Tag: unfair trade practice

Unfair or deceptive trade practices

Voice Cloning

Copyright cannot be claimed in a voice. Copyright law protects only expression, not a person’s corporeal attributes.

Nipper, painting of dog listening to phonograph, by Francis Barraud (1898-1899)
Painting of Nipper by Francis Barraud (1898-99); subsequently used as a trademark with “His Master’s Voice.”

 

Voice cloning is one of the generative-AI technologies that I have described as a perfect tool for the age of deception. Now the issues it raises are reaching the courts. 

Lehrman v. Lovo, Inc.

On July 10, 2025, the federal district court for the Southern District of New York issued an Order granting in part and denying in part a motion to dismiss a putative class action lawsuit that Paul Lehrman and Linnea Sage commenced against Lovo, Inc. The lawsuit, Lehrman v. Lovo, Inc., alleges that Lovo used artificial intelligence to make and sell unauthorized “clones” of their voices.

Specifically, the complaint alleges that the plaintiffs are voice-over actors. For a fee, they read and record scripts for their clients. Lovo allegedly sells a text-to-speech subscription service that allows clients to generate voice-over narrations. The service is described as one that uses “AI-driven software known as ‘Generator’ or ‘Genny,'” which was “created using ‘1000s of voices.'” Genny allegedly creates voice clones, i.e., copies of real people’s voices. Lovo allegedly granted its customers “commercial rights for all content generated,” including “any monetized, business-related uses such as videos, audio books, advertising promotion, web page vlogging, or product integration.” (Lovo terms of service.) The complaint alleges that Lovo hired the plaintiffs to provide voice recordings for “research purposes only,” but that Lovo proceeded to exploit them commercially by licensing their use to Lovo subscribers.

This lawsuit ensued.

The complaint sets out claims for:

  • Copyright infringement
  • Trademark infringement
  • Breach of contract
  • Fraud
  • Conversion
  • Unjust enrichment
  • Unfair competition
  • New York civil rights laws
  • New York consumer protection laws.

The defendant moved to dismiss the complaint for failure to state a claim.

The copyright claims

Sage alleged that Lovo infringed the copyright in one of her voice recordings by reproducing it in presentations and YouTube videos. The court allowed this claim to proceed.

Plaintiffs also claimed that Lovo’s unauthorized use of their voice recordings in training its generative-AI product infringed their copyrights in the sound recordings. The court ruled that the complaint did not contain enough factual detail about how the training process infringed one of the exclusive rights of copyright ownership. Therefore, it dismissed this claim with leave to amend.

The court dismissed the plaintiffs’ claims of output infringement, i.e., claims that the “cloned” voices the AI tool generated infringed copyrights in the original sound recordings.

Copyright protection in a sound recording extends only to the actual recording itself. Fixation of sounds that imitate or simulate the ones captured in the original recording does not infringe the copyright in the sound recording.

This issue often comes up in connection with copyrights in music recordings. If Chuck Berry writes a song called “Johnny B. Goode” and records himself performing it, he will own two copyrights – one in the musical composition and one in the sound recording. If a second person then records himself performing the same song, and he doesn’t have a license (compulsory or otherwise) to do so, that person would be infringing the copyright in the music but not the copyright in the sound recording. This is true even if he is very good at imitating Berry’s voice and guitar work. For a claim of sound recording infringement to succeed, it must be shown that the actual recording itself was copied.

Plaintiffs did not allege that Lovo used Genny to output AI-generated reproductions of their original recordings. Rather, they alleged that Genny is able to create new recordings that mimic attributes of their voices.

The court added that the sound of a voice is not copyrightable expression, and even if it were, the plaintiffs had registered claims of copyright in their recordings, not in their voices.

The trademark claims

In addition to infringement, the Lanham Act creates two other potential bases of trademark liability: (1) false association; and (2) false advertising. 15 U.S.C. sec. 1125(a)(1)(A) and (B). Plaintiffs asserted both kinds of claims. The judge dismissed these claims.

False association

The Second Circuit court of appeals recently held, in Electra v. 59 Murray Enter., Inc. and Souza v. Exotic Island Enters., Inc., that using a person’s likeness to create an endorsement without the person’s permission can constitute a “false association” violation. In other words, a federally-protected, trademark-like interest in one’s image, likeness, personality and identity exists. (See, e.g., Jackson v. Odenat.)

