Ipr In Valuation Of AI-Generated Art Assets.
1. Introduction to IPR in AI-Generated Art
Artificial Intelligence (AI) can now generate paintings, music, designs, and literary works. The legal question arises: Who owns the copyright? This has a direct impact on the valuation of AI-generated art, because intellectual property rights often determine market value.
Key points:
Traditional copyright law protects human authorship, not machines.
Ownership affects licensing, resale, and commercial exploitation of AI-generated art.
Several jurisdictions are debating whether AI-generated works should receive copyright protection and if so, who holds it (developer, user, or AI itself).
2. Case Laws and Legal Principles
Case 1: Naruto v. Slater (Monkey Selfie, 2018, U.S.)
Facts: Photographer David Slater’s camera was used by a monkey, Naruto, to take selfies. Naruto claimed copyright.
Court Ruling: The U.S. courts ruled that animals cannot hold copyright; copyright is reserved for humans.
Implication for AI Art:
AI is like “non-human authorship” in this context. AI-generated works, without human creative input, may not be eligible for copyright.
Valuation of purely AI-generated art may be lower because no one can claim exclusive ownership.
Case 2: Thaler v. Commissioner of Patents (DABUS AI, 2021–2022, Australia & UK)
Facts: Dr. Stephen Thaler listed an AI system (DABUS) as the inventor for patent applications.
Ruling:
Australia initially allowed patents listing AI as inventor (for certain cases).
UK and US rejected it, stating inventor must be human.
Implication for AI Art:
Patent law reasoning aligns with copyright—AI cannot be an inventor/author.
Human intervention is needed for AI-generated art to have IPR protection, which in turn influences its market valuation.
Case 3: Feist Publications, Inc. v. Rural Telephone Service Co. (1991, U.S.)
Facts: Rural Telephone argued their phone directory was protected under copyright. Feist published a directory with similar listings.
Ruling: Supreme Court held copyright requires originality, not just effort.
Implication for AI Art:
If an AI generates art without creative human input, it may fail the originality requirement, making it uncopyrightable.
Valuation depends heavily on the human creative contribution, not the AI output alone.
Case 4: Monkey Selfie & Human Contribution in Europe (EUIPO Guidelines)
Facts: EU Intellectual Property Office (EUIPO) emphasized that AI cannot be an author; only human creativity counts.
Implication:
To value AI-generated art, we assess the extent of human involvement in directing, modifying, or curating AI output.
Purely AI-generated works without human direction might have no IP value, lowering market price.
Case 5: Thaler v. Commissioner of Patents (U.S. Appeal, 2022)
Facts: Thaler attempted to patent AI-generated inventions in the US.
Ruling: US courts rejected the patent application, stating AI cannot be inventor under the U.S. Patent Act.
Implication:
Reinforces the notion that AI alone cannot own IP rights, affecting valuation models.
Market tends to favor AI-assisted art where humans can claim authorship.
Case 6: Warhol Foundation v. Goldsmith (2021, U.S.)
Facts: Andy Warhol used a photograph of Prince to create a series of artworks. Photographer Goldsmith claimed infringement.
Ruling: Court emphasized transformation and creativity, but recognized underlying copyright.
Implication for AI Art:
If AI transforms an existing copyrighted work, valuation must account for risk of infringement.
Market value can be diminished if the AI art is derivative without proper licensing.
Case 7: Thaler v. Commissioner of Patents (UK, 2022)
Facts: Same as above but in UK.
Ruling: AI cannot be listed as inventor; patents must have a human inventor.
Implication for valuation:
Human attribution in AI-generated works is crucial for legal enforceability, which directly impacts their monetary value.
3. Summary Table of Legal Implications for Valuation
| Case | Key Principle | Impact on AI Art Valuation |
|---|---|---|
| Naruto v. Slater | Non-human cannot hold copyright | Pure AI art may have little legal value |
| DABUS (AU/UK/US) | Inventor/author must be human | Human input increases IP and market value |
| Feist v. Rural | Originality required | Only creative AI-human collaborations may be valuable |
| Warhol v. Goldsmith | Transformation vs. derivative work | Risk of infringement affects pricing/licensing |
| EUIPO Guidelines | AI output not automatically copyrighted | Human involvement is crucial for valuation |
4. Key Takeaways for Valuation
Ownership Matters: Only works attributed to humans have enforceable IP rights, which increases market value.
Human Contribution: The more creative direction a human provides, the higher the potential valuation.
Derivative Risk: AI-generated art based on existing works carries licensing or infringement risk, reducing its value.
Jurisdictional Differences: Australia, US, EU, and UK treat AI-generated works differently, affecting international valuation strategies.
Licensing Models: Where AI art cannot be copyrighted, NFT or open-license models may be used, but legal enforceability is weaker.
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