free to download, they are incredibly hard to succeed in if a player chooses to be “free-to-play”. Obviously, a free-to-play player will struggle when up against a “whale” who has invested a ton of money to possess the best items. The competitive atmosphere of these games influences their players to use their real money to acquire in-game items that will boost their stats. With new content being released on a weekly, monthly, or quarterly basis, a cycle is created wherein players must continue to gamble their money to maintain their status or ranking in the game.
What are the legal issues of gacha gaming?
Fundamentally, gacha games and gambling are almost identical. An alarming difference is that age restrictions for gacha games are lenient and hard to enforce. In casinos and with online gambling, the minimum age of eighteen is regularly enforced. Under Washington law, penalties for underage gambling include fines (up to $125), up to four hours of community service, court costs, and forfeiture of any winnings. Meanwhile, most gacha games have a minimum age of twelve. Genshin Impact is rated twelve and over and suggests having parental or guardian consent upon purchasing in-game currency. Still, there is no age verification process in the game, and there is no way to monitor whether a child has received parental consent. Compared to gambling, the innocent mask of a virtual game makes parents less likely to monitor the use of gacha games, increasing the likelihood that children are spending hours on these games unsupervised. There are sure to be ill effects with exposure to gambling at such a young age, including strained relationships, delinquency, and depression. If the gambling industry deems age restrictions necessary, then why should gacha games be open and accessible to teenagers and children?
A number of countries have enacted legislation that limits and restricts gacha gaming. In 2012, Japan’s Consumer Affairs Agency declared complete gacha to be a violation of the law. Complete gacha is a particular model of gacha wherein players are required to collect a series of items in order to claim a grand prize. Japan’s Consumer Affairs Agency felt that complete gacha was too similar to gambling, and the decision was a reaction to two cases where one middle schooler spent $5,000 in a month and another student spent $1,500 in three days on complete gacha rewards. China has also implemented restrictive gacha law that discloses the drop rate of items and loot boxes and a system of “pity” where a player is guaranteed an item after a certain number of purchases. The UK Gambling Commission has stated that video game loot boxes are a reason behind the rise in underage gambling and more children being classified as “problem gamblers”. Currently, only a handful of countries have active gacha regulations, and these games are fully banned in Belgium and the Netherlands.
In the United States, the circuit courts are split over whether gacha games constitute gambling. For one, judges cannot decide what the intrinsic value of virtual currency should be. Second, the nature of gacha games results in injuries that are often intangible and not addressable through the current court system and statutory framework. For example, if gacha games are not considered gambling, then plaintiffs cannot reasonably bring their claims under their state’s anti-gambling statutes. However, this has not stopped claims against these video games. In Taylor v. Apple, Inc., plaintiffs sought to hold Apple liable for having games on their app store with “features legally equivalent to slot machines.” A plaintiff’s minor son felt that he had been “induced” to make “in-game” purchases on loot boxes while playing Brawl Stars. The California federal district court dismissed the complaint and suggested seeking legislative remedies as loot boxes are not plainly prohibited by statute. In recent years, several states including Washington have introduced bills to regulate loot boxes in games (though all have failed). In 2019, the Protecting Children From Abusive Games Act was introduced in the Senate with intentions to regulate pay-to-win microtransactions and loot boxes in minor-oriented games. All these unanswered questions are understandable when it comes to the new realm of gacha gaming, but the United States will have to make a decision sooner or later as young and unsuspecting Americans continue to download these games and fall victim to their tactics.
Washington Journal of Law, Technology & Arts 