Episode Transcript
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Danessa Watkins (00:05):
Welcome to
Litigation Nation. I'm your
host, Danessa Watkins, here withmy co host, Jack Sanker. As a
reminder, Jack and I are ourlitigation attorneys practicing
here in Chicago. And on thisshow, we are covering some of
the latest developments in legalnews from across the country.
Frankly, anything that catchesour attention or that you all
let us know you want us tocover.
(00:25):
So what are we covering today,Jack?
Jack Sanker (00:28):
So there's a
bombshell expose from
ProPublica, which was publishedjointly with the New Yorker on
the widespread contamination ofin the environment and really
the entire world which we'lltalk about with quote unquote
forever chemicals, how thatmight affect a few of America's
largest companies, and whatbusiness leaders and risk
managers need to be thinkingabout as different regulatory
(00:48):
changes are being rolled out.
Danessa Watkins (00:51):
Alright. And
I'm gonna discuss some of the
latest legal troubles forOpenAI, which is the creator of
ChatGPT. This is including thealleged use of Scarlett
Johansson's voice and its new AIassistant technology as well as
some copyright infringementclaims that have been filed by a
number of authors, includingGeorge r r Martin after chat gpt
(01:14):
was used to create the final twoinstallments of the Game of
Thrones book series.
Jack Sanker (01:19):
Oh my god.
Danessa Watkins (01:20):
Yeah. Very
interesting. So all that and
more, here's what you need toknow.
Jack Sanker (01:30):
In a joint report
that was published by ProPublica
in The New Yorker this pastMonday titled, Toxic
Gaslighting, How 3 m ExecutivesConvinced a scientist the
forever chemicals she found inhuman blood were safe. The story
follows a chemist named ChrisHanson who was employed by the
Minnesota based 3 m for over 20years, kinda details her
(01:52):
discoveries around certainchemicals that have found their
way, first into many streams ofcommerce that 3 m operates at
this point. And for anyone athome who's wondering, like, have
I been exposed to it? The answeris probably yes. PFAS, and this
(02:14):
is according to the, Departmentof Health, website from,
Wisconsin, which our our firm isactive in.
PFAS are found in cleaningproducts, obviously, water
resistant fabrics such as rainjackets, umbrellas, and tents,
grease resistant paper which isvery interesting because that
(02:35):
specifically is is I know from alittle bit of experience, that
refers to, like think of, like,the paper that your burger from
McDonald's gets wrapped in.That's that's a a big issue, and
that's been that's been in, youknow, circulation since the
fifties. Like that you know,it's one of the reasons why you
can wrap a burger in in, like,that wax paper and it doesn't
(02:58):
get soggy. Nonstick cookware,that's also mentioned in the
piece. It it was was or is well,no longer is, but was being
used, in Teflon, which wasbeing, manufactured by DuPont.
And I do believe DuPont got suedseparately for that. Personal
care products, shampoo, dentalfloss, nail polish, eye makeup,
(03:22):
stain resistant coatings used oncarpets, upholstery, other
fabrics, paints, I believe.According to the Department of
Health in Wisconsin, how can Ibe exposed to PFAS? The main way
people can be exposed to PFASinclude drinking water,
contaminated, municipal, orprivate well water. And that put
a pin in that because it's notlike someone is dumping PFAS
into the water.
(03:43):
This is this is chemicals thatare added to these products and
then, leach off of the productsinto the groundwater, that way.
So it's it's not like someoneis, you know, we're not saying 3
m or someone else is dumpingthis stuff into, you know, the
well water, but all of the, youknow, nail polish and nonstick
cookware and all those things,it that is also gonna include,
(04:05):
like, maybe you you don't drinkit and you take a shower and
that steam that you breathe in,you've also been exposed that
way. Eating fish with highlevels of PFAS, and as we've
talked about seeminglyeverything, has this stuff. It
seems like the freshwater fishin Minnesota, probably not
(04:27):
great. Food grown or raised nearplaces, that used or made PFAS.
Sorry, Minnesota. Packagedmaterials, this is, like, again,
the paper that's used in, like,your Amazon boxes, things like
that.
Danessa Watkins (04:44):
Tape.
Jack Sanker (04:45):
Tape. Mhmm. Tape.
Contaminated soil or dust, so
that's gonna be on everything.And then other things like, I
don't know why it was ski wax,and things like that.
So to answer the question Istarted this with, if you think
you have been exposed to it,it's because almost out like,
without a doubt you have been.Now Hansen worked for 3 m
(05:06):
starting in the mid nineties asa chemist. For some context, 3
m, the company makes basicallyeverything. Post it notes,
scotch tape, the n 95 mask thatwas everything, post it notes,
scotch tape, the n 95 masks thatwere so important during COVID,
waterproofing sprays for fabricand leather, insulation, and so
on. They're a massive companywith a market cap as of today of
(05:26):
about 55,000,000,000.
It's also probably on the brinkof bankruptcy according to a
couple of financial and legalanalysts, in part because of its
role in spreading these foreverchemicals into the environment,
which we're about to discuss atlength, allegedly. So back to
the story. Chris Hansen, thekind of protagonist of the story
and the chemist with 3 m, wasasked one day in 1997 to do
(05:50):
something a little differentfrom her day to day operations
to test blood, specificallyblood collected from 3 m factory
workers for the presence offluorochemicals or PFOS, which
is short for perfluoroOctanesulfonic acid. I'm not
going to try to say that again.I'm gonna say fluorochemicals or
PFOS, for the remainder of this.
(06:12):
Anyways, many 3 m productscontain these fluorochemicals
and and what's interesting hereis that as you find out as you
read the article and if you'vebeen paying attention to this,
it was already known at thispoint in even in 1997 that
fluorochemicals would AmericanRed Cross. Now what's really,
(06:37):
really interesting is, ChrisHanson found that both the 3 m
employee samples and the randomsamples from the general
population containedfluorochemicals. And the piece
goes on to detail how Hansonand, 3 m first assume that this
has gotta be some kind ofmistake and all the ways in
which they, repeated the testsover and over again and getting
(06:58):
the same results because, youknow, theoretically, the m it
makes sense for the 3 memployees to have, you know,
higher exposure to thesechemicals, but what are they
doing showing up in thebloodstream of everyday people?
Eventually, eventually, Hansentold her bosses at 3 m that
there was seeminglyfluorochemicals present in
everyone's blood, at leastaccording to her test. Now the
(07:19):
bosses Hansen and her team on.
Hansen and her team orderedfresh samples from every
supplier that 3 m worked with,and each of the samples tested
positive for PFOS. Now the pieceHanson didn't know was that 3 m
(07:46):
had already, conducted Hansondidn't know was that 3 m had
already, conducted animalstudies 2 decades earlier.
Remember, this is in 1997, sothey're talking about the the
late seventies at this point.They had shown p o PFOS to be
toxic, yet the results remainsecret even to many at the
company. In one early experimentconducted in the late seventies,
(08:06):
a group of 3 m scientists fedPFOS to rats on a daily basis.
