Ep 92: AI in E-commerce – Navigating the Legal Maze

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AI has become a transformative force in the world of e-commerce, enabling businesses to streamline operations, improve customer experiences, and boost revenues. However, as AI takes center stage, it is important for business owners and decision makers to navigate the legal maze surrounding its implementation. In this article, we will explore the crucial considerations and regulations surrounding AI in e-commerce and how they impact businesses.

Ownership and Access to AI-generated Content:

The rise of AI has brought forward questions about the ownership and access to content generated by machines. Who should have the rights to this content, and how can businesses protect themselves from legal disputes? The episode discussed the complexities of copyright law and its application to content generated by AI. While copyright generally associates creations with human authors, the emergence of AI-generated content poses unique challenges.

Fair Use and Transformative Purposes:

Copyright law provides the right to control the copying of creative works, but fair use exceptions must be considered. In the episode, the host mentions the Taylor decision, a court ruling that refused to grant copyright protection to machine-generated art. Understanding fair use and its application in AI-generated content is crucial. Reproducing smaller amounts of content for parody purposes, for instance, may fall under fair use.

Unique and Ownable Content:

To protect AI-generated content under copyright, combining AI with additional creative processes can result in more unique and ownable content. The absence of uniqueness solely attributed to AI poses challenges for obtaining copyright protection. By adding human input or work to the final output, businesses can enhance the originality and distinctiveness of AI-generated content.

Legal Considerations for Website Content:

For e-commerce businesses, ensuring that their content is discoverable and influential is essential. Search engine indexing plays a vital role in expanding the reach of businesses and attracting customers. However, it raises the question of whether every individual or entity wants to be found. The episode discusses the significance of being indexed by search engines and how automated sources, powered by AI, gather publicly available content from websites.


As AI continues to shape the landscape of e-commerce, it is critical for business owners and decision makers to navigate the legal complexities surrounding its use. The episode provided insights into copyright considerations for AI-generated content and highlighted the importance of contract awareness in the e-commerce sector. By staying informed and taking proactive measures, businesses can harness the power of AI while safeguarding their interests and complying with legal regulations.

Topics Covered

A. AI and Ownership of Content
- Questions about who should own and have access to internet content
- Discussion on content ownership at Automatic (parent company of WooCommerce, WordPress, and Tumblr)
- Considerations for content scraping and copyright when using AI to generate content
B. Legal Regulations in AI
- Importance of legal regulations related to AI
- Discussion on legal issues in AI, specifically in the context of consumer credit
- AI technology developed by Leah Financial Technologies for assessing creditworthiness
- Implementation of AI technology with PNC Bank and other institutions
C. Copyright and Fair Use
- Explanation of copyright law and fair use
- Reference to the Taylor decision regarding machine-generated art and copyright
- Copyright generally associated with human creations
- Use of AI for transformative purposes and its relation to copyright and fair use
E. Unique and Ownable AI-Generated Content
- Challenge of uniqueness in solely AI-generated content
- Importance of combining AI with other creative processes for more unique and ownable content
- Mention of AI copyright battle involving Creativity Machine
F. Helping Content Creators and Store Owners
- Importance of helping content creators reach a wider audience
- Role of automated sources in gathering publicly available content
- Powering online stores and the desire for store owners to be found and influential
- Consideration of individuals who do not want to be found

Podcast Transcript

Jordan Wilson [00:00:17]:

When you create content on the internet, who should own it? Who should have access to it? we're gonna talk about that and a lot more and even just ecommerce and AI, in general, but I'm extremely excited for today's episode. As a former, journalists and as someone that's been producing content for 20 years and now that talks about AI every day, I think about this a lot. you know, should should we be protecting our content? Who owns it? you you know, we'll just bots be, creating content regurgitated ten times over. I don't know. So, my name's Jordan Wilson. Welcome to everyday AI. This is a daily live stream podcast. And we have a free daily newsletter helping everyday people understand and use AI. So today's topic is a big one. Just talking about different legal regulations when it comes to AI. we have a guest who is extremely qualified to talk about this. so we're we're excited about that.

But before we get started, as a reminder, if you are joining us live, number 1, thank let me know where are you joining us from? Where are you joining? I'd like to see this. You know, yesterday, I think we had people from, 1010 plus comp 10 plus countries chime in. And I'm asking that because our guest is joining us from the West Coast, bright and early, 5:30 AM. if you're on the podcast, don't worry. Check your show notes a lot of great resources there, and you can click and come join this conversation. We're gonna be talking about this in the comments on LinkedIn, but let's get started with some AI news.