Although acknowledging that this right extends to one’s voice, the judge ruled that the voices in this case did not function as trademarks. They did not identify the source of a product or service. Rather, they were themselves the product or service. For this reason, the judge ruled that the plaintiffs had failed to show that their voices, as such, are protectable trademarks under Section 43(a)(1)(A) of the Lanham Act.

False Advertising

Section 43(a)(1)(B) of the Lanham Act (codified at 15 U.S.C. sec. 1125(a)(1)(B)) prohibits misrepresentations about “the nature, characteristics, qualities, or geographic origin of . . . goods, services, or commercial activities.” The plaintiffs claimed that Lovo marketed their voices under different names (“Kyle Snow” and “Sally Coleman.”) The court determined that this was not fraudulent, however, because Lovo marketed them as what they were, namely, synthetic clones of the actors’ voices, not as their actual voices.

Plaintiffs also claimed that Lovo’s marketing materials falsely stated that the cloned voices “came with all commercial rights.” They asserted that they had not granted those rights to Lovo. The court ruled, however, that even if Lovo was guilty of misrepresentation, it was not the kind of misrepresentation that comes within Section 43(a)(1)(B), as it did not concern the nature, characteristics, qualities, or geographic origin of the voices.

State law claims

Although the court dismissed the copyright and trademark claims, it allowed some state law claims to proceed. Specifically, the court denied the motion to dismiss claims for breach of contract, violations of sections 50 and 51 of the New York Civil Rights Law, and violations of New York consumer protection law.

Both the common law and the New York Civil Rights Law prohibit the commercial use of a living person’s name, likeness or voice without consent. Known as “misappropriation of personality” or violation of publicity or privacy rights, this is emerging as one of the leading issues in AI law.

The court also allowed state law claims of false advertising and deceptive trade practices to proceed. The New York laws are not subject to the “nature, characteristics, qualities, or geographic origin” limitation set out in Section 43(a) of the Lanham Act.

Conclusion

I expect this case will come to be cited for the rule that copyright cannot be claimed in a voice. Copyright law protects only expression, not a person’s corporeal attributes. The lack of copyright protection for a person’s voice, however, does not mean that voice cloning is “legal.” Depending on the particular facts and circumstances, it may violate one or more other laws.

It also should be noted that after the Joe Biden voice-cloning incident of 2024, states have been enacting statutes regulating the creation and distribution of voice clones. Even where a specific statute is not applicable, though, a broader statute (such as the FTC Act or a similar state law) might cover the situation.

Images and references in this blog post are for illustrative purposes only. No endorsement, sponsorship or affiliation with any person, organization, company, brand, product or service is intended, implied, or exists.

Joe Biden portrait
Official portrait of Vice President Joe Biden in his West Wing Office at the White House, Jan. 10, 2013. (Official White House Photo by David Lienemann)

 

Generative-AI as Unfair Trade Practice

While Congress and the courts grapple with generative-AI copyright issues, the FTC weighs in on the risks of unfair competition, monopolization, and consumer deception.

Federal Trade Commission headline as illustration for Thomas James article
FTC Press Release exceprt

While Congress and the courts are grappling with the copyright issues that AI has generated, the federal government’s primary consumer watchdog has made a rare entry into the the realm of copyright law. The Federal Trade Commission (FTC) has filed a Comment with the U.S. Copyright Office suggesting that generative-AI could be (or be used as) an unfair or deceptive trade practice. The Comment was filed in response to the Copyright Office’s request for comments as it prepares to begin rule-making on the subject of artificial intelligence (AI), particularly, generative-AI.

Monopolization

The FTC is responsible for enforcing the FTC Act, which broadly prohibits “unfair or deceptive” practices. The Act protects consumers from deceptive and unscrupulous business practices. It is also intended to promote fair and healthy competition in U.S. markets. The Supreme Court has held that all violations of the Sherman Act also violate the FTC Act.

So how does generative-AI raise monopolization concerns? The Comment suggests that incumbents in the generative-AI industry could engage in anti-competitive behavior to ensure continuing and exclusive control over the use of the technology. (More on that here.)

