Greetings.
We're midweek, and I found some interesting ideas at the intersection of Business, Law, and Strategy.
Remember, I'm going to break it down as:
A business story,
A behind-the-scenes legal play, and
An underlying strategy or takeaway.
Why?
The more examples you see of these three elements working together, the better you will become at spotting traps or seeing opportunities.
Think of it as curating your Sherlockian "brain attic" for making and protecting your money.
1. The Case of the Johanssonish Mimic: How this AI Scandal May Signal Expanded "Likeness Stealing" Liability.
THE STORY: OpenAi recently released a new voice that drew attention for its flirtateous tone. Some liken it to the movie Her, where Joaquin Phoenix plays a character who falls in love with an Ai, voiced by Scarlett Johansson. Johansson was apparently angered by how similar the voice sounded to hers and sent a cease-and-desist letter. OpenAi responded that it was the voice of an independent actress and not intended to mimic Johansson or the character in the movie. To avoid further conflict, OpenAi agreed to stop using the voice.
LEGAL PLAY: Johansson has indicated that she has no plans to sue the OpenAi, but would she have a case if she did?
She could pursue a case for "appropriation of likeness." That's where someone uses another's name, physical likeness, or voice without permission. That makes sense when directly copying or pirating their likeness. But what about when it's a "soundalike" or "impersonator," as is the claim here. Let's look at the law and then the facts:
The law: There is precedent for celebrities suing for likeness appropriation. For example, in 1990, singer Tom Waits won $2.48 million in damages against Frito-Lay and its ad agency for using a soundalike singer in a Doritos radio ad. Before that, Bette Midler won $400,000 in damages from an advertising agency after it used an impersonator's voice in a 1986 commercial for Ford. So, it may not matter that OpenAi used a voice actress or even a synthetic version of her voice. The question is whether OpenAi intended the voice to sound like Johansson. Let's look at some of the facts that are starting to come out to answer that question.
Facts make the case. Here, the facts seem to be going against OpenAi. 1) Last September, Sam Altman, OpenAi CEO, asked Johansson to voice ChatGPT. 2) Altman publicly stated that "Her" was his favorite sci-fi movie and said, "...like the whole interaction models of how people use AI–that was incredibly prophetic." 3) According to Johansson, Altman contacted her agent two days before the release, asking that she reconsider–the release came out before she could respond. 4) On May 13, 2024, Altman posted a single word on X.com, “her.” This may not be enough to prove the case at this point. It would take the litigation discovery process to get more details or incriminating evidence to prove the case but I would be concerned.
THE TAKEAWAY: Now, let’s think this through step-by-step:
There is legal liability for directly appropriating a person's likeness. There isn’t much question there.
And precedent confirms potential liability for an indirect appropriation with intentional impersonation or sound alikeness. So, intending something to appear like someone else also qualifies as a potential violation. Got it.
Knowing this, companies need to think about about a few steps to avoid this problem before it arises. First, document the process you use with an eye toward defending an accusation of appropriation. Second, reconsider causal social media posts and think if it is really necessary to post. I can say that over the last five years, I haven't tried a case that didn't include excerpts from social media or text messages. Finally, its not all bad. Owning a likeness or persona may become more quantifable on the balance sheet as new attention on the uniqueness of a person's likeness is highlighted by Ai advancements. This could be a potential opportunity to secure additional avenues for business growth. So, there is a silver (business) lining in all this!
DIVE DEEPER: Here is a good article from Wired magazine giving a good in-depth analysis of what a lawsuit by Johannson could look like. And here is another good run down by the Washington Post.
2. The Case of Piggybacking Player: How Nestle is Positioning in a Growing Market.
THE STORY: I read this article about Nestle launching Vital Pursuit, a frozen food brand, and specifically marketing it to people on weight loss medications. Nestle describes it as "a new line of foods intended to be a companion for GLP-1 weight loss medication users and consumers focused on weight management." This had me thinking about two ideas: 1) the companion or accessory product strategy and 2) finding a generic category element to focus marketing communications and avoid trademark or copyright infringement in advertising.
LEGAL PLAY: First, it's essential to recognize this Piggybacking Strategy. The main idea is to identify a growing or uptrending market and add a companion product or service.
I first recognized this years ago when reading about Jibbitz accessory products for Crocs. Here is an early article about it. And here is another. From a legal perspective, the business needs to identify a generic common element within the market and then use that to advertise. To work, it needs to be something recognizable to the consumer.
Here, Nestle uses the well-known generic "GLP-1" common category for these medications to signal to consumers that it compliments the medications. Products promoting the Keto diet trend did the same thing. This strategy piggybacks all market players without picking favorites.
The goal is to avoid violating intellectual property, requiring a licensing agreement, or limiting to a particular larger product to the exclusion of others.
THE TAKEAWAY: Be open to piggybacking expanding products or services, but be aware of tactics for side-stepping intellectual property risks.
3. The Case of the Missing Rabbit: Coffeezilla Podcast Raises Questions About Rabbit R1 Scam.
THE STORY: I like watching the Coffeezilla YouTube podcast to see how people are misrepresenting results, products, or services to people. It helps keep me diligent and my senses sharp.
LEGAL ISSUE: This is early on in the story but raises the issue of fraudulent misrepresentation. This is where someone misrepresents facts to get somebody to invest or do something. A case is usually civil but could become criminal.
THE TAKEAWAY: This case is too early to tell, but it might become another cautionary tale about someone "biting off more than they can chew" and then paying for it. Like the story about Elizabeth Holmes and her disgraced company, Theranos. I’ll keep tabs on this story as it progresses. There may be additional lessons to expand on.
That is all. Take care.