Daily AI news

 So first story, there is a battle brewing, around Nvidia Chips and who gets access to them and who doesn't. We talked about this before on the show, but Nvidia Chips, their GPUs essentially power this generated AI movement. So a recent story is showing that now Nvidia must obtain the approval from the US government before exporting its highest-performing chips to certain buyers in the Middle East. The end goal, reportedly, is to stop these high-powered GPU chips that power generative AI from ending up in China. so kind of like a workaround. so looking at some of these countries in the Middle East. 

Next, ChatGPT competitor just launched in China. So we talked about this a couple months ago when it was first announced. but the ChatGPT Ernie Ernie Bot, is now available globally, and it can understand both Chinese and English. So this is from, 2 Chinese tech giants, they do and since time, and they essentially just launched their ChatGPT style bot to the public today, and it's, can allow users to do everything from summarize documents, get medical advice, create videos. You know, what you would normally expect or want out of an AI ChatGPT. And, of course, ChatGPT being blocked in China, this is kinda kinda big news because, you know, we kinda just talk about you know, a handful of large language models for the most part, ChatGPT, Google Bard, and Anthropic Cloud, Microsoft Bing Chat, but, you know, we might be talking a little bit Ernie Bot now in the future.

Last but not least, and a very relevant story for today. an AI copyright battle is getting messier. So, we've covered this on the show a couple of times, but now, the inventor of an AI image, an AI generating image, platform called Creativity Machine. He has lost a court case that essentially said he cannot copyright his images, but now, Steven Thaler is trying to prove that his bot is sentiment, and, it can have its own independent thought. Therefore, it cannot be copywritten. Messy. It's messy.

So speaking of legal messes, we have a great guest today. So as I bring him on, very excited to welcome to the show. Neil Perrets, the head of legal for WooCommerce joining us from the West Coast. Neil, thank you so much for joining us.

Neil Peretz [00:04:21]:

Glad to be here in the background. I'm rereading the recent, failure decision.

Jordan Wilson [00:04:27]:

Yeah. It's, gosh, we I I could just talk about that for probably an hour plus and all these different things. But, real real quick, Neil, you know, and if you're not sure, Neil serving as the head of legal for WooCommerce, parent company automatic. So if you use WordPress, I think we said what, Neil, WordPress powers like almost half of the entire Internet by now, right,

Neil Peretz [00:04:49]:

and WooCommerce actually powers, 23 plus percent of all the online stores.

Jordan Wilson [00:04:54]:

Wow. Wow. So, Neil has a great perspective, but real quick, Neil, just I mean, because aside from from your current role serving as has his legal for WooCommerce, You have a pretty extensive background in just building and growing AI companies. Talk a little bit, about that in in your experience.

Neil's experience with AI and legal

Neil Peretz [00:05:13]:

Sure. And to be clear, it's not all generative AI, which is probably worse. So the topic today, and that gets people excited. I think the AI that I worked on with the other companies is probably far less publicly accessible. Yeah. one company was is called the Leah Financial Technologies, and it was one of the first ones to use artificial intelligence, which we we called Machine Learning sort of a subcategory of AI, to underwrite credit for consumers. And the goal was, hey. Can we figure out a more precise method of determining who might actually be able to repay without blowing themselves up, and without missing payments, in the context of consumer credit, And if you if you could better assess this, you could offer credit to more people there because there are a lot of people out there hypothesis was that they're, not well represented, in terms of their reality by the data that might be going into the credit bureaus which then fed into FICO and, you know, people always ask, what's your FICO score? we came up with an Aliyah score that, proved to be much more accurate, and we would be we were often able to find people who were not well valued by FICO, but, based on our analysis, actually could and would repay, various forms of credit, and they needed credit. they were being turned down for it. And so we partnered with the among others, PNC Bank, and we put out

AI [00:06:42]:


Neil Peretz [00:06:43]:

of dollars in credit to people that, again, FICO would rate lower and these people had great performance, actually. so our algorithms did work, but of course, there was a lot of, A lot of data sources put in and a lot of tuning of our models. So I have to go around and meet with all the bank regulators and try to explain to them why they shouldn't be afraid that we're evolving basically AI in our in our credit and underwriting process because there are laws that try to protect against discrimination, for example, in providing credit. And they thought, well, AI, maybe there's all sorts of secret discrimination that goes on there. So on the public policy side, the interesting aspect of that role, was trying to get others in the regulatory, basically, community,

Jordan Wilson [00:07:33]:


Neil Peretz [00:07:33]:

could include regulatory folks working out the banks comfortable with the application of AI, which already was proving that it was yielding a better performance.