The agency cited the usual suspects: bundling, tying, exclusive or discriminatory dealing, mergers, acquisitions. Those kinds of concerns, of course, are common in any business sector. They are not unique to generative-AI. The FTC also described some things that are matters of special concern in the AI space, though.

Network effects

Because positive feedback loops improve the performance of generative-AI, it gets better as more people use it. This results in concentrated market power in incumbent generative-AI companies with diminishing possibilities for new entrants to the market. According to the FTC, “network effects can supercharge a company’s ability and incentive to engage in unfair methods of competition.”

Platform effects

As AI users come to be dependent on a particular incumbent generative-AI platform, the company that owns the platform could take steps to lock their customers into using their platform exclusively.

Copyrights and AI competition

The FTC Comment indicates that the agency is not only weighing the possibility that AI unfairly harms creators’ ability to compete. (The use of pirated or the misuse of copyrighted materials can be an unfair method of competition under Section 5 of the FTC Act.) It is also considering that generative-AI may deceive, or be used to deceive, consumers. Specifically, the FTC expressed a concern that “consumers may be deceived when authorship does not align with consumer expectations, such as when a consumer thinks a work has been created by a particular musician or other artist, but it has been generated by someone else using an AI tool.” (Comment, page 5.) Once again, generative-AI is a tool that is a perfect fit for the age of deception. 

In one of my favorite passages in the Comment, the FTC suggests that training AI on protected expression without consent, or selling output generated “in the style of” a particular writer or artist, may be an unfair method of competition, “especially when the copyright violation deceives consumers, exploits a creator’s reputation or diminishes the value of her existing or future works….” (Comment, pages 5 – 6).

Fair Use

The significance of the FTC’s injection of itself into the generative-AI copyright fray cannot be overstated. It is extremely likely that during their legislative and rule-making deliberations, both Congress and the Copyright Office are going to be focusing the lion’s share of their attention on the fair use doctrine. They are most likely going to try to allow generative-AI outfits to continue to infringe copyrights (It is already a multi-billion-dollar industry, after all, and with obvious potential political value), while at the same time imposing at least some kinds of limitations to preserve a few shards of the copyright system. Maybe they will devise a system of statutory licensing like they did when online streaming — and the widespread copyright infringement it facilitated– became a thing.

Whatever happens, the overarching question for Congress is going to be, “What kinds of copyright infringement should be considered “fair” use.

Copyright fair use normally is assessed using a four-prong test set out in the Copyright Act. Considerations about unfair competition arguably are subsumed within the fourth factor in that analysis – the effect the infringing use has on the market for the original work.

The other objective of the FTC Act – protecting consumers from deception — does not neatly fit into one of the four statutory factors for copyright fair use. I believe a good argument can be made that it should come within the coverage of the first prong of the four-factor test: the purpose and character of the use. The task for Congress and the Copyright Office, then, should be to determine which particular purposes and kinds of uses of generative-AI should be thought of as fair. There is no reason the Copyright Office should avoid considering Congress’s objectives, expressed in the FTC Act and other laws, when making that determination.

 

 

 

Generative-AI: The Top 12 Lawsuits

Artificial intelligence (“AI”) is generating more than content; it is generating lawsuits. Here is a brief chronology of what I believe are the most significant lawsuits that have been filed so far.

Artificial intelligence (“AI”) is generating more than content; it is generating lawsuits. Here is a brief chronology of what I believe are the most significant lawsuits that have been filed so far.

Most of these allege copyright infringement, but some make additional or other kinds of claims, such as trademark, privacy or publicity right violations, defamation, unfair competition, and breach of contract, among others. So far, the suits primarily target the developers and purveyors of generative AI chatbots and similar technology. They focus more on what I call “input” than on “output” copyright infringement. That is to say, they allege that copyright infringement is involved in the way particular AI tools are trained.

Thomson Reuters Enterprise Centre GmbH et al. v. ROSS Intelligence (May, 2020)

Thomson Reuters Enterprise Centre GmbH et al. v. ROSS Intelligence Inc., No. 20-cv-613 (D. Del. 2020)

Thomson Reuters alleges that ROSS Intelligence copied its Westlaw database without permission and used it to train a competing AI-driven legal research platform. In defense, ROSS has asserted that it only copied ideas and facts from the Westlaw database of legal research materials. (Facts and ideas are not protected by copyright.) ROSS also argues that its use of content in the Westlaw database is fair use.

