Congress Seeks to Pass Bipartisan Bill: No AI FRAUD Act

The new year kicks off with a No AI FRAUD Act, a Congressional bipartisan effort for federal legislation to help protect individuals from the abuse and dangers created by personalized generative AI platforms and services. The bill aims to provide a framework to recognize and protect the rights of individuals to their personal likeness and voice against AI-generated fakes and unauthorized use.

No AI Fake Replicas and Unauthorized Duplications (FRAUD) Act

Artificial Intelligence models and the extent of use by the public will continue to grow as AI can provide a wealth of assistance in many areas. However, the use of AI by bad actors is also rising at an exponential rate. State laws are either non-existent, inconsistent, or not sufficient to truly address the issue that individuals (not just celebrities) face with unauthorized use of their likeness.

The No AI FRAUD bill seeks to recognize intellectual property rights to a person’s own likeness and voice for the purpose of protecting individuals from those who would use AI to clone or impersonate for any unauthorized reason, including for harassment, abuse, fraud, etc. The act provides that this IP right in one’s own likeness and voice is transferable and descendible, in whole or part, and extends for 10 years from the death of the individual (with some termination and validity of use terms).

There have been many news headlines of AI-generated fake content that has disrupted the personal lives and rights of minors and high school students to well-known artists. The No AI FRAUD Act would create an avenue for individuals to protect against misuse of their likeness and/or voice and provide for statutory damages for violation of those rights.

Violations of the No AI FRAUD Act and Statutory Damages

The statutory damages amounts are similar to other intellectual property violations. A violation (distribution, transmission, or other making available) involving unauthorized likeness content has a $50k per violation liability and a violation of unauthorized voice content has a $5k per violation liability – or the actual damages plus profits, if greater, for each type of violation. Punitive damages and reasonable attorney’s fees are also available as awards for the injured party.

The bill indicates that it “shall not be a defense to an allegation of a violation … that the unauthorized user displayed or otherwise communicated to the public a disclaimer …”. However, the No AI FRAUD bill allows for a First Amendment defense and provides factors to be considered in evaluating such defense.

Importantly, the act will not apply to negligible conduct, but rather aims to limit liability to non-negligible specifically defined harm. Also, it specifically states that violations involving sexually explicit or intimate images would constitute per se harm.

A full copy of the draft No AI FRAUD bill can be downloaded here.

AI and Unauthorized Use of Third-Party Likeness

It is important for users of AI-generated content to understand that the law related to AI is evolving with numerous cases currently being litigated that will eventually create a precedent for liabilities of use of AI and the violation of third-party rights. While most users of AI-generated content likely do not have ill intentions, the effects of unauthorized use for artists are real and harming. Likewise, creating content as gags or otherwise, involving another’s individual likeness can rise to the level involving statutory damages violations.

The No AI FRAUD bill seeks to provide a form of protection to all U.S. individuals, whether it is a famous artist or the kid next door – a blanket of intellectual property protection to all. If the bill is passed it should help curtail the use of personalized generative AI for misappropriation.

Key Takeaways on the Importance of the No AI FRAUD Act

As the use of personalized AI-generated content increases with misappropriation, the No AI FRAUD Act seeks to establish federal protection through:

• Recognition of the right to protection and control of the use of every individual’s likeness and voice;

• Providing an avenue for individuals to enforce such rights against unauthorized use; while

• Allowing for First Amendment Rights, free speech, and the liberty to innovate.

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This article has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal law and the applicable state or local laws that may impose additional obligations on you and your company. © 2024 Klemchuk PLLC