Jordan Wilson [00:07:41]:

Right. And and, you know, you bring up some interesting points that, you know, there's a big difference, I think, even between this kind of recent generative AI boom, and kind of the more more, quote unquote, traditional AI that a lot of us don't even know, but we've been probably benefiting from it for many decades. You know? But, I know a lot of even our audience, Neil, is is building generative AI products right now. Given given your backgrounds, kind of what was your biggest surprise in in building an AI company?

Using AI for legal business matters

Neil Peretz [00:08:15]:

So the the company I mentioned, a moment ago, Leah is a fintech company. I was not the co founder of the company. I was a senior executive at the company, but I didn't I didn't start it, and I wasn't really driving as much of the product efforts. I was more so on the legal side trying to figure out how do we make this all legally compliant? after Aliyah, I went and started a company called Contract Wrangler, and that I was the founder and the the CEO of the company for quite some time as well. and there, the goal was hey, can I use, you know, what we call AI generally in what we call specifically machine learning to read legal contracts and find all the key terms in those and alert people because what I noticed working in house as a lawyer was a lot of times people negotiate very heavily on a contract, And both sides chime in. You could spend weeks, maybe months fighting about various terms, and then we people are all done, what happens? The contract ends up like in a file cabinet or Dropbox or box or the afterdrive and that's it. They're out of the very way, and they're off to the next thing. And the reality of what happens when you sign a contract is, that's when the contract begins, not what it ends. Somehow, they thought the signing the contract was the end. We're all done. Those don't work to be done when it's the opposite of that. The contract is actually designed. So people will take on certain responsibilities and people have certain rights And if you don't know your rights or you forget about your responsibilities, you get in trouble. You know, a simple one that, comes up for many of us as consumers is auto renewals. hey, stuff reduced when you didn't want it to, you know, maybe you wanted to change. You think about some of the consumer services you might subscribe to cable TV, absol phone. If you just noted when something was going to end an auto renew and you called the provider and said, Hey. I noticed the terms coming up soon. I'm thinking about switching. Oh, we got a bargain for you. Right? You'll get better prices.

Jordan Wilson [00:10:15]:

Oh, that's the worst.

Neil Peretz [00:10:16]:

It's it's the worst. It's the simplest thing. So, but then the question is, okay, could I make a machine that goes and figures out to be some of these key terms and characteristics the contracts and then notifies the right person and says, hey, you have, we'll call it an opportunity or a responsibility here. because they get essentially, it was free money just by calling up and and acknowledging that there's a renewal coming up maybe and asking for a price change or getting other bids. And there's lots of other things you wanna go find a contract. interestingly, when you discuss contracts with non lawyers, they'll say to you, yeah, I get why contracts are important, but really only

AI [00:10:57]:


Neil Peretz [00:10:57]:

or 4 sections are important. and this is a widely held sentiment. The part where they differ is they all disagree on which of the 3 or 4 sections. because everyone's got their own categories that they're very interested in. If you talk to the IT guys, they'll say, oh, all that matters is the uptime requirement. Yeah. If you talk to the finance people, let's say, well, all that matters is, you know, when I get paid and, do I have any, sniff liabilities where I'm gonna indemnify someone else, or maybe the lawyers would go ask about that. What what what kind of warranty is included or not included with this kind of thing. and the salespeople wanna know, well, you know, when is it gonna renew? so I could call them up and sell them some more stuff. finance might wanna know which of our contracts allow us to raise the support price every year as prices go up as we're seeing now in an inflationary environment. So the goal was build a machine that can go figure all this out. and, auto renewals is a simple one for us to con us consumers to understand. We we actually do get indemnification of the clauses shoved in our consumer contracts, but the reality is we have less bargaining power to do something about it. Right.

