The use of artificial intelligence (AI) is becoming more common across all sectors of the economy, from education to software development and to professional services. The utility of AI continues to increase with corresponding advances in computing technology and the availability of training data sets.
With generative AI technologies, such as ChatGPT and Midjourney, being widely accessible to the public, it is worth considering how these technologies and the works they produce fit within current legal frameworks, particularly in relation to intellectual property (IP).
Most forms of IP generally need some level of human input and novelty to qualify for legal protection. The rapid advances made in AI technology will require IP laws to adapt to the new paradigm and tensions within the current legal framework can already be felt.
In this edition, we explore AI technology, its impact on IP law, in particular to copyright and patents, and its relevance to government.
AI is generally accepted to refer to the discipline of computer science aimed at creating systems that were traditionally considered to require human intuition. More recent AI technologies are able to mimic human cognition and perform tasks including voice, text and image creation and recognition. Generative AI technologies have advanced to the point where their output can be difficult to distinguish from that of humans. For example, ChatGPT was able to pass the bar exam at the Minnesota University Law School.
AI systems are also developing the ability to demonstrate ingenuity in various fields, with corporate research firm Gartner predicting that more than 30 per cent of new drugs and materials will be created using generative AI by 2025.
Copyright is a bundle of rights held by the creators of works and other forms of content which generally prevents the reproduction or communication of the work without the owner’s consent. For literary, dramatic, musical or artistic works, copyright will only subsist where originality requirements are met. In the High Court case IceTV Pty Ltd v Nine Network Ltd (2009) 239 CLR 458, it was found that an author of a work must have exercised real control over the form or expression, meaning some independent intellectual effort is necessary. For example, source code automatically generated by a computer program has been found to lack the requisite originality (Acohs Pty Ltd v Ucorp Pty Ltd (2012) 201 FCR 173).
In Telstra Corporation Ltd v Phone Directories Company Pty Ltd (2010) 194 FCR 142, the Full Federal Court found that computer-generated telephone directories lacked the necessary human input. The Full Federal Court found that even though the software used to create the phone directories required human input, the employees involved in creating the directories merely controlled an automated process and did not direct the material form of the directories themselves.
Internationally, in 2022 the United States Copyright Review Board affirmed an earlier decision of the Copyright Office that an AI-generated artwork created without any meaningful human input lacked the human expression needed for protection under US copyright law. In contrast, UK copyright legislation explicitly protects works generated by a computer where there is no human author (see section 178 of the Copyright, Designs and Patents Act 1988 (UK)).
Although there has yet to be any judicial consideration in Australia of whether works created by generative AI systems can satisfy originality requirements, such works will likely lack the required degree of human ingenuity needed for copyright protection under copyright law. However, it is likely that legislative reform will be needed in future as generative AI becomes increasingly commonplace.
Patents are a form of registered IP that protects innovations and inventions for a limited period of time. A patent will only be registered if it meets the threshold level of novelty and it involves an ‘inventive step’.
It is also a requirement, under Patents Regulation 1991 (Cth) r 3.2C(2)(aa), that an inventor is named in the patent application. Recent case law has reaffirmed the Australian position that an inventor must be a natural person. In Thaler v Commissioner of Patents  FCA 879, it was found by Justice Beach that an AI system could be an inventor for the purposes of the Patents Act 1990 (Cth). Justice Beach noted that the Act does not define the term ‘inventor’ nor explicitly prohibits an AI system from being named as an inventor.
On appeal, it was found unanimously by the Full Federal Court that the grant of a patent requires an invention arising from the mind of a natural person. Accordingly, the Deputy Commissioner was correct in rejecting Dr Thaler’s application. The Full Court noted that Dr Thaler likely intended to provoke debate about the patentability of inventions created by AI, but that it would not be appropriate for the Court to consider such a change in policy under current legislation. Dr Thaler’s application for special leave to appeal the Full Federal Court’s decision to the High Court was refused and the Full Federal Court’s decision remains good law in Australia.
The Commonwealth Government has identified AI as a critical technology in the national interest and created a National Artificial Intelligence Centre which is responsible for the ‘Responsible AI Network’. Australia is also a member of the Global Partnership on Artificial Intelligence. The NSW Government has publicly embraced the use of AI in government and has created a NSW AI Advisory Committee, AI Policy and Assurance Framework and an Artificial Intelligence Strategy.