Starting at the second lowestdose dose that the scientists
tested, about 10 milligrams for
every kilogram of body weight,the rats showed signs of
possible
harm to their livers, and halfof them died. At higher doses,
every rat died. Soon afterward,3 m scientists found that a
relatively low dose, 4.5milligrams for every kilogram of
(08:28):
body weight, could kill a monkeywithin weeks. Based on this
result, the chemical wouldcurrently fall in the highest of
5 toxicity levels recognized bythe United Nations. This daily
dose of PFOS was orders ofmagnitudes greater than the
amount the average person wouldadjust, but it was still
relatively low, roughlycomparable to the dose of
aspirin in a standard tablet.
(08:49):
Now in 1979, an intern internalcompany report deemed PFOS
quote, certainly more toxic thananticipated and recommended
longer term studies. That year,3 m executives flew to San
Francisco to consult with Hodge,a respected toxicologist. They
told Hodge only part of whatthey knew, that PFOS had
sickened and even killedlaboratory animals and had
(09:09):
caused liver abnormalities infactory workers according to a 3
m document that was markedconfidential. Hodge urged the
executives to study whether thecompany's fluorochemicals cause
reproductive issues or cancer.After reviewing more data, he
told one of them to find outwhether the chemicals were
present in man.
And he added, quote, if thelevels are high and widespread
and the half life is long, wecould have a serious problem,
(09:32):
unquote. Yet, Hodge's warningwas omitted from the official
meeting notes and the company'sfluorochemical production
actually increased over time,unquote. So Hansen tests showed
fluorochemicals in local farmanimals and wildlife, lab rats,
fish, so on. Some female animalswould kind of unexpectedly show
(09:53):
a decrease in fluorochemicals.And the explanation for that, it
turns out, is kind of,depressing because Hansen
discovered that those animalswere likely offloading their own
fluorochemicals into theiroffspring when they gave birth.
So pregnant mammals were givingbirth to offspring that also
tested positive for chemicalswithout having actually been
exposed to them yet. This partgets interesting. Quoting from
(10:15):
the piece again, quote, Hansenknew that if she could find a
blood sample that didn't containPFOS, then she might be able to
convince her colleagues that theother samples did and
parenthetical. Because at thispoint, they still didn't believe
her. Right?
Going back to it, she and herteam began to study historical
blood from the early decades ofPFOS production. They soon found
(10:37):
the chemical in blood from a1969 or 1971 Michigan breast
cancer study. They then ran anovernight test have been have
been somewhere remote where 3 mproducts weren't in widespread
use. The next morning, anxiousto see the results, Hansen
(10:58):
arrived to the lab before anyoneelse. For the first time since
she had begun blood testing,some of the samples showed no
trace of PFOS.
She was so struck that shecalled her husband. There was
nothing wrong with her equipmentor her methodology. PFOS, a man
made chemical produced by heremployer, really was in human
blood practically everywhere.Hansen's team found blood
samples from 1957 and 1971.After that, her lab analyzed
(11:22):
blood that had been collectedbefore 3 m created PFOS and it
tested negative.
Apparently, fluorochemicals hadentered human blood after the
company started selling productsthat contained them. They had
leached out of 3 m's sprays,coatings, and factories, and
into all of us, unquote. So it'sit's a correlation versus
(11:42):
causation thing here, butthere's a point in time in which
none of the testing isindicating any fluorochemicals
in anyone's blood. The chemicalsget introduced into the larger
stream of commerce, and now youreally can't find blood samples
that do not contain them. And Ishould note that 3 m is the
inventor and primary, producerof these chemicals during this
time period.
(12:04):
I I also don't wanna gloss overthe rest of the story about
Chris Hansen because it's it'sreally a good read and and kind
of tragic, and she getsharassed, and, her career is
sidelined according to thepiece, of course. But that's a
bit outside the scope of thisshow. I I do highly recommend
that anyone who's interested goread the article. It's really
well done. She also ends uptesting her own blood when she
(12:27):
was pregnant with twins.
And sure enough, she waspositive for flurochemicals, but
had an extremely low count,which she thought and and
understandably believes, meantthat she had offloaded the
chemicals that were in her bodyinto her unborn twins at this
point in utero. But I do wannastick to the kind of the legal
(12:48):
business and, you know, societalangles of this this story. Some
more info on that. In 2,002, 3 mannounced it would be replacing
its primary commercialfluorochemical PFOS with with
another one called PFBS. Then in2,006, the EPA accused 3 m of
violating the Toxic SubstancesControl Act, and 3 m paid a fine
(13:09):
without admitting anywrongdoing.
Eventually, fluorochemicals andother semicol chemicals
eventually, fluorochemicals andother similar chemicals. Don't
ask me to I was a history major,turned commercial litigator. I'm
not some kind of dork chemist.
Danessa Watkins (13:30):
Yeah.
Psychology. I got I've got
nothing for you there.
Jack Sanker (13:32):
Yeah. I I'm joking
about that. My wife's a doctor,
and she listens to the showsometimes. Sorry.
Danessa Watkins (13:38):
Thanks for your
support.
Jack Sanker (13:39):
Yeah. This show is
actually or this story rather
has been, dramatized in the 2016movie, Dark Waters with Mark
Ruffalo, if anyone's seen that,which I haven't seen, but this
actually does remind me a bitmore of Michael Clayton, which
is a a great lawyer movie if youhaven't seen that. Mhmm. Not
implying that 3 m has hadanyone, assassinated, like,
(14:02):
which happens in that movie,but, you know, it's a good
movie. Anyways, the term that'sbeing thrown about now, PFAS or
PFAS, which includes PFOS,Fluorochemicals, and, industrial
(14:24):
chemicals.
Going back to the piece, quote,between 1954 and 2000, 3 m
produced at least £100,000,000of, PFOS and other chemicals
that degrade into PFOS. This isroughly the weight of the
Titanic. Titanic. After the lateseventies, when 3 m scientists
established that the chemicalwas toxic in animals and was
accumulating in humans, itproduced 1,000,000 of pounds per
(14:47):
year. Scientists are still toget to grasp all of the
biological consequences.
They have learned just asHansen's bosses at 3 m did
decades ago that proteins in thebody bind to PFOS and there's
our cells and organs where eventiny amounts can cause stress
and interfere with basicbiological functions. It
contributes to diseases thattake many years to develop. And
(15:08):
at the time of a diagnosis,one's PFOS levels may be may
have fallen making it difficultto establish causation with any
certainty, unquote. So thesechemicals are now being linked
to developmental disorders,different types of cancers, and
so on. I don't wanna speculateon how closely linked they are.
We'll leave that to the, toxictort plaintiff lawyers. Quoting
(15:31):
again from the piece, quote, newhealth effects continue to be
discovered. Researchers havefound that exposure to PFAS
remember, PFAS, PFAS, is abroader term that encapsulates
florochemicals and PFOS.Exposure to PFAS during
pregnancy can lead todevelopmental delays in
children. Numerous recentstudies have linked the
(15:51):
chemicals to diabetes andobesity.
This year, a study discovered 13forever chemicals, including
PFOS, in weeks old fetuses fromterminated pregnancies and
linked the chemicals tobiomarkers associated with liver
problems. A team of New YorkUniversity researchers estimate
in 2018 that the cost of just 2forever chemicals, PFOA and
(16:11):
PFOS, in terms of diseaseburden, disability, health care
expenses, amounted to as much asGrandjean, a physician who
helped discover that PFAS harmthe immune system, believes that
anyone exposed to thesechemicals, which is essentially
(16:33):
everyone, may have an elevatedrisk of cancer. Our immune
system systems often find andkill abnormal cells before they
turn into tumors, quote, PFASinterfere with the immune system
and likely also this criticalfunction, he told the author.