AI content vs. legal battles

Jordan Wilson [00:12:05]:

Yeah. So so one thing, one thing I wanted to talk about, Neil, and and and I heard you say it there. So you said, you know, talking a little bit about your background and contract, but saying, you know, if you don't know, you said, if you don't know your rights and responsibilities, you're in trouble. and that got me thinking to where a lot of things are at currently. And this is this is a big topic, but I've gotta I've gotta pick your brain about it. So speaking of rights and responsibilities, you know, it's been in the news a lot. just the the the legal ongoing legal but legal battles over generative AI. So whether it's you know, the output from chat GPT images from companies like, you know, Mid Journey, DALL y, right, just what's what's your hot take? Like, what's what's gonna happen with with all these legal battles? I know we can't, you know, it's it's so much gray area, and it's probably gonna go on for a long time, but big picture, what's gonna go on in this fight over, you know, content created by these different AI systems?

Neil Peretz [00:13:11]:

Well, I think a lot of folks don't understand how they work. so that, drives them to certain assumptions that probably aren't true and those assumptions then, drive their their vision of who should pay who. they don't under leads with the generative AI models that are using transformers, they don't understand that, essentially, it's, a probability game. that that they're playing as to, hey, if I type X Many tokens or X Many, the words if I type X Many words, it's going to suggest here's what the next word should be.

Jordan Wilson [00:13:44]:


Neil Peretz [00:13:45]:

and actually images is kind of a variation of that where it's, you know, what what's the Pixelbee, if you will, to achieve a certain goal. you know, that's a probabilistic guess that they have on their part. obviously, the more they can understand of what proceeded the blank spot that they're supposed to fill in, you know, the better they'll do. If I said, you know, eating and you'd you'd fill out who knows what? cereal. if I gave you the phrase in advance, it was dinnertime, so he was eating. Well, then you wouldn't say cereal right. Oh, I

Jordan Wilson [00:14:17]:

would. Gosh. I small small tidbit. I eat cereal. I used to eat cereal probably about two to three times a week for dinner. So my my chatbot would be telling the truth on

Neil Peretz [00:14:27]:

Exactly. Right. So it actually gets to user generated content as well, right? Because, you know, if we trained on all your content, it would say serial afterwards. But odds are low, actually, that, you've searched at your neighbor's houses that that would be the main item on the table. So, you know, let let's imagine you wrote a great book about your life, and it was, you know, every page of the book you described, how you ate cereal for dinner. great. That content's out there. Imagine that that you know, work is put out on the internet in some publicly available manner, a GPT type engine, sucked it down, and it'll have, you know, one little data point that says one guy somewhere. you know, for him, we fill in the word serial when it come when when presented with the phrase, what people that asked what people ate for dinner. But, you know, if you went and grabbed the blogs of all of your neighbors, you'd get a far lower incidence of cereal coming out there. So it's gonna say statistically, what should I put out there? And statistics say, no, it's not serial.

Jordan Wilson [00:15:38]:

Yeah. That's a that's a good point. That's a good point. Statistically, I guess I'm I'm weird in that regard. Hey, as a reminder, if you're joining live, we have, Neil Perrets, the head of legal, for WooCommerce. so Neil, like we talked about at the top of the show, you know, the parent company, automatic, owns a lot of lot of different companies, but, you know, WordPress, Tumblr, you know, so so the parent company has so much ownership of just everything that's out there on the internet. And, again, I invite people if you have questions for Neil, please please get them in now so so we can throw them up. But how it just to me, I mean, should should, like, Is this something that you guys are talking about internally? Is this something that you wrestle with just ownership of content given, that, you know, automatic and WooCommerce and WordPress own, you know, own, quote, so much of the end content or, I guess, the users who are generating it on it, but Is this just a conversation that you guys are are tackling with internally and and where do you think this discussion will eventually land?

WooCommmerce's thoughts on AI content

Neil Peretz [00:16:42]:

Yeah. It's a conversation we have a lot internally in the legal team And then it's conversation, though, we have a lot externally, where there are content creators who speak with us. Our mission is to empower the content creators so in the case of wordpress.com, people have content up there that they're targeting in various manners. It could be through a blog that actually maybe is co branded by us because it's our one of our lower cost plans or could be something that we're just behind the scenes. And so if those folks want reach, which they usually do, that's why you're publishing publicly like that, then our our job is to help them get reach. and part of getting reach is actually being able to be consumed by machines of various you know, if we step back, just think about search engines. Right? Odds are high. If you want your content to be found, you would like to have your page indexed by a search engine. That leads it be more likely to be found by others, you know, seeking out information on, people with, I don't know, green sock fetishes or something like that if that's what your blog is about. So you would like to be indexed by search engine, and so we have various setups where, we try to facilitate people's content being consumable. And that includes being consumable via automated sources because people want that. And that historically has been how you, for example, end up being indexed on a search engine, the most likely way. we have had people query. Is there a way to shut that off And to some extent, we don't control that because these crawlers are now that think of them as scrapers that, go out and gather content they don't necessarily knock on the door and ask, and and say, Hey, WordPress, would you go invite me in? They're out there grabbing all of publicly available content. now if they get the content through some type of machine to machine feed, well, you know, it's a little bit easier, but really they're they're set up to go consume content, with what I I don't know if you have if you ever heard the phrase headless browser Yep. but that's essentially what they use. They're using a headless browser that by headless, it means that they're they're not actually looking at anything visually they're just saying give me the HTML code, and I'll I'll kinda decipher it myself. and it's a lot easier if you could suck down code, and you don't have to wait for it to render on your screen. so don't go around and do that. You know, suck down code, suck down code, suck down code, but to the person running the website, it just, yeah, sort of the browser showed up. Mhmm. You don't know what the end user sees or doesn't So if it's a headless browser, just something else showed up. Now there's there's clues, what types of browsers are out there, etcetera. And you can do other things to try to manipulate your site to foil the machines if you really wanted to. right. But generally, if you're a publisher and your goal was to put out make it publicly available. That's our job is to help you do that at atboardpress.com. And then, you know, similarly at at wu, we we power more stores than anyone else on the internet. not all of them are hosted by by automatic, by the way, because WU is open source software as well, but we we do run full commerce.com, and there are many, many stores that we host and people like folks to know that their store is out there and exists and and can be found. so they want to be an influencer. Correct. If you if you will. so generally, if people's job is to make themselves publicly available, we're there to facilitate that then they get this question of saying, what if people don't want to be found

Jordan Wilson [00:20:20]:

for some

Neil Peretz [00:20:20]:

reason by machines? They're okay with, you know, being on the public internet or, you know, if they're behind a a paywall of a sort where is exclusive access. We have options and we have tools to enable people to do that, ranging from the traditional, you know, you can buy a certain tier of access on my website too. Actually, the way even the web 3 options, like token gating. If folks wanna get all excited about web 3, we can say, fine. You totally get your website, because we have the biggest partnership ecosystem of really anyone who puts out either stores for WU or or websites or WordPress of other plugins you can get, some of which are many, many, many, many, which tens of thousands of which are available from third parties that work with us.

Jordan Wilson [00:21:01]:


Neil Peretz [00:21:02]:

so every which way you wanna slice and dice your website for access, yeah, it's available. Yeah. The WordPress and blue. Yeah. And That'll bring that would keep a script route potentially.

Who has rights to outputs of generative AI?

Jordan Wilson [00:21:12]:

Right. But you do bring up a very important, point because, you know, you mentioned, you know, even just like WordPress. Right? Like, I've used WordPress for, I don't know, 10 to 15 years. I love you know, but, you know, even WordPress right now, they they have their, I believe it's the Jetpack AI assistant, right, that helps you you know, generate AI, kind of AI content. And, you know, this goes to Andy's question here. Like, who in the end, or is there even an answer to this right now? If you use generative AI, whether it's the, you know, WordPress Jetpack assistant or chat GPT, who has rights to the output, Is there an answer?

Neil Peretz [00:21:50]:

Yeah. And and these questions are a good one. So part of what we started on the conversation of saying if I already have content, what do we do about, you know, it being scraped? and and what's what are some WordPress considerations on that? Andy's comment is then if I if I use I think this question is, if I use AI to generate some content, who owns that? Mhmm. which actually gets into the recent failure decision and other decisions about that, which is that generally, the courts have found that if you if I want to own something, one way to own this through copyright law, and, copyright basically gives you the right to, decide who gets to copy something. Now there are there are some exceptions to it, for fair use, where things could be copied against your permission, for certain circumstances, but know, generally, if you own the copyright, it's something you can control, how it's reproduced. So, the recent, Taylor decision was one in which someone had a said my machine came up with all this cool art by itself. And, the court said, well, you can't file a copyright on that. And generally, the our doctor in the United States is the copyright is something created by human.

