1 00:00:00,400 --> 00:00:02,560 Speaker 1: We will keep fighting, and I assure you we didn't 2 00:00:02,600 --> 00:00:03,800 Speaker 1: win today, but we will win. 3 00:00:04,320 --> 00:00:08,799 Speaker 2: Donald Trump's attorney, Alina Habbat, came out swinging last Friday 4 00:00:09,160 --> 00:00:12,600 Speaker 2: after the jury delivered a staggering verdict of eighty three 5 00:00:12,720 --> 00:00:16,799 Speaker 2: point three million dollars against the former president in advice 6 00:00:16,880 --> 00:00:19,680 Speaker 2: columnist E. Gene Carroll's defamation suit. 7 00:00:20,239 --> 00:00:24,760 Speaker 1: We will immediately appeal. We will set aside that ridiculous jury. 8 00:00:24,920 --> 00:00:26,760 Speaker 1: And I just want to remind you all of one thing. 9 00:00:26,920 --> 00:00:29,400 Speaker 1: I will continue with President Trump to fight for everybody's 10 00:00:29,440 --> 00:00:30,760 Speaker 1: First Amendment right to speak. 11 00:00:31,080 --> 00:00:33,560 Speaker 2: But in order to appeal the verdict, Trump has to 12 00:00:33,600 --> 00:00:36,720 Speaker 2: put up money equal to the judgment with cash or 13 00:00:36,720 --> 00:00:40,680 Speaker 2: a bond to maintain the status quo during the appellate process, 14 00:00:41,320 --> 00:00:44,360 Speaker 2: and with the probability of yet another verdict this week 15 00:00:44,760 --> 00:00:47,199 Speaker 2: in a case where the New York Attorney General is 16 00:00:47,280 --> 00:00:51,279 Speaker 2: asking for three hundred seventy million dollars, Trump might have 17 00:00:51,320 --> 00:00:54,200 Speaker 2: to put up close to five hundred million dollars in 18 00:00:54,280 --> 00:00:58,640 Speaker 2: order to appeal both verdicts. I have made billions of 19 00:00:58,760 --> 00:01:02,800 Speaker 2: dollars in business making deals. Of course, Trump has always 20 00:01:02,880 --> 00:01:06,240 Speaker 2: bragged about his wealth and under oath. In a deposition 21 00:01:06,280 --> 00:01:09,280 Speaker 2: in the New York Attorney General's case. He described his 22 00:01:09,360 --> 00:01:13,440 Speaker 2: stockpile of cash as being substantially an excess of four 23 00:01:13,520 --> 00:01:17,880 Speaker 2: hundred million dollars. Joining me is Bloomberg legal reporter Eric Larson, 24 00:01:18,240 --> 00:01:22,679 Speaker 2: who's covered both Trump trials. So, Eric Donald Trump's lawyer 25 00:01:22,800 --> 00:01:26,520 Speaker 2: Alina Habba is floating the idea already of a new 26 00:01:26,600 --> 00:01:31,279 Speaker 2: trial in Egene Carroll's defamation suit. What is she saying? 27 00:01:31,280 --> 00:01:32,399 Speaker 2: What are her grounds there? 28 00:01:33,080 --> 00:01:35,560 Speaker 3: Well, she says that she read in a New York 29 00:01:35,600 --> 00:01:39,119 Speaker 3: Post article after the verdict came down that Egen Carroll's 30 00:01:39,160 --> 00:01:43,600 Speaker 3: lawyer Roberta. Kaplan and Judge Lewis Kaplan had worked at 31 00:01:43,600 --> 00:01:48,440 Speaker 3: the same law firm, Paul Weiss over thirty years ago. 32 00:01:48,880 --> 00:01:53,680 Speaker 3: And as the article described, it was a mentor type relationship, 33 00:01:54,000 --> 00:01:57,760 Speaker 3: and it quoted an unnamed lawyer there to say this. 34 00:01:58,160 --> 00:02:01,440 Speaker 3: And so then Alena Hobba wrote a letter to the 35 00:02:01,520 --> 00:02:05,120 Speaker 3: judge raising this article and raising this question and seeking 36 00:02:05,160 --> 00:02:08,120 Speaker 3: more information and suggesting that it could be used in 37 00:02:08,160 --> 00:02:11,560 Speaker 3: seeking a new trial or on appeal, and you know, 38 00:02:11,720 --> 00:02:15,560 Speaker 3: raising questions about this supposed professional relationship. 39 00:02:16,440 --> 00:02:19,960 Speaker 2: So what was Roberta Caplan's response? And we should say 40 00:02:20,000 --> 00:02:22,240 Speaker 2: that she's no relation to Judge Caplan. 41 00:02:22,639 --> 00:02:23,640 Speaker 4: So ROBERTA. 42 00:02:23,720 --> 00:02:27,280 Speaker 3: Caplin filed her own letter to the court responding today 43 00:02:28,200 --> 00:02:32,119 Speaker 3: saying that this is all hogwash, saying directly to the judge, Yes, 44 00:02:32,360 --> 00:02:36,120 Speaker 3: we did overlap for less than two years at Paul Weiss. 45 00:02:36,440 --> 00:02:40,239 Speaker 3: He was a senior litigation partner, she was a litigation associate. 46 00:02:40,560 --> 00:02:44,280 Speaker 3: She started working there in I think ninety two, and 47 00:02:44,320 --> 00:02:47,000 Speaker 3: he left in ninety four to become a judge. So 48 00:02:47,760 --> 00:02:49,800 Speaker 3: she said that she doesn't remember working with him on 49 00:02:49,840 --> 00:02:52,520 Speaker 3: any case, that there was no close, you know, mentor 50 00:02:52,600 --> 00:02:55,040 Speaker 3: type relationship with him. She said that she does recall 51 00:02:55,120 --> 00:02:57,560 Speaker 3: specific partners from that period in her life at the 52 00:02:57,600 --> 00:02:58,600 Speaker 3: firm that. 53 00:02:58,520 --> 00:03:01,079 Speaker 4: She thinks of that way, and he's not one of them. 54 00:03:01,520 --> 00:03:03,600 Speaker 3: And she said that this was such a I guess 55 00:03:03,639 --> 00:03:07,680 Speaker 3: frivolous argument for Alena Habba to raise in this letter, 56 00:03:07,800 --> 00:03:09,880 Speaker 3: you know, and making it public in this way, that 57 00:03:09,960 --> 00:03:14,320 Speaker 3: she would consider seeking sanctions and really trying to shut 58 00:03:14,360 --> 00:03:17,720 Speaker 3: this down. And I should probably note that just before 59 00:03:18,400 --> 00:03:21,680 Speaker 3: we came here to do this recording, Alena Habba filed 60 00:03:21,720 --> 00:03:27,880 Speaker 3: another letter responding and basically said especially backed off and said, well, 61 00:03:27,919 --> 00:03:30,280 Speaker 3: now that I have this response, this sort of answers 62 00:03:30,320 --> 00:03:31,919 Speaker 3: the question I guess this is done. 63 00:03:32,560 --> 00:03:33,359 Speaker 4: It's resolved. 64 00:03:34,360 --> 00:03:37,920 Speaker 2: So a tempest in a teapot. That's the fastest anything 65 00:03:37,960 --> 00:03:41,640 Speaker 2: has been resolved in this trial. I want to get 66 00:03:41,680 --> 00:03:46,400 Speaker 2: your take on Hobba's clashes with the judge during the trial, 67 00:03:46,480 --> 00:03:50,520 Speaker 2: because they were frequent and often hostile. And what struck 68 00:03:50,560 --> 00:03:54,400 Speaker 2: me in particular is that Habba, who's not an experienced 69 00:03:54,400 --> 00:03:59,800 Speaker 2: trial attorney, fought about what evidence could be admitted with 70 00:04:00,120 --> 00:04:04,920 Speaker 2: this highly respected federal judge who's been on the bench decades, 71 00:04:05,880 --> 00:04:10,240 Speaker 2: making these rulings about evidence in everything from terrorist trials 72 00:04:10,280 --> 00:04:12,120 Speaker 2: to Sam bangman Fried's trial. 