Grandjean, who served as anexpert witness in the Minnesota
AG's case as a parentheticalagainst 3 m, has studied many
(16:56):
environmental contaminantsincluding mercury. The impact of
PFAS was so much much moreextreme, he said, that one of
his colleagues initially thoughtit was the result of nuclear
radiation.
Unquote. Yeah. So why are wecovering this in the show? It is
an interesting story. There isplenty of litigation around this
already.
We'll talk about in a moment.But more specifically, it's
(17:20):
worthwhile to talk about whatthe different regulators are
doing to address this stuff now.In April of 2024, for example,
the EPA issued a few new rulechanges and statements that
would acknowledge that noamounts of PFAS are safe, that
they are likely to cause cancer,that they are deemed hazardous
chemicals under federal laws,and are subject to federal
(17:41):
enforcement mechanisms to forcepolluters to clean the chemicals
up. The the EPA also sets limitsfor PFAS in drinking water. Now
local utilities will be forcedby law to test for PFAS in water
supplies starting in a fewyears.
And you can already see how thisis gonna affect companies and
businesses, not just 3 m. Anyonethat uses PFAS in its products,
(18:05):
processing, manufacturing, orputting them into streams of
commerce can be caught up inthese regulations. In fact, 3 m
just settled, I think, in Aprilof this year, a lawsuit filed by
different municipalities for, upto 12,500,000,000, which is to
cover the cost of treating localwater supplies, and in 2022
(18:25):
announced that it would stopmaking PFAS altogether. From the
regulatory side of things, 30 4states have introduced
regulations on PFAS. 28 stateshave adopted some measure of
regulation on the use.
And, importantly, for a lot ofpeople listening, the disclosure
of the use of such chemicals byreally anyone doing business in
those states. And from the workthat I've been doing on this and
(18:50):
and my experience here, what Icould tell you is that a lot of
these disclosure agreementsextend not only to the immediate
components those materials orparts, contain PFAS. Any
(19:10):
components that they're havingassembled abroad and being
brought into the states and thenbeing sold, all of these things
are going to be required to bedisclosed. So that level of,
like, knowledge and keeping tabson the supply chain is going to
be incredibly burdensome, for alot of businesses, you know,
especially considering, youknow, how much in our kind of
global commerce, how muchdifferent parts, different
(19:32):
things are imported from abroadand then assembled here,
repackaged, whatever. Minnesota,for example, has some of the
strictest regulations in thecountry on this so far and
incidentally is the home stateof 3 m.
Broadly speaking, the rules inMinnesota require and I'm gonna
go ahead and quote from a factsheet that's put out by the
Minnesota Pollution ControlAgency here. Quote, that a
(19:54):
manufacturer of a product sold,offered for sale, or distributed
in Minnesota, so that's,manufactured, offered for sale,
or distributed, that containsintentionally added must submit
certain required information tothe MPCA, which is the Minnesota
Pollution Control Agency. Thisrulemaking proposes to establish
(20:17):
a program to collect informationabout products containing
intentionally coding of theproduct, the purpose of any PFAS
in the product, the coding ofthe product, the purpose of any
PFAS in the product, theidentity of each PFAS present,
the amount MPCA MPCA must beprepared to collect this
(20:48):
information by January 1, 2026.So break that down for a moment.
It's, intentional addition ofPFAS to products or components,
things like that.
I it seems to be carving out anexception for unintentional
contamination. If you knowanything about PFAS, they show
(21:08):
up in everything. So if therewas a test that was done,
involving a factory worker hadwho had used shampoo that
contained PFAS and then wastouching certain components of
this guy's, like, shampooresidue. Right? So, they're
(21:30):
looking for the intentionaladdition of the of PFAS to
different products, things likethat.
But it does ex expand prettysignificantly down the supply
chain, and the informationthat's requested here, you know,
the purpose track of if you'rejust some, you know, local
(22:01):
supplier in the United States.And, like, think about, like, I
don't know, dropshippers or,like, the the the team who
salespeople that are on, like,you know, Instagram or whatever.
They have no idea. They're just,you know, what just advertising
something that gets sold in theUS. It gets shipped from China
or whatever.
So from talking with folks inthe industry, and this is
something that our office hasbeen working on, this disclosure
(22:26):
requirement and this trackingrequirement and all that, it
looks like it's gonna beextremely burdensome on local
business. But, if you're notthinking about this and if you
are in any of these states, youreally need to be because it's
already halfway through 2024.The Minnesota regulation goes
into effect January 1st. The EPAregulations go into effect in
(22:48):
2025. There are different onesall over the different states.
Illinois has one that's goingto, into effect shortly as well.
Different requirements fromeach. But, ultimately, at some
point, we expect that thefederal government is going to
kind of unify a, a federalstandard here. It it would be
well within, you know, congress'regulatory authority, interstate
commerce, whatever, to do that.And, this type of disclosure and
Producer (23:19):
decade.
Jack Sanker (23:21):
It also seems like
this information is going to be
retrospective to a point, soyou're going to and think about
it. If you have a product thatis being sold, it's hitting the
shelves, in 2027, but thecomponents and the different
parts and things like that havebeen sourced over the course of
a couple years, you're gonnahave to disclose that as well.
(23:42):
So the amount of record keepingand, the way in which you can
kind of make sure that you'reall kosher with these regulatory
agencies, pretty serious. Andthe other thing is if you are in
the business of merging with oracquiring or getting acquired by
any company, you're gonna needto know this is gonna need need
(24:04):
to be part of your due diligenceprocess, and it wasn't before.
So, on the corporate side ofthings, we're now seeing a ton
of inquiries about, you know,hey.
I'm some local constructioncompany. I wanna buy this
contractor, and and they, youknow, are using hypothetically 3
m insulation. Right? What do Ineed to know about this? What do
(24:27):
I need to disclose?
Whatever. I'm just a small, youknow, $10,000,000 company. So
it's it's causing a lot ofpeople to ask questions, which
is a good thing, but it it isgoing to shake up how business
has done for a lot of people inthe next couple of years. And
this story that is in the NewYorker and ProPublica this week,
(24:49):
and I'm seeing has picked up on,you know, what's been on cable
news now and everything else,PFAS and this type of, you know,
quote, unquote foreverchemicals, it's been in the news
for a long time. This isprobably the first time that
I've seen it, like, on the frontpage.
With the big settlement from 3m, as I mentioned, it's 12 and a
half 1000000000. 3 m also hassome other legal troubles
(25:10):
around, their earplugs, which Ithink was a $10,000,000,000
settlement if I remember.
Danessa Watkins (25:16):
I think I think
I just read it was for
6,000,000,000.
Jack Sanker (25:21):
Yeah. I I So
they're,
Danessa Watkins (25:22):
I mean, they're
shelling out 1,000,000,000 of
dollars for different products.
