38 ASIAN LEGAL BUSINESS – APRIL 2024 WWW.LEGALBUSINESSONLINE.COM CHINA The Beijing Internet Court issued a landmark judgment in November 2023 concerning “images generated by AI text,” addressing the copyright issue of works produced by Gen AI. The case was initiated by the plaintiff, Li, who used AI to create images and shared them on the social media platform Xiaohongshu. Subsequently, the defendant, a blogger on Baijiahao, used these images in their articles without Li’s permission, leading to the lawsuit. The court determined that the AI-generated images possessed the “originality” required for copyright protection, highlighting the human intellectual effort involved in their creation. It emphasized that using AI models to generate images is essentially utilizing tools in the creative process, with the intellectual contribution coming from humans, not the AI, thus warranting copyright protection. It is worth noting that “the thinking of this judgment is significantly different from the views of the U.S. Copyright Office and the US courts,” says Long. The second is the “Ultraman” case, ruled on by the Guangzhou Internet Court in February 2024, tackled the use of Gen AI for training materials. The defendant, an AI company, runs the Tab website offering AI-generated painting services. The plaintiff, holding the exclusive copyright license for the Ultraman series images, noticed that the Tab website could produce images featuring Ultraman. The court determined that Gen AI service providers are expected to demonstrate reasonable care in their offerings. In this situation, the defendant did not establish a complaint mechanism, failed to caution users against copyright infringement through service agreements or other methods, and did not adequately label the images generated. Consequently, the defendant did not meet its duty of care and was found to be at fault. “This verdict has sparked another wave of intense debate on copyright concerns within the AI sector,” notes Long. He Wei has also noticed these two cases. He points out that given that Gen AI-related legislation still takes time, “in the short term, we may see courts in various regions make breakthroughs by issuing precedent-setting judgments, and there will be situations where different courts come to ‘conflicting conclusions’.” According to He, the advantage of using judgments to respond to cuttingedge Gen AI issues is that “an individual case can be judged based solely on the circumstances of that case without having to carry too much ‘baggage’. Thus, there is greater flexibility. Since China is not a common law country, different courts can discuss relative issues in the form of judgments, and these different opinions can then be escalated into judicial interpretations, administrative regulations and even laws. This is the appropriate approach to transit from judicial response to legislation when dealing with emerging IP issues.” OVERSEAS EXPERIENCE In the field of Gen AI, since all jurisdictions are on the same starting line at the legislative and judicial levels, lawyers point out that close attention should be paid to relevant developments in other jurisdictions to draw valuable regulatory ideas. He Wei shares relevant progress in the United States. “On August 30 last year, the U.S. Copyright Office began public consultation on a series of issues in the intersection of copyright law and AI, including core issues such as the copyrights of AI model training materials, the degree of transparency and disclosure of the use of copyright works, and the copyrightability of Gen AI output content.” Meanwhile, Long has noted the Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence issued by the U.S. last October, “which mainly requires different government agencies to formulate more concrete plans for the use of AI within their respective authority. This Executive Order emphasizes innovation and competition, aims to promote the development of the AI industry, and advocates relatively prudent and loose AI regulation”. In the European Union, Long says that the Artificial Intelligence Act was passed in 2023, “which aims to introduce a common regulatory and legal framework for AI. According to the risk of the harm that AI applications may cause, the AI Act classifies AI applications into three main categories for regulation: prohibited conduct, high-risk systems and other AI systems. Certain specific AI practices that threaten people’s safety, livelihoods and rights are deemed to have unacceptable levels of risk and are prohibited; for high-risk AI, the AI Act imposes registration, risk assessment, human supervision and other obligations; for limited-risk AI, relevant players must fulfill certain transparency obligations.” “It can be seen that the EU has adopted a risk-based AI governance framework and tiered regulatory approach, while the US has opted for soft regulation and governance-driven development. This is worthy of reference for China’s AI regulation with the goal of ultimately achieving the balance between development and security,” says Long. He Wei also highlights the divergent approaches to Gen AI regulation between the EU and the US, noting, “The EU prioritizes risk prevention for the public good, whereas the US emphasizes delineating and safeguarding private rights. This reflects the state of AI development in each region. In the US, “Given the swift evolution of AI technology, tech companies have stringent criteria or elevated expectations regarding the patent application and commercialization timelines in the AI domain. Thus, the urgency of patent-related activities in AI technology is a crucial concern for tech firms.” — David Liu, Chang Tsi & Partners