73 00:04:13,160 --> 00:04:15,920 Speaker 3: Well, first of all, Judge Kaplan is known for being 74 00:04:16,279 --> 00:04:19,039 Speaker 3: pretty no nonsense. He doesn't want to take anything from 75 00:04:19,480 --> 00:04:22,479 Speaker 3: any gruffam anyone, and if he makes a decision and 76 00:04:22,520 --> 00:04:25,920 Speaker 3: says it's final, he doesn't want anyone going beyond that, 77 00:04:26,520 --> 00:04:28,719 Speaker 3: And of course he's very strict about his rules in court. 78 00:04:28,760 --> 00:04:32,520 Speaker 3: You know, Trump's campaign spokesman Kevin Chum was kicked out 79 00:04:32,560 --> 00:04:36,400 Speaker 3: of the trial when his phone went off. So anyway, 80 00:04:36,600 --> 00:04:39,160 Speaker 3: on the last day of trial, before the jury came in, 81 00:04:39,680 --> 00:04:43,320 Speaker 3: the judge was having some last minute arguments about the 82 00:04:43,360 --> 00:04:46,040 Speaker 3: closing arguments, what they were going to show the jury, 83 00:04:46,440 --> 00:04:49,440 Speaker 3: and the defense was upset that a certain slide was 84 00:04:49,480 --> 00:04:52,799 Speaker 3: being ordered out of the closing arguments was a compilation 85 00:04:52,880 --> 00:04:56,840 Speaker 3: of different tweets that they had made their argument that 86 00:04:57,000 --> 00:05:00,600 Speaker 3: Egen Carroll was attacked before Trump issued these defamatory statements. 87 00:05:00,800 --> 00:05:03,760 Speaker 3: So anyway, the judge said, no, these aren't properly in evidence. 88 00:05:03,800 --> 00:05:05,800 Speaker 3: You're not going to use this. The slide is out, 89 00:05:05,960 --> 00:05:07,920 Speaker 3: period done. And she got up and said I have 90 00:05:08,080 --> 00:05:11,040 Speaker 3: to say something, and the jet said, no, you won't. 91 00:05:11,440 --> 00:05:13,280 Speaker 3: You're very close to me spending some time in the 92 00:05:13,360 --> 00:05:15,480 Speaker 3: lock up is how to sit down, and she did 93 00:05:15,720 --> 00:05:17,560 Speaker 3: and she did, and she and Trump looked at each 94 00:05:17,560 --> 00:05:20,280 Speaker 3: other and they were clearly fuming, and they were not 95 00:05:20,400 --> 00:05:21,320 Speaker 3: happy going. 96 00:05:21,279 --> 00:05:23,720 Speaker 2: To the verdict. And it's sort of unusual to me 97 00:05:23,800 --> 00:05:26,000 Speaker 2: because usually by this time in a case like this, 98 00:05:26,200 --> 00:05:29,200 Speaker 2: a high profile case, you hear from one or two 99 00:05:29,320 --> 00:05:31,800 Speaker 2: of the jurors. They decide to talk about what they've done. 100 00:05:32,160 --> 00:05:34,640 Speaker 2: In this case, they've been as silent as Trump has 101 00:05:34,760 --> 00:05:38,960 Speaker 2: been about the verdict. Another astonishing fact. So I guess 102 00:05:39,000 --> 00:05:41,080 Speaker 2: they took the judge's advice right. 103 00:05:41,160 --> 00:05:43,920 Speaker 3: Well. So this was a rare anonymous jury to begin with, 104 00:05:44,279 --> 00:05:49,279 Speaker 3: So because of the risk of essentially Trump supporters threatening 105 00:05:49,640 --> 00:05:52,039 Speaker 3: these jurors. The judge said that it would be an 106 00:05:52,080 --> 00:05:55,040 Speaker 3: anonymous jury, some sort of the thing you might expect 107 00:05:55,080 --> 00:05:57,160 Speaker 3: from like a mafia case or something like that, or 108 00:05:57,240 --> 00:05:58,000 Speaker 3: terrorism case. 109 00:05:58,400 --> 00:06:00,480 Speaker 4: But of course, during the what are your process and 110 00:06:00,560 --> 00:06:01,680 Speaker 4: jury questioning. 111 00:06:01,360 --> 00:06:04,120 Speaker 3: They you know, took certain steps to prevent people like 112 00:06:04,240 --> 00:06:07,000 Speaker 3: US reporters from being able to piece together who they were. 113 00:06:07,440 --> 00:06:10,719 Speaker 3: But after the trial was over, before he dismiss the jury, 114 00:06:10,800 --> 00:06:14,200 Speaker 3: he said, you are now free to identify yourselves to 115 00:06:14,279 --> 00:06:17,320 Speaker 3: the public. What you can't do is identify each other. 116 00:06:17,400 --> 00:06:21,080 Speaker 3: He's like, do not tell anyone about your fellow jurors. 117 00:06:21,160 --> 00:06:22,039 Speaker 3: And he's like, and if you. 118 00:06:22,040 --> 00:06:25,599 Speaker 4: Want my advice, never ever tell anyone you were involved 119 00:06:25,600 --> 00:06:26,160 Speaker 4: in this case. 120 00:06:26,960 --> 00:06:29,120 Speaker 2: It's sort of chilling to hear that warning from a 121 00:06:29,200 --> 00:06:33,040 Speaker 2: federal judge. Now Trump is going to appeal both of 122 00:06:33,120 --> 00:06:37,320 Speaker 2: the eging Carol verdicts. In Carol VERDICTX, so that entails 123 00:06:37,400 --> 00:06:39,880 Speaker 2: more than just putting papers into the court. You have 124 00:06:39,960 --> 00:06:43,000 Speaker 2: to put up money equal to the judgment amount through 125 00:06:43,040 --> 00:06:46,160 Speaker 2: cash or a bond. So what did he do in 126 00:06:46,279 --> 00:06:49,680 Speaker 2: regard to the first Carol case where the award was 127 00:06:49,800 --> 00:06:50,840 Speaker 2: five million dollars? 128 00:06:51,400 --> 00:06:54,520 Speaker 3: He put up five point five million dollars in cash. 129 00:06:55,000 --> 00:06:57,120 Speaker 3: So you know, I was told by his lawyer in 130 00:06:57,200 --> 00:07:00,520 Speaker 3: that trial, Joe Tacopina, that it was simply a matter 131 00:07:00,640 --> 00:07:02,960 Speaker 3: of money. You know, it's cheaper to put up your 132 00:07:02,960 --> 00:07:05,600 Speaker 3: own cash than to use a bondsman where you're paying 133 00:07:05,680 --> 00:07:10,280 Speaker 3: to use someone else's cash. So Trump obviously is known 134 00:07:10,360 --> 00:07:13,240 Speaker 3: to have hundreds of millions of dollars in cash. I 135 00:07:13,280 --> 00:07:17,520 Speaker 3: think even the Bloomberg Billionaire's Index own estimation of Trump's 136 00:07:17,600 --> 00:07:20,960 Speaker 3: net wealth of three point one billion dollars includes six 137 00:07:21,080 --> 00:07:23,920 Speaker 3: hundred million dollars in liquid assets. And as we know, 138 00:07:24,080 --> 00:07:27,080 Speaker 3: Trump testified under oath that he has more than four 139 00:07:27,160 --> 00:07:31,080 Speaker 3: hundred million dollars in cash. So I would expect him 140 00:07:31,080 --> 00:07:33,480 Speaker 3: to put up cash for this appeal. 141 00:07:34,160 --> 00:07:37,080 Speaker 2: That is a lot of cash. But you think he 142 00:07:37,160 --> 00:07:39,600 Speaker 2: won't put up an appeal bond because he'd lose money 143 00:07:39,680 --> 00:07:39,880 Speaker 2: on it. 144 00:07:40,440 --> 00:07:42,280 Speaker 3: I mean, I'm just going off of what he did 145 00:07:42,320 --> 00:07:44,880 Speaker 3: in the last trial, where he would look at, if 146 00:07:44,920 --> 00:07:49,040 Speaker 3: you have the money, why pay to use someone else's money, 147 00:07:49,200 --> 00:07:51,480 Speaker 3: Because either way you're going if he loses. 148 00:07:51,160 --> 00:07:53,640 Speaker 4: He's going to have to pay that money. So I 149 00:07:53,680 --> 00:07:55,360 Speaker 4: guess if I had the money, I would. 