Jack Sanker (25:27):
They have a market
cap of 55,000,000,000 and
roughly 16 to 20 is now gonna beearmarked for, settlements. And
this is, like, before, the andthis is not this is not the,
the, like, toxic tort litigationthat I think and I think most
people think will happen. You'llhave lawsuits similar to the
(25:51):
asbestos talc litigation.
Producer (25:52):
Mhmm.
Jack Sanker (25:52):
That's been going
on for decades. That has almost
bankrupted, you know, Johnsonand Johnson several times and
has bankrupted other companies.Interestingly, the, you know,
the big insurance companies,they're to me, they're like
Vegas. Like, they're never wrongabout this stuff. Like, they're
all they're really great atclocking the risk.
(26:15):
And they, you know, this is kindof insider baseball, but a lot
of the reinsurers have alreadywritten this out of their
policy. So if you think thatyour insurance policy, covers
liabilities for whether it'stoxic exposure for PFAS or,
business liabilities associatedwith the disclosure
(26:36):
requirements, it probablydoesn't. So if you're thinking
about, the contracts that you'reentering into, if you're
acquiring or merging or,anything on those lines, you
really need to be thinking hardabout the risk management side
of this thing and how it's gonnaaffect you kinda down the road.
So that's that's the story,Denessa. I mean, there's a lot
(26:58):
going on, obviously.
There's the the human interestelement of it all, of course,
which I do think I've reespassed, and maybe we should
spend a moment on that.
Danessa Watkins (27:06):
Well, I think
it's probably yet to be seen. I
mean, we we do have this this
Producer (27:10):
settlement pending. I
think
Danessa Watkins (27:10):
I saw that,
settlement pending. I think I
saw that, 3 m is gonna startmaking payments in the Q3 of
this year, but is it is expectedto extend 2 years where they're
gonna start you said, it's frontpage news, this is when we're
(27:31):
gonna start seeing the classaction lawsuits.
Jack Sanker (27:35):
Yeah. And and like
I said, it's gonna be you know,
you're going to have the, like,kind of toxic toward personal
injury type class actions, youknow, that are kind of with this
type of thing. But themunicipality aspect of it, I
think, is very interestingbecause, cities and towns who
are going to, by law, berequired to test for this thing
and then, by law, be required toremove it from the water supply.
(27:58):
That's not free.
Danessa Watkins (27:59):
Right.
Jack Sanker (27:59):
And they're gonna
be looking for someone to,
contribute or and that's goingto come down to you know, 3 m is
singled out here because that'swhat article's about, but
they're not the only ones,obviously. Mhmm. So, yeah, it
it's it's, like, kind oflooming. A lot of these
companies just are going to haveto, to deal with this. And my
(28:24):
first experience is a briefexperience, but my first
experience out of law school wasin an asbestos litigation firm.
And I kinda view this as almostexactly as that.
Danessa Watkins (28:32):
Mhmm.
Jack Sanker (28:33):
It's like it looks
exactly like that where they
kinda knew, allegedly, that itwas bad and didn't do anything
about it. And and now it's kindof the house of cards is coming
down.
Danessa Watkins (28:47):
Well, on the
frustrating part is, like you
said, not only do themunicipalities now need to
probably pay for certain things,which maybe some of this
settlement will cover, but Ihave a feeling that
Jack Sanker (28:59):
It'll exceed 12.5.
Danessa Watkins (29:00):
Yeah. I think
12 and a half 1000000000 is
gonna go pretty quickly. Sothat's probably gonna come from
either the government or thetaxpayers ultimately.
Jack Sanker (29:09):
Well, I think from
the part of the reason that that
settlement was reached, and Iwas keeping tabs and it was
happening, was because ofsolvency concerns for 3 m. It's
like, take this money now ortake it, you know, get in line
with our other creditors.
Danessa Watkins (29:22):
Right. Yeah.
And that's what I'm thinking is
at some point, they're gonna gobankrupt here.
Jack Sanker (29:25):
Some people think.
Yeah.
Danessa Watkins (29:27):
But, I mean,
it's This is not financial
advice. Right. Yeah. Right.Exactly.
But aside from, you know, justthat, now you have these
businesses that have to spendall this money in their
compliance and, you know, thethings they need to do because
of a company that knew fordecades, allegedly, that I was
selling these products.
Jack Sanker (29:47):
Yeah.
Danessa Watkins (29:48):
And, you know,
now that that cost is being
passed on to to thesebusinesses, unbeknownst to them,
that Yeah. You know?
Jack Sanker (29:55):
And as I
understand, 3 m invented this
type of product. And, like,there's some cool anecdotes in
the story about, like, wherethese these cool and, you know,
if we're going to defend 3 mhere, you know, may maybe I
should, maybe I shouldn't. But,the products that they that they
have kind of contributed to theworld are important and very
(30:17):
interesting and it and it's it'spretty cool. Like, there's an
anecdote in the story about how,one of the, PIFA's, chemicals
dropped onto one of the factoryworkers' shoe, and then they
noticed that they, like,couldn't get it off the shoe.
And then it, like, coated theshoe in such a way that it was
waterproof and then they turnedit into, Scotchgard.
Scotchgard. Yes. That's that'sthe product. Scotchgard which
(30:39):
is, you know, like a a leatherfabric waterproofing material.
And that's, like, that's cool.
And I've prob I've used that,you know. I use Scotch tape
obviously. And we all, like,were clamoring for, n 95 masks,
you know, not all that long ago.And I should note 3 m does they
they have defended themselves onthis publicly and said, you
(31:01):
know, whatever the whatever aninadvertent damage we've done,
it was in service of, like,providing these goods and
services and, you know, I don'tthink they say, you know,
whether they should have talkedabout it earlier or not, but I
think they do make the key like,the cost benefit case. Yeah.
You know, I don't know if that'scompelling or not.
Producer (31:19):
Yeah.
Jack Sanker (31:19):
But,
Danessa Watkins (31:20):
I'm shaking my
head over here. Yeah.
Producer (31:22):
Well,
Danessa Watkins (31:23):
Tell that to
the person who has cancer. You
know?
Jack Sanker (31:25):
Yeah. And and, you
know, there I will say also from
being around this, the reasonthat the toxic tort cancer
lawsuits, the birth abnormalitylawsuits, the, you know, renal
failure stuff. That hasn'tsprung up yet is because the the
science at the individual level,I don't think is there, for what
(31:46):
I've seen. Well,
Danessa Watkins (31:48):
it seems like
it's so widespread that it how
do, you know, how do you castout the other variables?
Jack Sanker (31:53):
That's the really
interesting part is Yeah. That
they're you can't find a controlgroup. Mhmm. I mean, it was they
had to go back decades, in theUS to find anyone who was, like,
free of this thing. There was aheadline that caught my eye the
other day, actually, on this asI was putting this article
together.
It was a study that they theycalled them microplastics, but
(32:20):
that would also largely beincluded in this. Jesus. Every
single one. So Yikes. And it'sit's it's in unborn fetuses.
It's in everything. It's, youknow yeah. It's really strange.
And there does seem to bethere's a temporal link, of
course, between when thechemicals were introduced by 3
m, and when this stuff startedshowing up in everyone's
(32:42):
bloodstream. So there's not inthis article, but there's other
information about, like, really,really far into, like, sub
Saharan Africa.
