Australian Court: AI Training Licenses Must Be Contractually Explicit

• AI has evolved from a 'talking point' to a live contractual issue in Australia.
• Clients are demanding that contracts explicitly address how their IP will be utilized for training AI models.
• The lack of a standalone right of publicity means protection is built through contractual agreements.
• Valuation of training licenses is becoming an increasingly important concern for clients.

"There's no one straight answer, and the speed of AI's impact on culture and the economy is accelerating fast. Part of our job is to stay in the conversation, understand what our clients stand to benefit or lose from it, and help them navigate it." - Julian Hewitt

The entertainment law boutique Hewitt Glass, co-founded by Julian Hewitt and Rob Glass, has witnessed the evolution of AI from a 'talking point' to a live contractual issue. Over the past decade, they have worked with clients in the entertainment industry, watching as AI's impact on copyright protection in Australia became increasingly relevant. Today, clients are demanding that contracts explicitly address how their intellectual property (IP) will be utilized, particularly for training AI models. This shift has made it essential for contracts to be tight and comprehensive, especially given the 'patchiness' of Australian law regarding copyright protection as it relates to AI.

The lack of a standalone right of publicity in Australia means that protection is built through contractual agreements. As a result, clients are seeking contractual teeth in agreements to ensure multinational entertainment companies cannot train their IP on AI models without consent. The legislation is patchy, and the current shield against potential compliance exposures lies in ensuring contracts address the issue. This has become a critical concern for lawyers advising clients in the entertainment industry, as they must navigate the complex landscape of AI-related contractual obligations.

The impact of AI on copyright protection in Australia is not just a legal concern but also an economic one. The valuation of training licenses has become a hot topic, with clients seeking to understand whether these licenses can generate genuine income streams. As the entertainment industry continues to evolve, it is essential for creatives and lawyers alike to stay ahead of the curve and navigate the opportunities and challenges presented by AI-generated narrative films and other AI-related innovations.

Lawyers advising clients on the entertainment industry should ensure contracts address AI-related issues, particularly regarding IP protection and consent, to avoid potential compliance exposures.

Source: Original reporting via Australasian Lawyer