150 00:07:57,040 --> 00:08:01,040 Speaker 2: He's been fundraising off his legal trump for some time. 151 00:08:01,720 --> 00:08:04,600 Speaker 3: My understanding is that he does raise millions of dollars 152 00:08:04,680 --> 00:08:07,800 Speaker 3: for his campaign, right this is for money that's not 153 00:08:08,000 --> 00:08:12,120 Speaker 3: necessarily being used for his defense. But he has been 154 00:08:12,240 --> 00:08:15,320 Speaker 3: using money for legal expenses, because if a candidate can 155 00:08:15,360 --> 00:08:18,040 Speaker 3: show that a case is related to something having to 156 00:08:18,120 --> 00:08:21,280 Speaker 3: do with his candidacy or his presidency in this case, 157 00:08:21,480 --> 00:08:24,160 Speaker 3: as some of these cases do, that he could use 158 00:08:24,360 --> 00:08:26,320 Speaker 3: some of that money for legal fees. I don't know 159 00:08:26,400 --> 00:08:30,040 Speaker 3: that that would translate into this Egan Carroll case or 160 00:08:30,080 --> 00:08:33,559 Speaker 3: even the New York Attorney General civil fraud case. But 161 00:08:34,160 --> 00:08:37,440 Speaker 3: he does also have packs these super political action committees. 162 00:08:37,960 --> 00:08:40,240 Speaker 3: Those are not supposed to coordinate in any way with 163 00:08:40,320 --> 00:08:43,640 Speaker 3: a candidate. Though it's unclear that it's such a gray 164 00:08:43,760 --> 00:08:45,840 Speaker 3: area from these experts I talk to. I'm not an 165 00:08:45,880 --> 00:08:48,480 Speaker 3: expert on those, but the experts I do talk to 166 00:08:49,080 --> 00:08:50,719 Speaker 3: say that it's a real gray area, and that the 167 00:08:50,800 --> 00:08:54,800 Speaker 3: Federal Election Commission does not do a lot of enforcement 168 00:08:55,000 --> 00:08:57,800 Speaker 3: in this area, and that if anything, they've sort of 169 00:08:57,880 --> 00:09:01,120 Speaker 3: chipped away a little bit at enforcements to be so. 170 00:09:01,200 --> 00:09:04,160 Speaker 2: Then obviously the damages can't be paid from that. Not 171 00:09:04,320 --> 00:09:07,400 Speaker 2: that any of these funds have enough money to cover 172 00:09:07,600 --> 00:09:08,360 Speaker 2: these damages. 173 00:09:08,880 --> 00:09:11,280 Speaker 3: We know that the Attorney General is seeking three hundred 174 00:09:11,280 --> 00:09:15,440 Speaker 3: and seventy million dollars in this civil fraud case, plus interest, 175 00:09:16,320 --> 00:09:19,439 Speaker 3: which could put it over four hundred million dollars. Honestly, 176 00:09:19,480 --> 00:09:23,520 Speaker 3: and then you add on the Egen Carrol verdicts. It's 177 00:09:23,559 --> 00:09:26,000 Speaker 3: a huge amount of money. And even if you were 178 00:09:26,160 --> 00:09:30,040 Speaker 3: able to somehow use donated money for that, that's money 179 00:09:30,120 --> 00:09:32,839 Speaker 3: that is now being taken away from his effort to 180 00:09:32,920 --> 00:09:36,360 Speaker 3: be elected. And also it might be a little bit 181 00:09:36,440 --> 00:09:42,320 Speaker 3: more of a difficult cell potentially to donors who are 182 00:09:42,559 --> 00:09:47,360 Speaker 3: donating to a campaign a cause. MAGA is a lot 183 00:09:47,520 --> 00:09:50,640 Speaker 3: more than Trump's legal troubles, right, It's supposed to. 184 00:09:51,040 --> 00:09:54,400 Speaker 2: Some days it doesn't seem like that. But as you mentioned, 185 00:09:54,440 --> 00:09:57,319 Speaker 2: the Bloomberg Billionaires Index has him at a networth of 186 00:09:57,360 --> 00:10:00,680 Speaker 2: three point one billion, and that's the most and least 187 00:10:00,800 --> 00:10:03,439 Speaker 2: leveraged it at any point in the past decade. So 188 00:10:03,640 --> 00:10:06,439 Speaker 2: his assets, as you've written about, have been appreciating. 189 00:10:07,280 --> 00:10:10,079 Speaker 3: Yeah, I mean, there's no question that he has some 190 00:10:10,320 --> 00:10:13,240 Speaker 3: very valuable assets that they've been appreciating, and that he's 191 00:10:13,320 --> 00:10:16,880 Speaker 3: a very wealthy man. In fact, that's exactly the argument 192 00:10:17,000 --> 00:10:19,959 Speaker 3: that Egan Carroll was making to try to get the 193 00:10:20,040 --> 00:10:23,079 Speaker 3: jury to hit him with a significant punitive damages award, 194 00:10:23,160 --> 00:10:27,360 Speaker 3: which which it did. So, you know, there's no suggestion 195 00:10:27,559 --> 00:10:30,640 Speaker 3: that Trump is going to be going broke here. And 196 00:10:30,840 --> 00:10:34,719 Speaker 3: in fact, in the last few years alone, you know, 197 00:10:34,800 --> 00:10:38,520 Speaker 3: since this lawsuit was you know, filed, the New York lawsuit, 198 00:10:38,640 --> 00:10:42,720 Speaker 3: his assets have gone up almost a half billion dollars. 199 00:10:43,440 --> 00:10:46,320 Speaker 3: So he was you know, at a round two point 200 00:10:46,400 --> 00:10:49,599 Speaker 3: five point six and now three point one that it 201 00:10:49,760 --> 00:10:52,640 Speaker 3: shot up, you know, in the you know, since he 202 00:10:52,960 --> 00:10:53,800 Speaker 3: his presidency. 203 00:10:53,960 --> 00:10:55,880 Speaker 4: So he's done very well for himself. 204 00:10:57,200 --> 00:11:00,120 Speaker 3: And even though the New York state lawsuit qu U 205 00:11:00,679 --> 00:11:05,560 Speaker 3: of inflating his assets wildly for years, as much as 206 00:11:05,600 --> 00:11:08,679 Speaker 3: three point six billion dollars a year, he actually does 207 00:11:08,800 --> 00:11:12,679 Speaker 3: have money regardless of that. But the point of the 208 00:11:12,720 --> 00:11:14,880 Speaker 3: New York case is that he was able to get 209 00:11:15,000 --> 00:11:17,920 Speaker 3: much lower interest rates on hundreds of millions of dollars 210 00:11:18,080 --> 00:11:21,079 Speaker 3: loans for over a decade by saying that he was 211 00:11:21,120 --> 00:11:23,920 Speaker 3: at worth way more than he actually was, even if 212 00:11:23,960 --> 00:11:24,600 Speaker 3: he did have money. 213 00:11:24,880 --> 00:11:27,520 Speaker 2: And we'll be waiting for the judge's decision in the 214 00:11:27,600 --> 00:11:30,079 Speaker 2: New York fraud trial, he promised he would try to 215 00:11:30,120 --> 00:11:34,319 Speaker 2: get it in by January thirty, first tomorrow. Thanks so much, Eric. 216 00:11:34,640 --> 00:11:38,640 Speaker 2: That's Bloomberg legal reporter Eric Larson. Coming up next. The 217 00:11:38,840 --> 00:11:42,200 Speaker 2: estate of George Carlin is suing over a comedy special 218 00:11:42,480 --> 00:11:46,559 Speaker 2: purporting to be an AI generated impression of the late comedian. 219 00:11:47,160 --> 00:11:49,640 Speaker 2: I'm June gross. When you're listening to Bloomberg. 220 00:11:55,240 --> 00:11:56,319 Speaker 4: Thank you, thank you. 221 00:11:56,920 --> 00:11:59,360 Speaker 5: I like to start off with a heartfelt apology. I'm 222 00:11:59,400 --> 00:12:01,160 Speaker 5: sorry it took me so long to come out with 223 00:12:01,280 --> 00:12:02,440 Speaker 5: new material. 224 00:12:02,040 --> 00:12:03,679 Speaker 2: But I do have a pretty good excuse. 