There's examples of people thathave not have been exposed or
you have to get pretty far intothe unindustrialized world to
find people Mhmm. That haven'tbeen around this, but that's
gonna be an increasinglyshrinking number.
Danessa Watkins (33:00):
Mhmm. Right.
Yeah. It's almost too big to
wrap your mind around, to behonest, but, it's probably one
of those things where the morethat lawsuits get filed, it's
just gonna be too expensive tolitigate them, and it'll just,
yeah, turn into settlements.
Jack Sanker (33:16):
Yeah. Yeah. You'd
you'd think so. But the
regulatory compliance aspect ofthis is is gonna be what we kind
of have our eye on here. And wemay even bring on, one of our
partners here at the firm in thenext couple of weeks by the name
of Craig Craig Kubiak, who kindof specializes in that and is
working with of these companiesto, get their ducks lined up in
(33:37):
advance of all these deadlines.
And, also, as we know, theseregulations come out, they can
move back, they can, you know, ayear or 2 years, 3 years. And
the EPA, at the federal level isgonna be inundated with this
information. It's gonna takethem 5 years to you know, if you
give them the data for 2,025,they will not be able to sift
through it until 2,030. Youknow? Kind of like the IRS in
(33:59):
that regard.
But you still have to do it. Youknow? And, like, you have to, I
make a public log of having doneit.
Producer (34:07):
Mhmm.
Jack Sanker (34:08):
That's gonna affect
investor relations. That's gonna
affect, you know, whethersomeone wants to buy your
company or not. It's a it's abig deal. So we're trying to get
our heads around that here and,doing our best to to help
everyone out. Everyone who wantsto, you know, be good faith
actors in this process.
Danessa Watkins (34:29):
Alright. Well,
pivoting away from one area of
doom and gloom, and I guessentering into a scary world of
artificial intelligence. I'mgoing to cover some recent
stories and and litigation andclaims against OpenAI. So this
(34:50):
is an American artificialintelligence research
organization that was founded in2015. The company's website
states, quote, our mission is toensure that artificial general
intelligence, AI systems thatare generally smarter than
humans, benefits all ofhumanity, end quote.
Open AI researches generativemodels and how to best align
(35:12):
them with human values. So thecompany openly acknowledges the
potential power of artificialintelligence as it employs a
specialized safety systems teamand dedicates a whole section of
its website to discussing itssafety standards and best
practices for users who interactwith its products. Now OpenAI is
most readily known for its chatgpt product, which we've taught
(35:36):
talked a lot about on thispodcast in in different areas of
law and how it's used. But thecompany just recently expanded
the capabilities of this productby introducing voice mode or
voice assistance. So in May of2024, OpenAI unveiled its voice
assistant during an event in SanFrancisco.
(35:58):
Mark Chen, who's the company'sresearch lead, he in a
demonstration, he told theassistant that he was nervous to
be doing a live demo. And thenin a peppy cheerleader type
voice, the assistant responded,oh, you're doing a live demo
right now? That's awesome. Andthen mister Chen, he went
through a lengthy demonstrationjust explaining how the product
(36:21):
essentially combines combinesconversational skills of the
chat GPT chat box with the soundof a voice assistant similar to,
like Siri on the iPhone. So intotal, OpenAI has 5 voices
associated with its assistant,which are all assigned kind of
catchy, earthy names.
(36:43):
Breeze, Cove, Ember, Juniper,and Skye. Not sure what the
origin of those.
Producer (36:50):
Okay.
Danessa Watkins (36:50):
Yep. Now all of
this was great until the voices
went public. And one inparticular, Skye, was eerily
similar, if notindistinguishable, from the
voice of well known a listactress Scarlett Johansson. So
if you recall in 2013, Johanssonstarred in the Spike Jonze movie
Her, and she provided the voiceof an AI system in that film.
(37:15):
And if I remember right, I thinkthat film was about a man who
sort of secludes himself andthen ends up falling in love
with his virtual assistant,which is Johansson's voice.
Jack Sanker (37:25):
It's a lovely
movie. It sound it sounds, sad
the way you just said it, butbut it's actually a really sweet
movie, believe it or not.
Danessa Watkins (37:33):
I think it's
supposed to, though, highlight
the the power and, you know,potential issues with AI.
Jack Sanker (37:39):
In this movie, he's
just like a tragic, like, emo
guy.
Danessa Watkins (37:42):
Yeah. Lonely
lonely guy who, yeah, relies on
AI for, I guess, his only socialinteractions.
Producer (37:48):
Love. Yeah.
Danessa Watkins (37:49):
Yeah. Yep. So,
I guess, you know, it it's just
kind of a weird situation whereScarlett Johansson was an AI
voice, and now there is a voiceout there that
Jack Sanker (37:58):
She won an Academy
Award for
Producer (37:59):
them, by the way.
Danessa Watkins (38:00):
Oh, did she?
Jack Sanker (38:01):
She did. Yeah. Oh.
Producer (38:02):
Quick producer note,
she did not.
Danessa Watkins (38:04):
Look at you.
Jack Sanker (38:05):
I like the movie.
What do you think?
Danessa Watkins (38:07):
So. Gosh. So
since that voice called her
agent and asked that sheconsider licensing her voice for
a virtual assistant. And he madethat request at least twice over
(38:27):
the past year and both times,Johansson declined. So OpenAI
quickly addressed Johansson'sallegations, and the company
actually immediately ceasedusing the Sky voice, but posted
on its online blog over theweekend, quote, AI voices should
not deliberately mimic acelebrity's distinctive voice.
(38:47):
Sky's voice is not an imitationof Scarlett Johansson, but
belongs to a differentprofessional actress using her
own natural speaking voice, endquote. OpenAI said that it
couldn't actually share thenames of its voice professionals
for privacy reasons, but that ithad worked with directors and
producers to develop these 5voices for its products, and
(39:09):
they were recorded last summerin San Francisco. So,
ultimately, OpenAI is justsaying that the similarities to
mister Henson's voice wereincidental and that the voice
wasn't specifically designed tosound like that actress. So
we're just gonna stop herebecause I do wanna address just
generally that the imitation ofvoices has become so prevalent
(39:33):
recently across so manysituations. I know we've seen
fake songs come out claiming tobe artist's work when it really
was AI, in my
Jack Sanker (39:41):
home Drake?
Danessa Watkins (39:42):
Yeah. Drake.
That's what I was thinking of.
Yep.
Jack Sanker (39:45):
Sacrilege. You
know, AI Tupac.
Danessa Watkins (39:48):
Yeah. Exactly.
And then in my home state of New
Hampshire, a few months ago,voters were receiving robocalls,
which sounded like presidentBiden telling citizens not to go
out and vote in the primaries.My god. So, yeah, I mean, the
technology here, it's it's real.
It's being used regularly. And,you know, Johansson, royalties.
Producer (40:17):
Exactly. Yeah. And, I
mean,
Jack Sanker (40:17):
she is a voice
actress. On royalties.
Danessa Watkins (40:19):
Exactly. Yeah.
Jack Sanker (40:20):
And, I mean, she is
a voice actress. On top you
know, she's a she gets paid todo this, like, a lot of money to
do this.
Danessa Watkins (40:26):
You know?
Right.