One difference between this case and subsequent generative-AI copyright infringement cases is that the defendant in this case is alleged to have induced a third party with a Westlaw license to obtain allegedly proprietary content for the defendant after the defendant had been denied a license of its own. Other cases involve generative AI technologies that operate by scraping publicly available content.

The parties filed cross-motions for summary judgment. While those motions were pending, the U.S. Supreme Court issued its decision in Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. ___, 143 S. Ct. 1258 (2023). The parties have now filed supplemental briefs asserting competing arguments about whether and how the Court’s treatment of transformative use in that case should be interpreted and applied in this case. A decision on the motions is expected soon.

The court has now issued a fair use decision in Thomson Reuters v. ROSS Intelligence.

Doe 1 et al. v. GitHub et al. (November, 2022)

Doe 1 et al. v. GitHub, Inc. et al., No. 22-cv-06823 (N.D. Calif. November 3, 2022)

This is a class action lawsuit against GitHub, Microsoft, and OpenAI that was filed in November, 2022. It involves GitHub’s CoPilot, an AI-powered tool that suggests lines of programming code based on what a programmer has written. The complaint alleges that Copilot copies code from publicly available software repositories without complying with the terms of applicable open-source licenses. The complaint also alleges removal of copyright management information in violation of 17 U.S.C. § 1202, unfair competition, and other tort claims.

Andersen et al. v. Stability AI et al. (January 13, 2023)

Andersen et al. v. Stability AI et al., No. 23-cv-00201 (N.D. Calif. Jan. 13, 2023)

Artists Sarah Andersen, Kelly McKernan, and Karla Ortiz filed this class action lawsuit against generative-AI companies Stability AI, Midjourney, and DeviantArt on January 13, 2023. The lawsuit alleges that the defendants infringed their copyrights by using their artwork without permission to train AI-powered image generators to create allegedly infringing derivative works.  The lawsuit also alleges violations of 17 U.S.C. § 1202 and publicity rights, breach of contract, and unfair competition.

Read my case update on Andresen v. Stability AI. 

Getty Images v. Stability AI (February 3, 2023)

Getty Images v. Stability AI, No. 23-cv-00135-UNA (D. Del. February 23, 2023)

Getty Images has filed two lawsuits against Stability AI, one in the United Kingdom and one in the United States, each alleging both input and output copyright infringement. Getty Images owns the rights to millions of images. It is in the business of licensing rights to use copies of the images to others. The lawsuit also accuses Stability AI of falsifying, removing or altering copyright management information, trademark infringement, trademark dilution, unfair competition, and deceptive trade practices.

Stability AI has moved to dismiss the complaint filed in the U.S. for lack of jurisdiction.

Flora et al. v. Prisma Labs (February 15, 2023)

Flora et al. v. Prisma Labs, Inc., No. 23-cv-00680 (N.D. Calif. February 15, 2023)

Jack Flora and others filed a class action lawsuit against Prisma Labs for invasion of privacy. The complaint alleges, among other things, that the defendant’s Lensa app generates sexualized images from images of fully-clothed people, and that the company failed to notify users about the biometric data it collects and how it will be stored and/or destroyed, in violation of Illinois’s data privacy laws.

Young v. NeoCortext (April 3, 2023)

Young v. NeoCortext, Inc., 2023-cv-02496 (C.D. Calif. April 3, 2023)

This is a publicity rights case. NeoCortext’s Reface app allows users to paste images of their own faces over those of celebrities in photographs and videos. Kyland Young, a former cast member of the Big Brother reality television show, has sued NeoCortext for allegedly violating his publicity rights. The complaint alleges that NeoCortext has “commercially exploit[ed] his and thousands of other actors, musicians, athletes, celebrities, and other well-known individuals’ names, voices, photographs, or likenesses to sell paid subscriptions to its smartphone application, Reface, without their permission.”

NeoCortext has asserted a First Amendment defense, among others.