225 00:12:04,040 --> 00:12:04,680 Speaker 5: I was dead. 226 00:12:08,200 --> 00:12:13,000 Speaker 2: When podcasters Will Sasso and Chad Coulchin released their hour 227 00:12:13,120 --> 00:12:17,720 Speaker 2: long comedy special entitled George Carlin I'm Glad I'm Dead, 228 00:12:18,200 --> 00:12:21,760 Speaker 2: they billed it as AI generated created by an AI 229 00:12:22,000 --> 00:12:26,319 Speaker 2: trained on decades of the late comedians material. So Carlin's 230 00:12:26,440 --> 00:12:29,719 Speaker 2: estate sued the duo, citing the right of publicity and 231 00:12:29,880 --> 00:12:34,959 Speaker 2: copyright infringement. But now the podcasters are claiming that, in fact, 232 00:12:35,280 --> 00:12:38,400 Speaker 2: the special was actually written by a human. One of 233 00:12:38,440 --> 00:12:42,480 Speaker 2: the podcasters changing up what's at stake in the lawsuit. 234 00:12:43,000 --> 00:12:46,720 Speaker 2: If it sounds confusing, it is, but it's happened before 235 00:12:47,200 --> 00:12:50,840 Speaker 2: joining me is Zien Tang, a professor at UCLA Law School. 236 00:12:51,640 --> 00:12:54,280 Speaker 2: Let's start with the first iteration of this, which was 237 00:12:54,360 --> 00:12:57,160 Speaker 2: supposed to be AI generated. Tell us about that. 238 00:12:57,760 --> 00:13:00,880 Speaker 5: So the claim that was at the center of the 239 00:13:01,040 --> 00:13:06,839 Speaker 5: complaints was that the comedians Will Sasso and Chad Coulstin 240 00:13:07,720 --> 00:13:13,920 Speaker 5: had fed thousands of hours of copyrighted material from the 241 00:13:14,080 --> 00:13:20,959 Speaker 5: comedian now deceased, George Carland into an AI model, and 242 00:13:21,160 --> 00:13:25,120 Speaker 5: then once that AI model had been trained on all 243 00:13:25,200 --> 00:13:30,559 Speaker 5: that Carlan material, it was able to fit out or 244 00:13:30,720 --> 00:13:37,480 Speaker 5: generate a entirely new comedy routine based off of Carlin's jokes. 245 00:13:38,040 --> 00:13:41,440 Speaker 2: And in the lawsuit by Carlin's estate, they're making two 246 00:13:41,520 --> 00:13:45,599 Speaker 2: different claims, one based on copyright and the other on 247 00:13:45,960 --> 00:13:48,800 Speaker 2: the illegal use of Carlin's name and likeness. 248 00:13:49,640 --> 00:13:51,880 Speaker 5: Well, so it would be a copyright claim in the 249 00:13:51,960 --> 00:13:55,599 Speaker 5: sense that there was a lot of copyrighted content that 250 00:13:56,520 --> 00:14:01,240 Speaker 5: was fed into the Large Life which model the LM, 251 00:14:01,880 --> 00:14:05,520 Speaker 5: which resulted in a copy of the material being made 252 00:14:05,840 --> 00:14:09,280 Speaker 5: while the LLM was being trained. So that's one claim, 253 00:14:09,640 --> 00:14:13,280 Speaker 5: and then the right of publicity claim is based off 254 00:14:13,400 --> 00:14:17,880 Speaker 5: of the replication of the comedian's voice. You know, are 255 00:14:18,000 --> 00:14:23,400 Speaker 5: both claims that have been lodged against AI or generative 256 00:14:23,480 --> 00:14:28,640 Speaker 5: AI companies for the past year, both on the training data, 257 00:14:28,920 --> 00:14:33,360 Speaker 5: with a number of similar lawsuits, many of them class actions, 258 00:14:33,920 --> 00:14:37,040 Speaker 5: have been making the same claims with regard to the 259 00:14:37,160 --> 00:14:41,920 Speaker 5: training of llms based on copyrighted books, for example, or 260 00:14:42,040 --> 00:14:46,880 Speaker 5: copyrighted comedy routines. There's, for example, one currently pending in 261 00:14:47,040 --> 00:14:51,600 Speaker 5: federal court filed by the comedian Sarah Silverman, representing herself 262 00:14:51,680 --> 00:14:55,280 Speaker 5: in an entire class of plaintiffs. The complaint alleges whose 263 00:14:55,320 --> 00:14:59,280 Speaker 5: material have all been copied into the LM and then 264 00:14:59,440 --> 00:15:04,200 Speaker 5: on the write a publicity claim. There's been similar allegations 265 00:15:04,240 --> 00:15:08,920 Speaker 5: made against ais, such as the Drake Weekend mashup that 266 00:15:09,120 --> 00:15:13,080 Speaker 5: went viral a few months ago, in which the AI 267 00:15:13,240 --> 00:15:17,680 Speaker 5: basically is trained on a celebrity's voice and then is 268 00:15:17,800 --> 00:15:22,040 Speaker 5: able to generate an entirely new work or new song 269 00:15:22,560 --> 00:15:23,760 Speaker 5: but using that voice. 270 00:15:24,840 --> 00:15:29,240 Speaker 2: Now have any of these lawsuits progressed to the point 271 00:15:29,280 --> 00:15:34,120 Speaker 2: where there's been a legal opinion about whether this is 272 00:15:34,640 --> 00:15:35,960 Speaker 2: a violation of copyright. 273 00:15:36,680 --> 00:15:40,400 Speaker 5: So no, So there have been some courts that have 274 00:15:41,080 --> 00:15:46,680 Speaker 5: issued opinions that have basically denied or dismissed certain claims 275 00:15:46,960 --> 00:15:52,120 Speaker 5: filed by the plaintiffs, but certainly no opinion issued by 276 00:15:52,200 --> 00:15:56,280 Speaker 5: a court that has definitively answered the question of whether 277 00:15:56,400 --> 00:16:00,480 Speaker 5: or not the use of copyrighted material as trained data 278 00:16:00,600 --> 00:16:05,400 Speaker 5: for the AIS constitutes copyright infringement, or and even if 279 00:16:05,560 --> 00:16:08,560 Speaker 5: it is technically copyright infringement in the sense that there 280 00:16:08,640 --> 00:16:12,080 Speaker 5: is a copy being made when the material is ingested, 281 00:16:12,560 --> 00:16:18,160 Speaker 5: whether that copying is protected by the defense of fair use. 282 00:16:18,640 --> 00:16:21,720 Speaker 2: You study this, you teach this. What's your opinion. 283 00:16:22,520 --> 00:16:25,680 Speaker 5: I think it's a deeply complicated issue. I certainly think 284 00:16:25,800 --> 00:16:28,920 Speaker 5: that there is a line of cases that have preceded 285 00:16:29,000 --> 00:16:32,480 Speaker 5: this based on, for example, whether or not it is 286 00:16:32,680 --> 00:16:37,520 Speaker 5: fair use or Google to scan massive amounts of copyrighted 287 00:16:37,560 --> 00:16:41,840 Speaker 5: books in order to create their Google Books function, which 288 00:16:42,240 --> 00:16:44,480 Speaker 5: I think a lot of US use, in which you 289 00:16:44,560 --> 00:16:48,120 Speaker 5: can search within books and it'll return snippets of in 290 00:16:48,240 --> 00:16:52,120 Speaker 5: many cases copyrighted books, and it's helpful for researchers to 291 00:16:52,200 --> 00:16:54,320 Speaker 5: be able to search within books, many of which are 292 00:16:54,400 --> 00:16:57,800 Speaker 5: out of print. Now, those prior decisions have held that 293 00:16:58,080 --> 00:17:02,359 Speaker 5: such uses are fair even if their technical copyright infringements. 