Jack Sanker (40:28):
Financially is,
like, she's getting ripped off.
Mhmm.
Producer (40:29):
Allegedly. Allegedly.
Yeah. There is no lawsuit filed
yet. But There was a cease and
Jack Sanker (40:30):
desist, I believe.
Danessa Watkins (40:35):
I think so.
Yeah. Yeah. Yeah. You know, like
I said, this is just one of manyof OpenAI's problems that
they've been facing recently.
They have been hit with a litanyof copyright infringement claims
over the past year or so,alleging that the company is
using copyrighted works to trainits flagship large language
(40:56):
model or LLM. And, that chatgpt, its outputs improperly
summarize, mimic, or reproducecopyrighted materials. So one of
these class action lawsuits wasbrought in the Southern District
of New York. It was filed inSeptember of 2023 by the authors
guild, which is the nation'soldest and largest organization
(41:18):
of writers. Along with 17individually named authors, many
of whom are are well knownhousehold names like John
Grisham, Jodi Picoult, andGeorge RR Martin.
So these authors are allegingthat their books were downloaded
from pirate ebook repositoriesand then copied it into the
(41:38):
models that power Chat gbt. SoOpen AI is allegedly using the
author's voices, characters,stories, etcetera to train chat
gpt, which in turn allows usersto create unauthorized sequels
and derivatives of thesecopyrighted works. So the claim
is that OpenAI should have firstobtained these are loaded into
(42:09):
the chat gpt model, when a userprompts it to, the the system
will produce an unauthorized,for example, outline of the next
purported installment work forthese authors. So it'll actually
pull characters from thesebooks. It also can generate low
quality ebooks impersonating theauthors.
(42:31):
So one of the plaintiffs isauthor Jane Friedman, and she
discovered what she says, quote,a cache of garbage books, end
quote, written under her name,for sale on Amazon that they
discovered were created by ChatGPT. So one of the questions in
this lawsuit is, althoughcertainly chat gpt has been used
(42:51):
to produce these infringingworks, how do we know that
OpenAI knowingly trained chatgpt on these copyrighted
materials. Well, the lawsuitprovides a number of bases, but
most notable and probably mostconcerning is that OpenAI has
has confirmed this to be truetrue stating that their training
data is, quote, derived fromexisting publicly accessible
(43:13):
corpora of data that includecopyrighted works, end quote.
Jack Sanker (43:17):
Right. They're
they're broadly speaking
claiming fair use here. Right?
Danessa Watkins (43:21):
Exactly. That
is their argument. So
Jack Sanker (43:23):
We can talk about
fair use in a minute. Yeah.
Danessa Watkins (43:25):
Oh, well, yeah.
Actually, that's kinda where I
was going anyways. And that isjust a legal doctrine that will
permit the unlicensed use ofcopyright protected works in
certain circumstances, like, forexample, parody, comment,
criticism. It kinda goes hand inhand with first amendment
rights. So that's what OpenAI isarguing that their program's
(43:47):
ingestion of these copyrightedworks to create large language
models or other AI trainingdatabases is generally fair use.
So like I said, that's just oneof the lawsuits that's out there
right now. There are also anumber of lawsuits in the
Northern District of California,and these were actually brought
prior to the New York lawsuits.And just recently in April, the
(44:11):
the California cases, they weretrying to intervene in the New
York actions for the purpose ofsaying those. I think the the
concern of the plaintiffs or theplaintiff's in California who
are trying to bring action underCalifornia's laws. But the the
(44:33):
New York judge ended up,rejecting that that intervention
saying that the claims weredifferent.
For example, the New Yorkplaintiffs had actually added
Microsoft as a defendant intheir case, saying that
Microsoft as an investor ofOpenAI is responsible for some
(44:57):
of the training because itcouldn't have happened without
Microsoft's judge mentioned wasthat the thing that judge
mentioned was that the wholepurpose of intervening was to
stay the case. So those New Yorkplaintiffs would have to wait
and see what happened in theCalifornia litigation, which
(45:20):
just would be unfair to them. Sothe judge is essentially saying,
let's let's keep these casessafe separate from now. You all
bring your claims in California.We'll maintain ours here in New
York.
I'm sure there are others thathave popped up, but those are
definitely 2 of the the venuesthat seem to be the biggest for
for these type of cases. So Iwas kind of interested in this
(45:41):
story when I read that ChatGPTcan be used to actually create
full works, and, George r rMartin is one of the plaintiffs
that has fallen victim to thatproblem. Okay. I don't need to
know your thoughts on
Producer (45:57):
I mean, we've
Jack Sanker (45:58):
been waiting for
the books.
Danessa Watkins (45:59):
I know.
Producer (46:00):
What do
Jack Sanker (46:00):
you want us to do?
Danessa Watkins (46:01):
I know. So
that's It's been
Jack Sanker (46:02):
a long time.
Danessa Watkins (46:02):
That's what
they're saying. There are so
many people out there that arejust sitting on the edge of
their seats. And, yeah.
Jack Sanker (46:08):
He has been
promising these books
Danessa Watkins (46:10):
for Alright.
Well
Jack Sanker (46:10):
10 years.
Danessa Watkins (46:11):
He's still
diligently working on them.
Yeah. So Alright. But it so,yes, one tenacious fan said I'm
done waiting and actually usedchat gpt to finish the series,
obviously, in a fraction of thetime of of what George is
taking. So I looked into that alittle bit, and I found this IGN
(46:33):
article, in develop or excuseme, independent developer, Liam
Swain.
He actually published hisproject where he used Chat GPT
to write the remaining 2 booksof, what is it, song of ice and
fire series. So he explainslike, went through the prompts
he did. He essentially createdan outline for the first chapter
(46:55):
of 1 of the books and then justrepeated it over and over and
then asked Chat GPT to get morein the outlines. Ultimately, he
came up with 45 chapters of of abook. And
Jack Sanker (47:08):
Has anyone read it?
Danessa Watkins (47:10):
Yeah. So I I
think they've been pulled down
now because of these lawsuits.But, yes, they they were put out
there. People did access them.And so he talks in this article
about what he thought chat gptdid well and what it didn't.
Apparently, if anyone knows Gameof Thrones, I mean, I I started
to I did the audiobooks. Istarted to listen to him on
(47:32):
audio, and and then I, you know,watched the series and then
Yeah. The audio fell off.
Jack Sanker (47:35):
Shows better. Yeah.
Danessa Watkins (47:36):
But I just
can't even imagine reading the
book and trying to keep up withcharacters. Like, I would
probably have to have, like,side notes going because it'll
be, you know, know, a couple 100pages before a character pops up
again, and in that time youforget. Well, apparently, chat
gbt does not forget, and it wasvery good at tracking character
continuity, would havecharacters, yeah, disappear. It
(47:59):
actually says for 100 100 ofthousands of words before a
character would return to ascene and, you know, pick up
exactly how you knew thatcharacter before. So that was
kind of interesting.
But this guy said that what chatgpt is not good at at is
Martin's best trick of killingoff characters in surprising
(48:21):
ways. So those type of plottwists, there there just isn't
enough examples of that outthere. So, you know, chat g GPT
doesn't have all of that datathat would, I guess, teach it to
do those type of, like, sporadickillings.