Walters v. Open AI (June 5, 2023)

Walters v. OpenAI, LLC, No. 2023-cv-03122 (N.D. Ga. July 14, 2023) (Complaint originally filed in Gwinnett County, Georgia Superior Court on June 5, 2023; subsequently removed to federal court)

This is a defamation action against OpenAI, the company responsible for ChatGPT. The lawsuit was brought by Mark Walters. He alleges that ChatGPT provided false and defamatory misinformation about him to journalist Fred Riehl in connection with a federal civil rights lawsuit against Washington Attorney General Bob Ferguson and members of his staff. ChatGPT allegedly stated that the lawsuit was one for fraud and embezzlement on the part of Mr. Walters. The complaint alleges that Mr. Walters was “neither a plaintiff nor a defendant in the lawsuit,” and “every statement of fact” pertaining to him in the summary of the federal lawsuit that ChatGPT prepared is false. A New York court recently addressed the questions of sanctions for attorneys who submit briefs containing citations to non-existent “precedents” that were entirely made up by ChatGPT. This is the first case to address tort liability for ChatGPT’s notorious creation of “hallucinatory facts.”

In July, 2023, Jeffery Battle filed a complaint against Microsoft in Maryland alleging that he, too, has been defamed as a result of AI-generated “hallucinatory facts.”

P.M. et al. v. OpenAI et al. (June 28, 2023)

P.M. et al. v. OpenAI LP et al., No. 2023-cv-03199 (N.D. Calif. June 28, 2023)

This lawsuit has been brought by underage individuals against OpenAI and Microsoft. The complaint alleges the defendants’ generative-AI products ChatGPT, Dall-E and Vall-E collect private and personally identifiable information from children without their knowledge or informed consent. The complaint sets out claims for alleged violations of the Electronic Communications Privacy Act; the Computer Fraud and Abuse Act; California’s Invasion of Privacy Act and unfair competition law; Illinois’s Biometric Information Privacy Act, Consumer Fraud and Deceptive Business Practices Act, and Consumer Fraud and Deceptive Business Practices Act; New York General Business Law § 349 (deceptive trade practices); and negligence, invasion of privacy, conversion, unjust enrichment, and breach of duty to warn.

Tremblay v. OpenAI (June 28, 2023)

Tremblay v. OpenAI, Inc., No. 23-cv-03223 (N.D. Calif. June 28, 2023)

Another copyright infringement lawsuit against OpenAI relating to its ChatGPT tool. In this one, authors allege that ChatGPT is trained on the text of books they and other proposed class members authored, and facilitates output copyright infringement. The complaint sets forth claims of copyright infringement, DMCA violations, and unfair competition.

Silverman et al. v. OpenAI (July 7, 2023)

Silverman et al. v. OpenAI, No. 23-cv-03416 (N.D. Calif. July 7, 2023)

Sarah Silverman (comedian/actress/writer) and others allege that OpenAI, by using copyright-protected works without permission to train ChatGPT, committed direct and vicarious copyright infringement, violated section 17 U.S.C. 1202(b), and their rights under unfair competition, negligence, and unjust enrichment law.

The judge has issued a ruling on fair use.

Kadrey et al. v. Meta Platforms (July 7, 2023)

Kadrey et al. v. Meta Platforms, No. 2023-cv-03417 (N.D. Calif. July 7, 2023)

The same kinds of allegations as are made in Silverman v. OpenAI, but this time against Meta Platforms, Inc.

There has been a ruling in Kadrey v. Meta Platforms. 

J.L. et al. v. Alphabet (July 11, 2023)

J.L. et al. v. Alphabet, Inc. et al. (N.D. Calif. July 11, 2023)

This is a lawsuit against Google and its owner Alphabet, Inc. for allegedly scraping and harvesting private and personal user information, copyright-protected works, and emails, without notice or consent. The complaint alleges claims for invasion of privacy, unfair competition, negligence, copyright infringement, and other causes of action.

On the Regulatory Front

The U.S. Copyright Office is examining the problems associated with registering copyrights in works that rely, in whole or in part, on artificial intelligence. The U.S. Federal Trade Commission (FTC) has suggested that generative-AI implicates “competition concerns.”. Lawmakers in the United States and the European Union are considering legislation to regulate AI in various ways.