294 00:17:02,680 --> 00:17:06,360 Speaker 5: They're still protected by fair use because they are technologically 295 00:17:06,440 --> 00:17:11,320 Speaker 5: transformative uses of copyrighted works, because they are using the 296 00:17:11,400 --> 00:17:14,560 Speaker 5: copyrighted works for a wholly different purpose. I think in 297 00:17:14,680 --> 00:17:18,080 Speaker 5: this case similar arguments could certainly be made, and I 298 00:17:18,119 --> 00:17:22,480 Speaker 5: could see certain judges making that determination based on the 299 00:17:22,560 --> 00:17:26,600 Speaker 5: transformative nature of what AI does and the fact that 300 00:17:26,760 --> 00:17:29,360 Speaker 5: maybe what you would argue is true to the name 301 00:17:29,440 --> 00:17:33,439 Speaker 5: training data, the LLM, the large Language Model, is simply 302 00:17:33,600 --> 00:17:39,760 Speaker 5: learning from the copyrighted material, not to wholly reproduce the 303 00:17:39,840 --> 00:17:44,160 Speaker 5: copyrighted material on the output side, but instead to create 304 00:17:44,280 --> 00:17:48,399 Speaker 5: a wholly new, transformative work. I think that argument is 305 00:17:48,520 --> 00:17:52,439 Speaker 5: somewhat complicated by recent lawsuits, including one that has been 306 00:17:52,480 --> 00:17:56,760 Speaker 5: filed against the New York Times, which alleges that even 307 00:17:56,840 --> 00:18:01,720 Speaker 5: on the output side, apparently through the prompt engineering that 308 00:18:02,080 --> 00:18:05,760 Speaker 5: the lawyers for the Times did, what they were able 309 00:18:05,800 --> 00:18:09,760 Speaker 5: to get the AI to do was to generate entire 310 00:18:10,840 --> 00:18:15,240 Speaker 5: news articles that replicated, word for words New York Times 311 00:18:15,440 --> 00:18:18,879 Speaker 5: articles that have been published. And so if that's true, 312 00:18:19,600 --> 00:18:23,639 Speaker 5: then certainly you would say, well, the work that's generated 313 00:18:23,760 --> 00:18:30,399 Speaker 5: by the AI is a direct infringement, and moreover, maybe 314 00:18:30,520 --> 00:18:35,440 Speaker 5: even the ingestion of the copyrighted work into the language 315 00:18:35,480 --> 00:18:39,679 Speaker 5: model is also an infringement that is not protected by 316 00:18:39,760 --> 00:18:44,000 Speaker 5: fair use because it is ingested for the purpose of 317 00:18:44,440 --> 00:18:49,600 Speaker 5: directly competing with the plaintiffs the author's income streams because 318 00:18:49,720 --> 00:18:53,160 Speaker 5: it is substitutive of the plaintiff's works and is likely 319 00:18:53,359 --> 00:18:57,439 Speaker 5: to harm the market for plaintiff's works. And I certainly 320 00:18:57,520 --> 00:19:00,480 Speaker 5: think that another argument that plaintiffs might use is that 321 00:19:00,720 --> 00:19:06,560 Speaker 5: currently there are active licensing discussions going on between content 322 00:19:06,640 --> 00:19:11,760 Speaker 5: holders and AI companies to try to license large amounts 323 00:19:11,760 --> 00:19:15,720 Speaker 5: of this material for training data purposes. And if that's true, 324 00:19:16,280 --> 00:19:19,359 Speaker 5: a court might say, point in to a long line 325 00:19:19,400 --> 00:19:23,760 Speaker 5: of cases, that this is a licensing market that plaintiffs 326 00:19:24,320 --> 00:19:28,399 Speaker 5: has typically been able to monetize and are currently monetizing 327 00:19:28,560 --> 00:19:31,720 Speaker 5: with these licensing agreements that have been entered into, and 328 00:19:31,840 --> 00:19:36,440 Speaker 5: so therefore the unpaid for use of all this copyrighted 329 00:19:36,520 --> 00:19:42,440 Speaker 5: material in training data would constitute a harm to the 330 00:19:42,480 --> 00:19:45,960 Speaker 5: plaintiff's licensing market, and therefore it's not fair use. 331 00:19:46,359 --> 00:19:50,920 Speaker 2: There's a twist to the case because after the lawsuit 332 00:19:51,160 --> 00:19:56,280 Speaker 2: was filed, a spokeswoman for the podcasters said this was 333 00:19:56,359 --> 00:20:00,760 Speaker 2: not actually created by AI. Quote it's a fiction podcast 334 00:20:00,960 --> 00:20:05,560 Speaker 2: created by two human beings, Will Sasso and Chad Culchin. 335 00:20:06,119 --> 00:20:09,520 Speaker 2: The YouTube video I'm Glad I'm Dead was completely written 336 00:20:09,640 --> 00:20:15,040 Speaker 2: by Chad, so surprise surprise, they're saying it's not AI. 337 00:20:16,400 --> 00:20:21,119 Speaker 5: Yes, So if that's true, then of course, if the 338 00:20:21,600 --> 00:20:27,560 Speaker 5: material was entirely written by Chad, and if the voice 339 00:20:27,800 --> 00:20:32,080 Speaker 5: is just an imitation, then so focusing first on the 340 00:20:32,320 --> 00:20:35,200 Speaker 5: on the copyright claims, so then the copyright claim is 341 00:20:35,800 --> 00:20:39,000 Speaker 5: gone because you have fully original material that's been written 342 00:20:39,040 --> 00:20:42,560 Speaker 5: by the comedian himself. And then on the right of publicity. 343 00:20:42,680 --> 00:20:46,359 Speaker 5: The voice imitation the thing that has always complicated this 344 00:20:46,640 --> 00:20:49,679 Speaker 5: right of publicity claim. Even if it were an AI 345 00:20:49,920 --> 00:20:53,320 Speaker 5: that was actually spitting out towards Carlin's voice and not 346 00:20:53,480 --> 00:20:57,160 Speaker 5: some voice imitation, the right of publicity claim was always 347 00:20:57,200 --> 00:21:00,480 Speaker 5: complicated by the fact that this is a comedy special 348 00:21:00,640 --> 00:21:04,040 Speaker 5: This is an expressive work, and right of publicity claims 349 00:21:04,480 --> 00:21:08,439 Speaker 5: typically have found that such expressive works are protected by 350 00:21:08,480 --> 00:21:11,960 Speaker 5: the First Amendment. Right publicity is slightly different from copyright, 351 00:21:12,080 --> 00:21:15,000 Speaker 5: but both share this idea right that there are certain 352 00:21:15,160 --> 00:21:18,920 Speaker 5: uses that are defensible, even if we might consider them 353 00:21:19,040 --> 00:21:23,480 Speaker 5: technical uses of a celebrity's image or technically copying of 354 00:21:23,680 --> 00:21:27,120 Speaker 5: copyrighted content. So in the right of publicity context, it's 355 00:21:27,240 --> 00:21:30,320 Speaker 5: clear that the use of a celebrity's image or the 356 00:21:30,440 --> 00:21:33,000 Speaker 5: use of a celebrity's voice in a commercial is a 357 00:21:33,080 --> 00:21:35,760 Speaker 5: violation of a celebrities right of publicity. But when we're 358 00:21:35,800 --> 00:21:39,160 Speaker 5: talking about something that's an expressive work, like a comedy routine, 359 00:21:39,200 --> 00:21:42,240 Speaker 5: for example, then most courts have help. But that is 360 00:21:42,640 --> 00:21:45,919 Speaker 5: expression that is protected by the First Amendment, that comedians 361 00:21:45,960 --> 00:21:49,680 Speaker 5: should be able to, for example, make them commentary about 362 00:21:49,760 --> 00:21:55,000 Speaker 5: celebrities by imitating them, by maybe even exactly reproducing their voice, 363 00:21:55,520 --> 00:22:00,480 Speaker 5: by exactly reproducing their image on some type of already 364 00:22:00,640 --> 00:22:05,199 Speaker 5: such as a newspaper parody that uses the celebrities image. 365 00:22:05,480 --> 00:22:08,520 Speaker 5: So expressive works get really broadly way under a write 366 00:22:08,520 --> 00:22:11,440 Speaker 5: of publicity law, and that's why the writer of publicity 367 00:22:11,520 --> 00:22:13,640 Speaker 5: claim is always going to be much harder to indicate 368 00:22:14,160 --> 00:22:15,280 Speaker 5: than the copyright claim. 