Jack Sanker (48:38):
To be creative.
Danessa Watkins (48:39):
Yeah.
Producer (48:40):
Yeah.
Danessa Watkins (48:40):
Yeah.
Essentially, to to be an author.
So that was certainly lacking.And, so this guy says, you know,
AI is not gonna replace authorsanytime soon. But still, that's
not a reason to to not protecttheir works, especially when
these books are being put outunder their names.
You know?
Jack Sanker (49:00):
Yeah. And and as I
no. Caveat. Not an intellectual
property attorney, but I tookone class in law school. But as
I understand, fair use allowsyou to use copyrighted materials
for certain instances like,educational purposes, critical
review, things like that.
(49:21):
One thing that is, like, a bigno no is using copyrighted
materials for commercialpurposes.
Producer (49:25):
Mhmm. So it's
Jack Sanker (49:26):
something you're
gonna use it to, you know, to
make money off
Danessa Watkins (49:29):
of. Right.
Right.
Jack Sanker (49:30):
Chat gbt is has a
free version and has a paid
version, but it is ultimately aa paid company.
Producer (49:34):
Mhmm.
Jack Sanker (49:35):
And it is just
consuming copyrighted materials
to spit out I would say even thethe end product is itself is
maybe not even the infringementso much as the infringement is
the creation of the algorithm.The algorithm is the material to
the program so that I can workoff of it. Right. Without
license. Right.
So
Danessa Watkins (49:57):
material to the
program so that it can work off
of it.
Jack Sanker (49:59):
Right. Without
license.
Danessa Watkins (50:00):
Right.
Jack Sanker (50:01):
Yes. Yeah. Is
infringement on on these folks'
copyrights? Because what it doesis it spits out, you know, an
amalgamation of, like, a what itis legal to do is write, like,
fan fiction. Right?
Like, that would be legal
Producer (50:13):
Mhmm.
Jack Sanker (50:13):
To say, like, I
wrote my own take on the Game of
Thrones books.
Danessa Watkins (50:16):
Yeah.
Jack Sanker (50:17):
That's, fine. It's
not fine if you're
commercializing that, throughthis through ripping off
copyrighted materials to do soas as I understand it.
Danessa Watkins (50:30):
Yeah. Creating,
like they call them derivative
works
Producer (50:32):
Right.
Danessa Watkins (50:32):
Essentially.
Jack Sanker (50:33):
Yeah. And it gets
even worse when you, like,
falsely attribute it to the tothe author.
Danessa Watkins (50:38):
Well, yeah,
that's that's certainly the most
egregious. But, but, yeah, evenusing, George RR Martin's other
books, you know, having the samecharacters, the same plot lines,
and all that, and then comingout with these book. I mean,
does that hurt his future sales?You know? Because now fans have
already alright.
We got our fix.
Jack Sanker (50:58):
Yeah. And I should
take that back, actually. I
actually do think if you take ifyou're, like, writing a book and
you're like, this is my take onGame of Thrones and you're using
the same characters and, like,whatever, I think that that
actually is infringement.
Danessa Watkins (51:07):
I think you
might be right. Yeah.
Jack Sanker (51:08):
I think that the
authors will be, like, okay with
it if you're, like, publishingit on Tumblr Yep. Versus, you
know, selling it as an ebook.Versus, you know, selling it as
an ebook. Right. Absolutely.
Another lawsuit
Producer (51:15):
that's been brought at
New York is, actually by New
York Times.
Jack Sanker (51:15):
So, Chad Gbt,
Danessa Watkins (51:22):
actually by New
York Times. So, ChattGbt somehow
got into a database of a bunchof old New York Times articles,
and then it's been, you know,spitting those out in different
ways. So, as much as you wouldthink, you know, the news is
free and anyone can access it,well, sure, if it's published by
New York Times.
Jack Sanker (51:42):
And it's not free.
You know? Like, there is a cable
there.
Danessa Watkins (51:44):
That's true.
Yeah. So, so they and that goes
back decades. I mean, they theirlawsuit is pretty big with that.
I think they may I don't thinkthey actually joined that case
with the one by the the authorsguild, but I think the same
judge is overseeing them, which,you know, makes sense.
So because they're definitelyrelated. So, you know, these are
(52:09):
these are in the early stages. Ithink one one case is hearing
motion to dismiss argumentssoon. The New York one of the
New York cases is just goinginto preliminary discovery. So
there's a lot to be seen.
Obviously, OpenAI is going toprotect chat GPT as much as it
can. You know, it it needsaccess to all of this
(52:32):
information in order to do whatit does. So
Jack Sanker (52:34):
And it can't. Its
business model, like, probably
can't sustain licensing thisstuff. Right?
Danessa Watkins (52:39):
Oh, yeah. I
mean, the I can't even imagine
what the cost involved would be.Right.
Jack Sanker (52:43):
That's the whole
point.
Danessa Watkins (52:44):
Mhmm. For sure.
And, and I'm sure there are
people that will say no.
Jack Sanker (52:48):
Yeah. I I was,
like, glancing around before
coming here to record, and thereare, you know, scholarly
articles that have been writtenin law review. I don't know how
you know, I can't vouch for thecredibility of the authors or
the law review, and I didn'treally spend time much time
reading it. But there are peoplethat are claiming it is fair
use.
Producer (53:05):
Mhmm.
Jack Sanker (53:06):
So, like, it will
have to be, like, decided. Be
stuff will just gobble it allup. You know?
Danessa Watkins (53:23):
Yeah. It's
definitely there's gonna be some
interesting loss set from thesecases, if they don't end up just
settling, but I think the theinterests at stake, you know,
unless discovery starts to go acertain way are are so important
that probably these thesecompanies, including Microsoft,
now that Microsoft is a nameddefendant, you know, that ups
(53:44):
ups the stakes as well. They maywant to get some rulings,
potentially.
Jack Sanker (53:50):
Going back to
Scarlett Johansson, did you did
you see the tweet that, SamAltman put out, regarding this?
It so this when they demo thethe voice, assistant, it was
Sky, which is the one thatsounds like Scarlett Johansson.
Everyone was, like, soundsexactly like Scarlett Johansson,
and it's, like, very obviouslyan homage, at the very least, to
(54:12):
her role in the movie Her. Mhmm.And he just tweeted the word
her.
Producer (54:16):
Yeah. I did
Danessa Watkins (54:16):
see that. Oh,
yeah.
Jack Sanker (54:16):
Just admit to it,
dude. Why not?
Producer (54:18):
Right. Right. Now I
know. Why do that? You know?
Yeah. That was I'm
Jack Sanker (54:19):
sure that their
Producer (54:22):
legal was
Danessa Watkins (54:23):
like Yeah.
Jack Sanker (54:24):
I can't. Billy Pet.
Danessa Watkins (54:25):
Yeah. I can't
say that I envy his lawyers.
That was
Jack Sanker (54:30):
Well, you know,
it's it's another it is an
example. Like, we've talkedabout this with respect to,
Facebook's kind of, a companylike Facebook, a company like
Uber, that have and that whole,like, you know, move fast and
break things ethos from the mid2000s of, like, this may or may
not be legal. It's you know,we'll call it in a gray area for
(54:52):
now, but let's, like, get intothat space as quickly as we can
because regulators don'tunderstand it
Danessa Watkins (54:58):
Yep.