Jordan Wilson [00:23:05]:


Recent example of AI copyright

Neil Peretz [00:23:05]:

So if it was created only by a machine without very much human input to guide it, what you're gonna find is you can't copyright it, and it's essentially kind of a public domain offering out there. if there was some substantial human input there, then you'd say, hey, it was kind of like you know, I I used the computer as a tool. And there was another recent, decision. I think this was on It was a recent copyright decision about a series of comic books that were had art in them, and there were some basic prompts that were given, and then the art pooped out. and the court decided, no, that, or I think it was maybe this the copyright office decided, now you can't get a a copyright on those because there wasn't really much human effort, to create it. Versus, let's say Photoshop. Right? Photoshop is using software as well, but there's a lot more guidance that the human provides. and stuff that comes out of your photoshop, yeah, you could still go go have a copy right on that. Now, you know, another type of ownership right you could have is trademark. with the trademark, it doesn't really matter where it was generated. It matters what use you put it to. So trade trademark is protecting something else. So I can have something completely computer generated no problem. If I file a trademark on it, I could own it in that setting, the class for which my trademark applies.

Jordan Wilson [00:24:27]:

Yeah. And it And it sounds like, you know, there's more gray area than not, right, because even as an example, if someone says, oh, I used, you know, a chat GPT or a generative AI tool to start this, but then I, as a human, continued because in theory, there's really not easy way to prove what, you know, I I I talk about, you know, these AI content detectors all the time that don't work. So so, I mean, is is is this just gonna always be something that always ends up in the legal system since there is no definitive way to say, oh, yes. This came from generative AI system versus this was human generated?

Neil Peretz [00:25:07]:

Probably if you wanna have your content be, impervious challenges, you'd keep track of the fact of your human effort that you put into it somehow, and then you got someone accuses you of saying data. The computer just did all that and you did nothing. And, who knows, maybe we'll end up with humans out there whose job is to add value by moving around some words.

Jordan Wilson [00:25:28]:

I think

Neil Peretz [00:25:28]:

I think that's a out of AI output.

Jordan Wilson [00:25:30]:

I think that's SEO, industry in general. Right? Yeah. You go in there and you you move around some words.

Neil Peretz [00:25:35]:

I add value. Right? And so that that'll get to the question of from the court of, well, how how much value did you add? What how much value do you need to add, to have it be a human work? or or is it just the the human part of it that is the copyrightable portion?

Jordan Wilson [00:25:49]:

Yeah. And, I'm gonna so we we have question here from, Sarhash. I'm gonna I'm gonna tweak it a little. He's kind of more asking if we create content using multiple blogs and provide with genuine references to the content Can we end up in legal issues? And, again, this show isn't legal advice, but I'm gonna tweak this a bit because I think it is an interesting question. should when people are publishing content, you know, Google has has recently, kind of released this synth ID that kind of watermarks you know, images, but should publishing companies or even individuals if they are using kind of copy verbatim from a generative AI Should they be saying so? I mean, what's what's kinda your your your thoughts on that?

Neil Peretz [00:26:33]:

Well, there's a few different questions built in there. So one is, generally, if it's someone else's work and I reproduced part of it, you know, regardless whether it's AI generated or not,

Jordan Wilson [00:26:45]:


Neil Peretz [00:26:45]:

that okay? and the answer is, well, of course, this is I'm a lawyer, so I'd have to say it depends. Of course. so, it depends on the context of which you reproducing it. But, generally, there's this idea that you could go reproduce or manipulate copyrighted works of others for certain purpose and that's considered the the term is fair use, at least in US jurisprudence. so, a famous case in this regard is is involve Google books pursued by the author's Guild.

Jordan Wilson [00:27:15]:

Mhmm. And,

Neil Peretz [00:27:15]:

of course, if you go to Google books, there's a lot a lot of books in there. And the way they got all books in there is they went grabbed all books and scan them all in. and one would assuredly think, yes, the books are copyrighted. Yeah. They're they're published books that you pay body for. And in the end, the court said, well, it's okay. despite the fact that they're reproducing all these books because a, you're only reproducing a snippet of the book. and b, you're actually adding new value, which is you've now rendered the whole book searchable and findable by those in the internet.