369 00:22:15,520 --> 00:22:17,880 Speaker 2: So going back to the copyright claim for a moment, 370 00:22:17,960 --> 00:22:21,560 Speaker 2: I just want you to explain why you think that 371 00:22:21,680 --> 00:22:25,240 Speaker 2: there's not a copyright problem if it was written by 372 00:22:25,800 --> 00:22:30,200 Speaker 2: the comedians themselves, and how artists can look to other 373 00:22:30,359 --> 00:22:31,440 Speaker 2: artists for inspiration. 374 00:22:32,119 --> 00:22:37,040 Speaker 5: Yeah, so copyright law protects the original expression, but it 375 00:22:37,119 --> 00:22:41,480 Speaker 5: does not protect ideas. And so that's why artists being 376 00:22:41,600 --> 00:22:45,280 Speaker 5: inspired by other artists has existed since the beginning of time. Right, 377 00:22:45,359 --> 00:22:48,960 Speaker 5: you take an idea that's in some other work. The 378 00:22:49,040 --> 00:22:51,760 Speaker 5: classic example is the rom com or something like that. 379 00:22:51,920 --> 00:22:54,960 Speaker 5: There have been so many rom coms that has been made, 380 00:22:55,200 --> 00:22:58,800 Speaker 5: but I keep watching them, yes, exactly, and they all 381 00:22:58,840 --> 00:23:02,240 Speaker 5: contain the sort of same lying idea about you know, 382 00:23:02,560 --> 00:23:05,640 Speaker 5: a starcross relationship that then you know, has a lot 383 00:23:05,680 --> 00:23:08,520 Speaker 5: of comedic foibles. Eventually the characters end up at the end. 384 00:23:08,600 --> 00:23:08,679 Speaker 1: Right. 385 00:23:08,760 --> 00:23:12,400 Speaker 5: That's all unprotectable ideas, and folks are free to build 386 00:23:12,440 --> 00:23:16,920 Speaker 5: off of those ideas and generate their own protectable expression. So, 387 00:23:17,040 --> 00:23:20,680 Speaker 5: of course, if the claimate issue, assuming that there was 388 00:23:20,760 --> 00:23:24,200 Speaker 5: no AI in which it had copied large amounts of 389 00:23:25,040 --> 00:23:30,200 Speaker 5: the actual George Carlin copyrighted content, but assuming that the 390 00:23:30,280 --> 00:23:35,280 Speaker 5: comediant himself wrote the skits, then even if it's in 391 00:23:35,400 --> 00:23:38,560 Speaker 5: the style of or the same manner of joke, so 392 00:23:38,760 --> 00:23:42,199 Speaker 5: long as the expression is wholly different, so long as 393 00:23:42,280 --> 00:23:46,680 Speaker 5: the comedic routine is not an exact duplication word for 394 00:23:46,840 --> 00:23:51,560 Speaker 5: word or very close paraphrasing even of a George Carlin routine, 395 00:23:52,080 --> 00:23:54,719 Speaker 5: but instead maybe takes the idea of a George Carlin 396 00:23:54,840 --> 00:23:58,040 Speaker 5: joke and expands upon it, takes the style of his 397 00:23:58,200 --> 00:24:01,080 Speaker 5: comedic humor and expands upon it. That is all fair 398 00:24:01,160 --> 00:24:03,639 Speaker 5: game under a copyright law, and you wouldn't even need 399 00:24:03,760 --> 00:24:06,440 Speaker 5: to bring in the fair youth doctrine at all. You 400 00:24:06,480 --> 00:24:10,240 Speaker 5: would just say, I'm only taking the unprotectable ideas, I'm 401 00:24:10,320 --> 00:24:15,520 Speaker 5: not copying the protectable expression of George Carlin's comedy routine. 402 00:24:15,800 --> 00:24:18,480 Speaker 2: Coming up next on the Bloomberg Lawn Show, I'll continue 403 00:24:18,560 --> 00:24:23,080 Speaker 2: this conversation with UCLA Law professor Zien Tang. So why 404 00:24:23,200 --> 00:24:26,600 Speaker 2: isn't the lawsuit being dropped? Remember, you can always get 405 00:24:26,640 --> 00:24:29,760 Speaker 2: the latest legal news by listening to our Bloomberg Law podcast. 406 00:24:30,400 --> 00:24:33,800 Speaker 2: You can find them on Apple Podcasts, Spotify and at 407 00:24:33,880 --> 00:24:38,479 Speaker 2: Bloomberg dot com, slash podcast Slash Law. I'm June Grosso 408 00:24:38,560 --> 00:24:41,880 Speaker 2: and you're listening to Bloomberg. The State of George Carlin 409 00:24:41,960 --> 00:24:46,040 Speaker 2: is suing two podcasters over an hour long comedy special 410 00:24:46,240 --> 00:24:50,040 Speaker 2: purporting to be an AI generated impression of the late comedian. 411 00:24:50,600 --> 00:24:53,600 Speaker 2: Only it turns out the podcasters now say that, in 412 00:24:53,760 --> 00:24:57,520 Speaker 2: fact the special was actually written by a human, and 413 00:24:57,680 --> 00:25:00,680 Speaker 2: that can make a big difference to the claims the lawsuit. 414 00:25:01,000 --> 00:25:04,440 Speaker 2: I've been talking to Professor Zen Tang of UCLA Law School, 415 00:25:04,960 --> 00:25:07,760 Speaker 2: so let me ask you this. Then, the lawsuit argues 416 00:25:08,160 --> 00:25:11,919 Speaker 2: that the special quote has no comedic or creative value 417 00:25:12,080 --> 00:25:16,639 Speaker 2: absent itself proclaimed connection with George Carlin, and it doesn't 418 00:25:16,800 --> 00:25:21,119 Speaker 2: satirize him as a performer or offer an independent critique 419 00:25:21,240 --> 00:25:24,359 Speaker 2: of society. How does that play into what we've been 420 00:25:24,400 --> 00:25:25,080 Speaker 2: talking about. 421 00:25:25,640 --> 00:25:28,960 Speaker 5: Yeah, so I think they are trying to preempt the 422 00:25:29,200 --> 00:25:33,720 Speaker 5: argument that this is protected by either copyrights fair youth doctrine, 423 00:25:34,160 --> 00:25:38,840 Speaker 5: which prioritizes transformative works. And of course, remember this lawsuit 424 00:25:38,920 --> 00:25:42,160 Speaker 5: was filed back when they thought there was actual copying, 425 00:25:42,280 --> 00:25:45,320 Speaker 5: at least in the training of the AI portion. And 426 00:25:45,400 --> 00:25:47,359 Speaker 5: then they're also trying, of course, on the right of 427 00:25:47,440 --> 00:25:50,240 Speaker 5: publicity front, to claim that this is not an expressive work, 428 00:25:50,680 --> 00:25:54,399 Speaker 5: but it is somehow a work that directly capitalizes on 429 00:25:54,640 --> 00:25:57,280 Speaker 5: an income stream that George Carlin would be entitled to. 430 00:25:57,760 --> 00:26:00,800 Speaker 5: I think that argument is weak because it's clearly a 431 00:26:00,920 --> 00:26:03,560 Speaker 5: comedy special. It's just not an advertisement for right of 432 00:26:03,600 --> 00:26:06,680 Speaker 5: publicity purposes, and write publicity law has been very clear 433 00:26:07,119 --> 00:26:11,880 Speaker 5: that what it's targeting is advertisements that directly impinge upon 434 00:26:11,960 --> 00:26:15,680 Speaker 5: a celebrity's right to monetize their image for purposes of 435 00:26:15,760 --> 00:26:19,360 Speaker 5: selling a product. Now, on the copyright front, the lawsuit 436 00:26:19,480 --> 00:26:23,119 Speaker 5: was filed with the understanding that the AI had ingested 437 00:26:23,200 --> 00:26:27,080 Speaker 5: all these large amounts of copyrighted content. So if that's true, 438 00:26:27,680 --> 00:26:30,960 Speaker 5: then the complaint was trying to preempt the argument that 439 00:26:31,480 --> 00:26:35,359 Speaker 5: the ingestion of all that copyrighted material