Jack Sanker (54:59):
And, establish
ourselves and then raise as much
money around it as possible. Andthen, you know, regulators will
be forced with, you know, thechoice of dismantling a
multibillion dollar enterpriseor bending the rules. And that
is at least somewhat aneffective business model. You
know, we'll call that regulatoryarbitrage, for, like, a company
(55:21):
like Uber that, you know, at theoutset was like, we're not a
taxi company. We're, you know,something else.
We're a dispatch company. Yeah.And so we don't have to have
workers' comp insurance.
Danessa Watkins (55:30):
Right.
Jack Sanker (55:30):
And regulators are
like, we don't know what you are
because we're 80. You know?Mhmm. And they've more or less
weathered the storm, and haveavoided what I think at the
outset was probably prettycondemning legal arguments, and
now we've bent those rules intheir favor and for good or for
bad.
Danessa Watkins (55:48):
And it and
that's also the varied state to
state, sometimes city to city,which now kinda when you yeah. I
use that analogy. Now I can kindof see why the plaintiffs in
California wanted to intervenein the New York case because,
you know, artists aren'tstationary. They travel, and
they wanna make sure that theirrights are protected, you know,
(56:08):
across the country.
Jack Sanker (56:10):
And the larger of
the sticking points of the big
studios and a lot of thestreaming services was, we want
to retain rights to your name,image, and likeness for use in,
(56:30):
like, subsequent things. So ifyou wanna in the the big shots,
you know, the a listers, thingslike that, someone likes
Scarlett Johansson, have a lotmore leverage there. But if
you're like a working actor whois an extra or has speaking
parts in a TV show or whatever,that would have would have had
to have been something yousigned on to as part of the new
renegotiation of these streamingdeals, where they could just you
(56:52):
know, you could come on, do yourthing, they pay you once, and
then they can just simulate yourvoice and image via AI forever,
and you get none of thoseresiduals. There's a Black
Mirror episode about this too,actually.
Danessa Watkins (57:04):
There's a Black
Mirror episode about everything
scary that happens.
Jack Sanker (57:07):
Salma Hayek. It's a
great episode.
Danessa Watkins (57:10):
No. I actually
a couple of months ago, I met
the attorney that was involvedin the negotiations on behalf of
the actors, and and she was youknow, there's a lot she couldn't
talk about, but that was one ofthe the big issues that came up
was that, yeah, actors, theywould be required to do these,
like, body screens Yeah. Whichokay. From you know, let's say
(57:32):
that these these productioncompanies aren't all bad. And,
you know, they're shooting, andthen they, at months after the
fact, realize, oh, you know, weneed to the the story doesn't
make sense.
We need to add in this one extrascene with this actor doing
this. And what are they gonnado? Pay that person a $1,000,000
to fly out for, you know, 30minutes of No.
Jack Sanker (57:50):
That's what they
used to do. Right.
Danessa Watkins (57:52):
Right. That's
it. But now they're like, no.
Now we have their digitalreplica so they can just add in
that scene. They don't have topay, you know, whatever fees
that person would would chargefor coming out for a day.
Yeah.
Jack Sanker (58:04):
I mean, even going
back further, I mean, one of the
reasons why there was, like,there was, like, the NIL deals
in in, like, athletics isbecause, this I mean, this, I
think, goes back 10 years, but,like, EA Sports, which makes,
like, NCAA football, you know,whatever, was doing this with,
college athlete athletes. And itwas like, we're going to make,
(58:27):
you know, the digital stand inof Tim Tebow
Producer (58:29):
Yeah.
Jack Sanker (58:29):
And that person is
gonna be on, you know, NCAA
2,006. And, eventually, they'relike, no. You can't do that.
Like, that's you know, that thatperson who's, like, number 15
for the Florida Gators isclearly Tim Tebow. Mhmm.
You know, he looks exactly likehim. There's no name on him, but
that's that's who you'reemulating here, and that's who
(58:50):
you're trying using to sell thisgame. You have some rights to
that, and that's kind of whatstarted the ability of these
athletes now to sell their,name, image, and likeness NIL
Mhmm. And get themselves somemoney while they're in college
and everything else.
Producer (59:03):
Mhmm. And
Jack Sanker (59:04):
this is kind of
trying to reverse engineer that,
it seems like.
Danessa Watkins (59:07):
Yeah. For sure.
And and like you said, it
depends on the bargaining power.I mean, you know, that that was
the idea is that we need to makeit so that these actors can have
some power, and it's not just,yeah, you automatically need
need to assign away your rightsor you're not in this film.
Yeah.
Because, you know, I get it. Idon't think you need to be a,
like, bomb shelter person to beconcerned about having someone
(59:31):
have your your name and likenessto you know? Even though they
say we're only gonna use it forthis film. How do you know that?
So I I get it.
I understand we wanna usetechnology to our advantage,
but, yeah, it's
Jack Sanker (59:44):
less learning. Lest
you despair and, are worried
again about AI, you know, takegobbling up your jobs and
everything else, I will showshare a personal anecdote, that
it if if you just kinda playingaround with chat gpt, and I saw
people doing this online sinceit wasn't my idea. But, you
(01:00:06):
know, just just so everyoneunderstands, like, the level of
what a where I is AI is at thispoint. And I posted this to my
LinkedIn if anyone needs proofof this interaction. But I asked
Chad GPT if they'd like to playa game of rock, paper, scissors
with me, and I told I said, youstart.
And Chad GPT says, sure. I'llstart. I choose rock. What's
(01:00:27):
your move? My response, paper.
Chat GPT, paper covers rock.Nicely done. You win this round.
Ready for the next one? I say,yeah.
Go ahead. Chat gpt says,alright. Here we go. This time,
I choose scissors. What's yourmove?
I say rock. Congratulations. Iwon again. So I have a 100% win
rate against, Chat gbt, and, andthat is kind of you know, I'm
(01:00:50):
sure that people that are inthis space are probably fuming
that, you know, know that it'sbetter than that and you you
break the game, you know,whatever. And I get that, but I
will say that, like, if the,like, studios or if these
companies, like, got their way,what you would get is, like, a
crummier version of, like, youwould get the, you know, the AI
(01:01:10):
Game of Thrones, you know.
Like, you would get which isn'tgood, and you would get, like,
the AI Scarlett Johansson, youknow. Like like, that would just
be uncanny valley, you know. Wewe would not like it, I think,
long term. It would be cheaperand the Netflix folks would make
more money or whatever. But,like, we don't want this to
happen, I think.
(01:01:31):
Right? Yeah. Yeah.
Danessa Watkins (01:01:32):
No. I agree.
Jack Sanker (01:01:36):
Thanks for
listening everyone. Reminder you
could find us, spotify, ApplePodcasts, Youtube, wherever you
get your shows. We upload every2 weeks on Tuesday. You could
find us here on the firm websiteas well. If you have any you
wanna drop a line to myself orDanessa.
If you wanna complain about, myrigging the game against chat g
(01:02:01):
p t. Or if you just wanna knowanything anything about these
stories or have anything elseyou wanna ask about regarding
some stories we've covered inthe past. Otherwise, we will
talk to you in 2 weeks.