AI game development legal issues, explained

André Schenini Moreira is a lawyer specializing in games, esports, intellectual property, and artificial intelligence. He is due to give a presentation at Nordic Game 23 in Malmo, Sweden, later this month, on “The Use of AI-Generated Assets and Its Legal Implications.”

It’s a timely speech, with AI dominating headlines right now. Members of The Writers Guild of America are currently on strike, with the use of AI one of their central concerns.

Entertainment companies – including game publishers and developers – are already beginning the process of replacing human workers with cheaper AI. This presents a thicket of ethical and legal implications that are a long way from being resolved. Governments around the world have yet to encode the use of AI into their legal frameworks. Even the definition of “AI” is up for grabs. Little wonder that so many are confused.

I spoke to Moreira about his work, and the current state of AI in game development, and I learned a lot about a complicated issue.

GameDaily: Tell us about yourself and your work.

Moreira: I’m a lawyer from Brazil, and a founding partner at FMA.legal. We are a boutique law firm that specializes in technology and creative markets. We work with the games industry, esports, software development. I’ve been working in the games industry for about 10 years.

When people started talking about artificial intelligence, and how this technology will impact the games industry legally, I decided to take a closer look. I studied. I joined some associations that discuss the implementation of artificial intelligence, like the International Association of Artificial Intelligence and Law.

I participated in a working group that discussed the ethical implementation of autonomous entities in various applications across society.

GameDaily: What do you hope your audience at Nordic Game 23 takes away from your presentation?

Moreira: When we start talking about artificial intelligence, it’s really difficult to avoid a conversation that takes an abstract approach – philosophical questioning about consciousness and personhood rights. But I am taking a more pragmatic approach.

I want to discuss issues that the games and legal industries are facing, like intellectual property and liability, related to AI. I want to give the audience a brief overview of these issues and how legal practitioners are trying to deal with them.

Legislators here in Brazil, in the U.S., the E.U., and elsewhere, are catching up, but so far they are looking at basic guiding principles. Most laws around the world state that it’s necessary to have human activity during the creativity process to make a copyright. Our legislation currently does not adequately cover questions about AI. I’m asking questions like, can a machine-developed creation carry IP rights, and if so, who can claim them?

I’m also going to discuss liabilities related to the use of artificial intelligence tools. Most tools that we see today take inputs from several places including from copyrighted works. Is that legally possible? Who is liable?

Also, decisions taken by AI might have data protection issues. If a consumer is affected by an autonomous entity – possibly one that makes an error – what rights does that person have? And how does that affect the companies that make use of these tools? I am thinking, for example, about how some companies use AIs to spot in-game cheating. The AIs hand out automatic bans to players caught cheating, but the AI is not always correct. At the moment, few companies allow any right to appeal.

GameDaily: How pervasive is the use of AI in creating games, right now?

Moreira: We are living through a big moment in generative AI. Artificial intelligence tools are being used to create digital assets like illustrations, characters, music, sound effects, voice, and animations.

We already have a lot of companies that are providing AI tools for the games industry. And we have major players implementing AI in their software development kits so that developers can create things faster.

Ubisoft, for example, has already initiated the development of an internal code of conduct for the use of AI, according to Yves Jacquier, executive director of Ubisoft La Forge.

GameDaily: Let’s go back to the issue of AI and IP ownership.

Moreira: From my legal perspective, currently, works originating from artificial intelligence tools don’t have intellectual property rights.

Say, you use an AI tool to create an illustration of a cat wearing a red hat. To me, this is not enough to grant you any intellectual property right over that final result. The artificial intelligence created the image from a data set, and your input was minimal, like using a search engine.

There are other hypotheses. The first one is that the IP rights originated from an artificial intelligence creation belonging to the company that created that artificial intelligence. Generally though, these companies’ usage terms sign over all rights – and liabilities – to the user. Another option is that the person using the AI owns the copyright.

We end up with a legal situation in which the user probably needs proof of significant human intervention during the creative process, such as was transformative to the end result. As things stand, IP rights derive from human intervention. But to answer that, you need to analyze the inputs and the processes for each creation.

GameDaily: To go back to your example of the cat with a red hat, it seems to me that if the AI is scraping copyrighted material to deliver results, a person who claims original copyrights – say a photograph of a cat that was used carelessly in the AI result – can try and bring a case of copyright abuse. Can you talk about that?

Moreira: Legal and creative experts right now are trying to understand the issues. But creators have rights and they exercise those rights. They understand that feeding an artificial intelligence their work, to create work for others, is an infringement.

On the other hand, the AI companies claim that the results are fair usage. They are merely using previous creations to deliver the best results, and to help make their AI tools better. They say they are not directly exploiting any individual piece of work and so there should be no infringement.

You get down to questions as to whether or not any particular AI result is derivative or transformative. Does the result use many elements to create something new, or does it simply replicate work that is already out there? As you can see, it’s a hot topic.

GameDaily: So, if you’re a company making extensive use of AI, you’re always going to need a human to go through the results very carefully, just from a legal perspective, before we even get into human vs AI creative aptitude. That seems to cut across the companies’ obvious desire to cut costs, and to cut jobs.

Moreira: Well, the companies always say they are just using AI as tools that help their employees and to make their games better. They say they are not replacing humans, only that human functions are changing. I don’t know if that’s true, but that’s what they say.

I’d say they are working towards a balance between workforce replacement and AI usage. They understand that there always needs to be a human involved in the process, and I’d advise any company to always have someone check the legal status of any AI output.

GameDaily: Finally, I know it’s always dangerous to predict the future, but it seems likely to me that we will see major lawsuits and legal cases over the next few years that will go a long way to clarifying these issues. How do you expect that to play out?

Moreira: Yes, I’m pretty sure that the use of generative AI will end up in litigation. We are all using AI tools more and more. I can use ChatGPT, for example, to draft a basic business agreement. People who have no idea how to code or how to create art are using AI tools. It’s spreading, and when things change so quickly, there are usually legal problems. While we see governments around the world try to react, the legal framework is not ready. There will be a lot of lawsuits that address the issues I’ve talked about. We will see how our judiciary resolves those problems.