was solely to 440 00:26:35,960 --> 00:26:39,840 Speaker 5: just learn from it for purposes of generating a wholly new, 441 00:26:40,400 --> 00:26:46,640 Speaker 5: transformative work that is a parody of George Carlin's comedy routines, 442 00:26:47,160 --> 00:26:50,680 Speaker 5: and in fair use doctrine, courts have always privileged these 443 00:26:50,760 --> 00:26:56,240 Speaker 5: more transformative work that take the underlying copyrighted work and 444 00:26:56,359 --> 00:26:59,680 Speaker 5: do something different with it. Parody is the copyrighted work. 445 00:27:00,080 --> 00:27:03,000 Speaker 5: It targets the copyrighted work to make a commentary about 446 00:27:03,040 --> 00:27:05,840 Speaker 5: the copyrighted work. A recent Supreme Court case that was 447 00:27:05,920 --> 00:27:12,400 Speaker 5: decided last year involving the artist Andy Warhol, had said, 448 00:27:12,800 --> 00:27:17,240 Speaker 5: did Warhol intend to comment upon this photograph that he 449 00:27:17,480 --> 00:27:21,480 Speaker 5: appropriated and took and created into a self screen? The 450 00:27:21,560 --> 00:27:24,280 Speaker 5: Supreme Court had said, no, he didn't intend to comment 451 00:27:24,359 --> 00:27:27,280 Speaker 5: on it. He didn't intend to parody it, so therefore 452 00:27:27,359 --> 00:27:29,520 Speaker 5: it's not fair use. So I think some of the 453 00:27:29,640 --> 00:27:31,920 Speaker 5: language in that complaint is trying to get at the 454 00:27:32,000 --> 00:27:34,960 Speaker 5: same issues that the Supreme Court was grappling with which 455 00:27:35,040 --> 00:27:39,240 Speaker 5: is when they thought that the comedians had actually copied 456 00:27:39,600 --> 00:27:44,359 Speaker 5: towards Carlin's work to create this new work. They wanted 457 00:27:44,400 --> 00:27:46,720 Speaker 5: to say, you know what, but the new work isn't transformative. 458 00:27:46,920 --> 00:27:50,720 Speaker 5: It's not commenting upon Carlin's works, it's not satirizing it. 459 00:27:51,320 --> 00:27:54,879 Speaker 5: It has no transformative purpose. But of course now that 460 00:27:55,119 --> 00:27:59,239 Speaker 5: they are claiming that this is wholly original content, then 461 00:27:59,320 --> 00:28:03,040 Speaker 5: we're in a very different games because according to them, 462 00:28:03,440 --> 00:28:08,280 Speaker 5: there was not even copying of any George Carlin copyrighted 463 00:28:08,320 --> 00:28:12,000 Speaker 5: works because there was no AI that was ingesting large 464 00:28:12,000 --> 00:28:13,840 Speaker 5: amounts of copyrighted content. 465 00:28:14,080 --> 00:28:16,960 Speaker 2: People may wonder why say it was created by AI, 466 00:28:17,480 --> 00:28:20,719 Speaker 2: And it's not the first time that companies have been 467 00:28:20,800 --> 00:28:26,040 Speaker 2: exposed or people have been exposed for masquerading as AI. 468 00:28:26,520 --> 00:28:29,880 Speaker 2: Because of the the hype about AI. There was supposedly 469 00:28:29,920 --> 00:28:34,840 Speaker 2: an AI drive through company, Presto Automation, that touted its 470 00:28:34,960 --> 00:28:40,000 Speaker 2: automated ordering technology, and filings indicate that it's actually human 471 00:28:40,120 --> 00:28:42,960 Speaker 2: beings who are powering a majority of the orders. So 472 00:28:43,080 --> 00:28:46,240 Speaker 2: it's an attempt, I guess, to get a hold of 473 00:28:46,680 --> 00:28:50,480 Speaker 2: the moment where people are fascinated or repulsed by AI. 474 00:28:52,200 --> 00:28:56,040 Speaker 5: Yes, I think it's certainly trying to as you say, 475 00:28:56,120 --> 00:29:00,400 Speaker 5: that's one example. The Great Weekend example, which apparently was 476 00:29:00,520 --> 00:29:04,320 Speaker 5: actually created by AI is another one. And I think 477 00:29:04,400 --> 00:29:10,840 Speaker 5: it's just trying to generate publicity for the stunt, and 478 00:29:11,520 --> 00:29:15,040 Speaker 5: you know, shock people, and it's always a was this 479 00:29:15,520 --> 00:29:17,840 Speaker 5: actually created by AI? Oh, We're going to actually do 480 00:29:17,920 --> 00:29:19,920 Speaker 5: a grand reveal a few days later and say we 481 00:29:20,040 --> 00:29:22,800 Speaker 5: tricked you. You thought this was AI actually a human 482 00:29:22,840 --> 00:29:25,560 Speaker 5: being created or vice versa. Of course I could see 483 00:29:25,600 --> 00:29:28,520 Speaker 5: stunt saying, oh, this was a human being that wrote this, 484 00:29:28,720 --> 00:29:30,640 Speaker 5: and then maybe the stunt becomes later that it was 485 00:29:30,720 --> 00:29:37,200 Speaker 5: generated by AI. Perhaps the podcasters didn't think that the 486 00:29:37,280 --> 00:29:41,520 Speaker 5: Carlin estate would immediately respond with a lawsuit, right, not 487 00:29:41,720 --> 00:29:45,160 Speaker 5: all these types of uses end up in court, and 488 00:29:45,480 --> 00:29:49,760 Speaker 5: so maybe the filing of the lawsuit kind of jolted 489 00:29:49,840 --> 00:29:54,200 Speaker 5: them into realizing that the Carlin estate was serious about 490 00:29:54,360 --> 00:29:58,200 Speaker 5: protecting his voice and his copyrighted material. Because certainly, I 491 00:29:58,240 --> 00:30:00,320 Speaker 5: think some other artists have been a little bit more 492 00:30:01,240 --> 00:30:06,400 Speaker 5: welcoming of the experiments around AI, or at least they 493 00:30:06,520 --> 00:30:10,880 Speaker 5: might have reached out to the producers first and said, hey, 494 00:30:10,920 --> 00:30:13,240 Speaker 5: you know, can you tell us more about this? This 495 00:30:13,480 --> 00:30:16,880 Speaker 5: wasn't authorized. We're a little upset about this, in which 496 00:30:16,920 --> 00:30:19,280 Speaker 5: case maybe the comedians would have gotten an opportunity to 497 00:30:19,400 --> 00:30:22,880 Speaker 5: explain themselves and explain that it was a big joke. 498 00:30:23,320 --> 00:30:27,200 Speaker 5: But of course the Carlon estate actually immediately proceeded to 499 00:30:27,360 --> 00:30:31,320 Speaker 5: a lawsuit, and I think that probably caused the comedians 500 00:30:31,400 --> 00:30:32,440 Speaker 5: to come clean. 501 00:30:32,880 --> 00:30:35,960 Speaker 2: A lawyer for Carlin's estate says, the lawsuit is going 502 00:30:36,000 --> 00:30:40,800 Speaker 2: ahead despite this new claim by the defendants. Quote, we 503 00:30:40,880 --> 00:30:43,240 Speaker 2: don't know what they're saying to be true. What we 504 00:30:43,360 --> 00:30:46,240 Speaker 2: will know is that they'll be deposed, they'll produce documents, 505 00:30:46,280 --> 00:30:48,840 Speaker 2: and there'll be evidence that shows, one way or another 506 00:30:49,200 --> 00:30:53,560 Speaker 2: how the show was created. So we'll speed ahead. 