Australian governments have clearly considered the applications of AI technology and its potential uses in delivering services, storing public data and in assisting innovation within industry. It is prudent for government bodies to consider the application of IP law to AI technology and its public sector use cases. For example, the NSW Government has identified that AI may be used in procurement and in proofs of concept. Government agencies should be aware that such AI-generated outputs may be insufficiently protected by IP law and that policy or legislative developments in this space should be monitored.
AAT Bulletin Issue No.7/2023
The AAT Bulletin is a fortnightly publication containing information about recently published decisions and appeals against decisions in the AAT’s General, Freedom of Information, National Disability Insurance Scheme, Security, Small Business Taxation, Taxation & Commercial and Veterans’ Appeals Divisions (11 April 2023). Read more here.
NSW government delays budget after uncovering $7.1bn in fresh ‘financial pressures’
The Minns government says it has uncovered more than $7.1bn in fresh “financial pressures” since taking office last month, and will delay in the New South Wales budget three months until September while it conducts a “line-by-line “spending review (17 April 2023). Read more here.
NSW reconstruction authority regulation
The NSW Reconstruction Authority is inviting public submissions on the Regulatory Impact Statement for the NSW Reconstruction Authority Regulation 2023. Responses are invited until 15 May 2023. Read more here.
Shah Friends Pty Ltd v Cumberland Council  NSWLEC 31
APPEAL – Council issues Stop Use Order to applicant requiring cessation of use of premises as a waste or resource transfer station – applicant appeals against imposition of the order – existing development consent for use of the premises as a foundry – applicant contends that its use of the premises for recovery of metal and other materials falls within the use permitted by the foundry development consent – commissioner upholds Council's characterisation as a waste or resource transfer station – commissioner rejects Applicant's characterisation of its use – commissioner dismisses the appeal against the order, modifying its terms and ordering cessation of the Applicant's use within 28 days ‑ applicant commences appeal pursuant to s 56A of the Land and Environment Court Act 1979 – appeal based on five grounds said to reflect errors of law by the Commissioner – operation of Stop Use Order stayed until determination of the Applicant's appeal ‑ at hearing of the appeal, the Applicant abandons three of the five grounds originally pleaded but seeks leave to add an additional ground asserting a further error of law on behalf of the Commissioner – leave to rely on proposed added ground not opposed by the Council – leave granted – ground 1 alleges commissioner wrongly construed 1979 development consent on too narrow a basis – commissioner committed no error in construing 1979 development consent – ground 1 fails – new Ground 1A alleges inaccurate delineation of geographic scope of Stop Use Order renders it invalid ‑ scope of Stop Use Order can only apply to premises lawfully occupied by the Applicant – ground 1A fails – grounds 2, 3 and 4 not pressed – ground 5 pleads that the material processed by the applicant was not waste – the basis of this ground not raised before the Commissioner in the fashion advanced on appeal – Council did not oppose determination of the ground – material processed by the Applicant on the site not waste – ground 5 established – appeal upheld – Stop Use Order set aside.
COSTS – presumption costs follow the event in s 56A appeals – ability to depart from presumption in appropriate circumstances – appropriate to depart from presumption as Applicant successful on basis not argued before the Commissioner – no order for costs of the appeal unless some different costs order sought within 14 days of decision – if different costs order sought, determination to be on written submissions.
Civil Procedure Act 2005; Cumberland Local Environmental Plan 2021; Environmental Planning and Assessment Act 1979; Environmental Planning and Assessment Regulation 2000; Environmental Planning and Assessment Regulation 2021; Land and Environment Court 1979; State Environmental Planning Policy (infrastructure) 2008 and State Environmental Planning Policy (Transport and Infrastructure) 2021.
Sioud v Canterbury-Bankstown Council  NSWLEC 1171
APPEAL – development application – four-storey mixed use development comprising a boarding house and commercial tenancy with basement parking – whether the design of the development is compatible with the character of the local area – cl 30A of State Environmental Planning Policy (Affordable Rental Housing) 2009 – whether the roof element is an “architectural roof feature” for the purposes of cl 5.6 of the Bankstown Local Environmental Plan 2015 (LEP) – variation of the building height standard under cl 4.6 of the LEP – waste management – parking.