Jordan Wilson [00:27:52]:


Neil Peretz [00:27:52]:

That's good. That's an added value. You've, essentially provide a transformative use your your use of it isn't just, oh, I can read the whole book because you can't. your use of it is now, content finding engine. and that really does add a lot of value for, you know, consumers of books. so in that context, yeah, they can copy entire books, but they how they deployed it a transformative use. It could be, you know, other transformative uses could be, you know, parody of a sort. Right? Mhmm. It's hard to make a parody if you can't reproduce what you're or at least a subset of what you're paradeying, so we wouldn't have parity. If you could say, no, you can't mention me. How do you make a joke about something you can't mention? this is another example. So, smaller amounts of content, content you're talking about, Sure. You could probably reproduce that there's probably, a fair use argument to be made. Of course, the the the specifics matter, you can either go check with a lawyer or at least just do some reading about fair use and what are the components of fair use so you could think about that for your content. Yeah. And so that that that was, you know, generally, the case with, you know, using other people's content, I Was there a subset of AI question about that, though?

Best practices for using generative AI legally

Jordan Wilson [00:29:09]:

Yeah. you know, real real quick here just as we as we kind of wrap up because we've, you know, we've been top to bottom here. We've we've talked to your background. We've talked, you know, some of the AI ai powered companies that you've built. we've talked about general copyright, but, I'm gonna do this, you know, because everyone's always looking for free legal advice. I'm not gonna you know, have you have you give free legal advice, but, what is your stance if someone is wondering should I be using generative AI, to to produce content on the internet? What is kind of some some general guidance and best practices or recommendations that you might give to people so they can still be creative and put great content out for others to consume, but using generative AI tools, but it's still kind of, you know, not have to tiptoe that, could I get sued line? What's what's the best practice or recommendation

Neil Peretz [00:30:07]:

and and actually this dovetails with the second part of the of Sahar's question, which was he said, you know, should I should I note something you know, that, it was some of the content might be AI generated out there. And I'll say that that is the preferred approach, at least for professional companies creating content, There are certain laws that are now starting to say, if it's AI generated, you should go say so. and and essentially give people a warning. And that actually to some extent could protect you because, I I don't know. You probably had it on prior episodes. Hey. I isn't always correct. Yeah.

Jordan Wilson [00:30:43]:

It lies.

Neil Peretz [00:30:44]:

It makes stuff up. Yeah. Completely. I've had it. I've experienced it myself as a lawyer. Right? how to suggest things that don't exist, laws that don't exist, cases that don't exist. Oh, yeah. Yeah. So so if you put in the warning that it's generated by AI and especially if it's not that fact checked by you, yeah, that's probably a good thing for you to go put on there. Yeah. So, you know, that gets the question of how do I use AI? So number 1 is, yeah, you might wanna tell people when and where you used AI. Alternatively, you need a human workflow behind the scenes that verifies things.

Jordan Wilson [00:31:17]:


Neil Peretz [00:31:18]:

if if there's any type of factual assertion, for example, you'd wanna go verify it. Otherwise, people will assume you said it. and you'll be held responsible for the misstatements of something that the AI came up with. so that's part of it for using content. otherwise, I I think you could assume that, you probably can't get a copyright if AI generated a whole cloth So if you wanna get a copyright and you did part of the work, you'd wanna go keep track of that and document it, for yourself. And the challenge of this is we talked about probabilities and what the machine comes up with. the machine can come up with the same result for many of the people. If I have a magic machine that makes images, there's not a guarantee that's not gonna make the same image for everyone else. So I don't even necessarily even have a lot of uniqueness when I rely solely on that. and some people really want that. They want something that is uniquely theirs to to go protect. So you kind of integrate the AI with your other creative process, then maybe you'll have something more unique, more ownable, would be the way to go.

Jordan Wilson [00:32:24]:

Neil, you've you've helped walk us through, everything from, you know, your background to how to safely create content. tackled some questions. Can't thank you enough for taking time out of your busy day and early day to join the show. So thank you. Thank you again so much for joining us.

Neil Peretz [00:32:44]:

It's fun. Thanks, Jordan. There's a lot more to talk about in any one of those, topics there.

Jordan Wilson [00:32:48]:

I oh gosh. I know we could go hours. Right? So, hey, if you're listening on the podcast, check the show notes. If you're joining live, make sure to check out our daily newsletter that we put each day. Neil just dished a lot of information. We're gonna recap it all in the newsletter. So make sure to go to your everyday ai.com. Sign up for that. Neil, thank you again for joining us, and we hope to see everyone back again for another episode of everyday AI. Thanks, y'all. Thanks,

Neil Peretz [00:33:13]:

Jordan. Love the newsletter. Thanks.

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