507 00:30:55,240 --> 00:30:58,840 Speaker 5: Yeah, I mean, and you know, of course lawyers say 508 00:30:58,920 --> 00:31:02,600 Speaker 5: these things. This stunt generated a lot of publicity. It's 509 00:31:02,720 --> 00:31:07,400 Speaker 5: unclear how much money was actually generated from this. And 510 00:31:07,560 --> 00:31:10,560 Speaker 5: if it still comes out that even if some amount 511 00:31:10,600 --> 00:31:13,640 Speaker 5: of evidence is willingly produced that shows that there was 512 00:31:13,720 --> 00:31:18,000 Speaker 5: actually no copyrighted works that were ingusted into any kind 513 00:31:18,040 --> 00:31:23,880 Speaker 5: of LLM, then the potential damages that the plaintiff can 514 00:31:24,000 --> 00:31:29,959 Speaker 5: receive just basically evaporate. So in that case, the parties 515 00:31:30,000 --> 00:31:34,480 Speaker 5: will probably settle, or the plaintiff will voluntarily dismiss the lawsuit. 516 00:31:35,000 --> 00:31:37,640 Speaker 5: To bring a lawsuit like this all the way to 517 00:31:38,000 --> 00:31:42,200 Speaker 5: the trial or fact finding stage, where there are depositions 518 00:31:42,400 --> 00:31:47,600 Speaker 5: and there's discovery, is an incredibly costly endeavor, And if 519 00:31:47,680 --> 00:31:50,680 Speaker 5: what the comedians are saying is true, it would behoove 520 00:31:50,840 --> 00:31:54,960 Speaker 5: them to or would do them well to immediately try 521 00:31:55,000 --> 00:31:58,840 Speaker 5: to ward off that expensive fact finding by producing some 522 00:31:59,080 --> 00:32:02,320 Speaker 5: amount of evidence to show that, in fact, there was 523 00:32:02,480 --> 00:32:06,200 Speaker 5: no AI training involved. And certainly I think that's been 524 00:32:06,280 --> 00:32:09,440 Speaker 5: the complaint against a lot of this training data that's 525 00:32:09,440 --> 00:32:13,200 Speaker 5: been fed into the LMS is the very opacity of 526 00:32:13,280 --> 00:32:17,520 Speaker 5: the system, and that it's never clear. Then the plaintiff 527 00:32:17,520 --> 00:32:20,800 Speaker 5: has no visibility into what the defendant is doing, what 528 00:32:21,360 --> 00:32:25,600 Speaker 5: their process was, what materials were actually fed into the LM. 529 00:32:26,000 --> 00:32:28,240 Speaker 5: This is true not just of the comedians, but of 530 00:32:28,320 --> 00:32:31,880 Speaker 5: course of large companies like open Ai. How are you 531 00:32:32,040 --> 00:32:36,480 Speaker 5: to figure out what open Ai was training their LLLMS on. 532 00:32:36,640 --> 00:32:40,000 Speaker 5: It's all proprietary. That's been always one of the big 533 00:32:40,080 --> 00:32:43,040 Speaker 5: complaints from the plaintiffs, and so in those cases you 534 00:32:43,200 --> 00:32:47,720 Speaker 5: want discovery to force the company to produce evidence. But 535 00:32:47,800 --> 00:32:50,600 Speaker 5: in this case, these are two individual comedians, you know, 536 00:32:50,680 --> 00:32:53,680 Speaker 5: I think the amount of money at stake is vanishingly 537 00:32:53,880 --> 00:32:59,440 Speaker 5: small if they are able to produce some evidence that, yeah, 538 00:32:59,640 --> 00:33:04,080 Speaker 5: that this material was wholly written, original written content. 539 00:33:05,120 --> 00:33:08,440 Speaker 2: One AI lawsuit down. Who knows how many more to come? 540 00:33:08,640 --> 00:33:11,560 Speaker 2: Thanks so much for being on the show. That's Zen 541 00:33:11,680 --> 00:33:15,560 Speaker 2: Tang of UCLA Law School. In other legal news today, 542 00:33:15,960 --> 00:33:19,800 Speaker 2: a Delaware judge has struck down Elon Musk's fifty five 543 00:33:19,920 --> 00:33:23,640 Speaker 2: billion dollar pay package at Tesla. The decision means that, 544 00:33:23,760 --> 00:33:27,200 Speaker 2: more than five years after Musk was granted the largest 545 00:33:27,320 --> 00:33:31,640 Speaker 2: executive compensation plan in history, Tesla's board will have to 546 00:33:31,720 --> 00:33:34,720 Speaker 2: start over and come up with a new proposal. Following 547 00:33:34,800 --> 00:33:37,760 Speaker 2: a trial that started more than a year ago, Delaware 548 00:33:37,880 --> 00:33:41,520 Speaker 2: Chance Rey Court Chief Judge Kathleen McCormick sided with an 549 00:33:41,600 --> 00:33:45,440 Speaker 2: investor who complained that the twenty eighteen package didn't have 550 00:33:45,600 --> 00:33:50,280 Speaker 2: proper disclosures about the performance benchmarks required of Musk and 551 00:33:50,400 --> 00:33:53,200 Speaker 2: that the board had conflicts of interest in approving it. 552 00:33:53,920 --> 00:33:57,680 Speaker 2: The judge wrote in the final analysis, Musk launched a 553 00:33:57,840 --> 00:34:02,320 Speaker 2: self driving process red calibrating the speed and direction along 554 00:34:02,400 --> 00:34:05,520 Speaker 2: the way as he saw fit. The process arrived at 555 00:34:05,560 --> 00:34:10,160 Speaker 2: an unfair price, and through this litigation, the plaintiff requests 556 00:34:10,280 --> 00:34:14,480 Speaker 2: a recall. The ruling leaves the future of Musk's fortune 557 00:34:14,600 --> 00:34:18,800 Speaker 2: in Limbo worth some fifty one point one billion dollars. 558 00:34:19,120 --> 00:34:23,080 Speaker 2: The options were one of his most valuable assets. Without them, 559 00:34:23,160 --> 00:34:25,640 Speaker 2: his net worth would drop to one hundred and fifty 560 00:34:25,719 --> 00:34:29,280 Speaker 2: four point three billion, making him the third richest person 561 00:34:29,400 --> 00:34:32,360 Speaker 2: in the world, after spending most of the past couple 562 00:34:32,400 --> 00:34:36,280 Speaker 2: of years at number one, according to the Bloomberg Billionaire's Index. 563 00:34:37,000 --> 00:34:39,840 Speaker 2: It's the second legal loss for the billionaire in court. 564 00:34:40,640 --> 00:34:43,400 Speaker 2: In May, he failed to persuade an appeals court to 565 00:34:43,520 --> 00:34:46,520 Speaker 2: release him from a twenty eighteen agreement with the US 566 00:34:46,600 --> 00:34:50,240 Speaker 2: Securities and Exchange Commission that his Twitter posts about Tesla 567 00:34:50,400 --> 00:34:52,640 Speaker 2: be screened. And that's it for this edition of the 568 00:34:52,680 --> 00:34:55,680 Speaker 2: Bloomberg Lawn Show. Remember you can always get the latest 569 00:34:55,760 --> 00:34:58,920 Speaker 2: legal news by listening to our Bloomberg Lawn podcast. You 570 00:34:59,000 --> 00:35:02,800 Speaker 2: can find them on Apple Podcasts, Spotify and at www 571 00:35:03,000 --> 00:35:08,120 Speaker 2: dot Bloomberg dot com, Slash Podcasts, Slash Law, and Attorneys 572 00:35:08,320 --> 00:35:11,800 Speaker 2: and attorneys looking for legal research. Whether you're an in 573 00:35:11,960 --> 00:35:15,600 Speaker 2: house council or in private practice, Bloomberg Law gives you 574 00:35:15,719 --> 00:35:19,400 Speaker 2: the edge with the latest in AI powered legal analytics, 575 00:35:19,560 --> 00:35:24,040 Speaker 2: business insights, and workflow tools. With guidance from our experts, 576 00:35:24,120 --> 00:35:27,240 Speaker 2: you'll grasp the latest trends in the legal industry, helping 577 00:35:27,280 --> 00:35:30,320 Speaker 2: you achieve better results for the practice of law, the 578 00:35:30,400 --> 00:35:33,680 Speaker 2: business of law, the future of law. Visit Bloomberg law 579 00:35:33,760 --> 00:35:36,960 Speaker 2: dot com. I'm June Grasso. Stay with us. Today's top 580 00:35:37,120 --> 00:35:40,480 Speaker 2: stories and global business headlines are coming up right now.