Bankstown Local Environment Plan 2015; Environmental Planning and Assessment Act 1979; Environmental Planning and Assessment Regulation 2000; State Environmental Planning Policy (Affordable Rental Housing) 2009; State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004; State Environmental Planning Policy (Housing) 2021; State Environmental Planning Policy (Resilience and Hazards) 2021 and State Environmental Planning Policy (Transport and Infrastructure) 2021.
Bailey v Commissioner of Police, NSW Police Force  NSWCATAP 1013
ADMINISTRATIVE LAW – freedom of information – government information public access – public interest considerations – failure to make findings as to whether there were any public interest considerations in favour of disclosure and the weight to be given to them – whether reasons were inadequate.
Civil and Administrative Tribunal Act 2013 (NSW).
Regulations and other miscellaneous instruments
Education and Care Services National Amendment Regulations 2023 – published LW 14 April 2023
Environmental Planning Instruments
Bega Valley Local Environmental Plan 2013 (Map Amendment No 4) – published LW 14 April 2023
Central Darling Local Environmental Plan 2012 (Map Amendment No 1) – published LW 14 April 2023
Cessnock Local Environmental Plan 2011 (Map Amendment No 6) – published LW 14 April 2023
Clarence Valley Local Environmental Plan 2011 (Map Amendment No 5) – published LW 14 April 2023
Coolamon Local Environmental Plan 2011 (Map Amendment No 1) – published LW 14 April 2023
Corowa Local Environmental Plan 2012 (Map Amendment No 1) – published LW 14 April 2023
Gloucester Local Environmental Plan 2010 (Map Amendment No 2) – published LW 14 April 2023
Hunters Hill Local Environmental Plan 2012 (Map Amendment No 1) – published LW 14 April 2023
Ku-ring-gai Local Environmental Plan 2015 (Map Amendment No 4) – published LW 14 April 2023
Kyogle Local Environmental Plan 2012 (Map Amendment No 1) – published LW 14 April 2023
Lane Cove Local Environmental Plan 2009 (Map Amendment No 1) – published LW 14 April 2023
Liverpool Plains Local Environmental Plan 2011 (Map Amendment No 1) – published LW 14 April 2023
Manly Local Environmental Plan 2013 (Map Amendment No 2) – published LW 14 April 2023
Pittwater Local Environmental Plan 2014 (Map Amendment No 3) – published LW 14 April 2023
Queanbeyan-Palerang Regional Local Environmental Plan 2022 (Map Amendment No 1) – published LW 14 April 2023
Strathfield Local Environmental Plan 2012 (Map Amendment No 1) – published LW 14 April 2023
Upper Lachlan Local Environmental Plan 2010 (Map Amendment No 2) – published LW 14 April 2023
Wagga Wagga Local Environmental Plan 2010 (Map Amendment No 11) – published LW 14 April 2023
Wagga Wagga Local Environmental Plan 2010 (Map Amendment No 12) – published LW 14 April 2023
Walcha Local Environmental Plan 2012 (Map Amendment No 1) – published LW 14 April 2023
Wingecarribee Local Environmental Plan 2010 (Map Amendment No 6) – published LW 14 April 2023
Woollahra Local Environmental Plan 2014 (Map Amendment No 2) – published LW 14 April 2023
Great Lakes Local Environmental Plan 2014 (Map Amendment No 4) – published LW 6 April 2023
Port Macquarie-Hastings Local Environmental Plan 2011 (Map Amendment No 4) – published LW 6 April 2023
Carbon Credits (Carbon Farming Initiative) Act 2011 18/04/2023 – Act No. 101 of 2011 as amended
Social Security Act 1991 17/04/2023 – Act No, 46 of 1991 as amended
Telstra Corporation and Other Legislation Amendment Act 2021 14/04/2023 – Act No. 140 of 2021 as amended
Clean Energy (Consequential Amendments) Act 2011 13/04/2023 – Act No. 132 of 2011 as amended
Freedom of Information Act 1982 13/04/2023 – Act No. 3 of 1982 as amended
Bills assented to
Workplace Gender Equality Amendment (Closing the Gender pay Gap) Bill 2023 11 April 2023
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.