Pat Murphy
Hi and welcome to the MCA Prodcast – your fix for everything innovative in advertising production. I’m Pat Murphy and I’ve been working in this industry for more than 35 years now. I’ve seen a lot of changes, but know there’s plenty more around the corner. Each week on the podcast, you’ll get to hear from one of the movers and shakers who are shaping the world of advertising for the future, and we’ll dive into some of the key challenges facing our sector today and how we’re best placed to overcome them.

Today we’re talking to Nick Johnson, leading advertising law and digital regulation guru, and the global head of tech, media and comms at international law firm Osborne Clark. His team regularly advise some of the world’s most successful brands, media owners and agencies.

Nick, it’s great to see you again. Welcome to our podcast.

Nick Johnson
Great to see you, Pat. Thank you for having me.

Pat Murphy
Now. It’s a great pleasure to have you here today to talk about what seems to be the theme of the first half of this year – AI. Last year, at the same time, we were discussing the metaverse and how that would change the world of advertising, but that hasn’t really been realised. This year I was in Cannes, everyone’s talking about AI. In your view, is this just a fashion for ‘23 or is this really going to stick around and have the impact that everyone is saying?

Nick Johnson
I think you’re absolutely right. It’s the topic everyone’s talking about and what’s changed is that ChatGPT and other applications like ChatGPT have become available and people have started using them and seeing what they can do. The metaverse, yes, is still really interesting. It will be a big thing at some point, but at the moment we’re not seeing the use cases. People aren’t actually playing in the metaverse on a day-by-day basis, but people are using ChatGPT and it’s changing the way that people are doing their work.

Pat Murphy
Yeah. Now getting to grips with how AI will impact our industry isn’t easy, because it’s changing on a daily basis, as we know, a bit like building the train while it’s on the move. How does a company like yours approach something like that?

Nick Johnson
So we, in our own use of AI, have been quite tentative. As lawyers, we’re quite cautious, quite risk averse, but we do want to make sure we’re not missing any tricks and we’ve always been very focused on how we can use technology to do what we do and do it better. So we have been dabbling in using our own instance of one of these generative AI applications, training it with some of our own materials and seeing what that can do, and so far it’s been very, very interesting in terms of the work types that we’ve been experimenting with. The output has been really pretty credible. You still want to have good human supervision of it, but it’s in many cases throwing up a document that is a good first effort and kind of about as good as you would expect from a junior lawyer.

Pat Murphy
Fantastic.
Now we’re talking about AI regulation. It’s all a bit of a mess right now, isn’t it?

Nick Johnson
It’s early days for AI regulation and it’s very much on a country by country basis. As you’ll be aware, the European Union is looking at putting in place the AI Act there and that looks like that probably will be in place next year. The UK has looked at whether it should be putting in place some regulation and so far it doesn’t look like there will be any specific UK AI regulation. Similarly in the US, but other territories around the world are potentially looking at specific legislation regulation. So it’s going to be very much in a country by country basis.

Pat Murphy
Although saying that I was reading recently that the UK wanted to take a lead on some of this stuff. So are they saying they don’t want to have regulation, or they want to have regulation that makes more sense or more freedom than, say, the EU AI Act will have?

Nick Johnson 
Yeah, the UK government has come out saying that it thinks that the regulation legislation that we’ve got in place already is adequate and adaptable enough to deal with the different issues that arise under AI, and that may be right. The EU is taking a different approach and wants to create a Europe that would be led by responsible AI and leading the world in the way that they perceive that they led the world on data protection with the GDPR. They want to be kind of putting in place regulation to support ethical and responsible use of these technologies.

Pat Murphy
As a lawyer. I know lawyers don’t like to commit to anything, right? You have the EU version and you have the UK version. Where do you sit?

Nick Johnson
I think there’s a big risk with what the EU are trying to do that they may just slow up development and slow up some of the exciting use cases actually coming to market. I think that’s probably overly cautious of them and may backfire in terms of some of the more exciting developments happening outside of the EU as a result.

Pat Murphy
There is a concern from a lot of people. In fact, a few weeks ago, we saw an open letter signed by more than 150 CEOs from different companies, including some of our own clients, urging the EU to change the draft of the AI Act because of their fear that it’s too strict. Do you think that that will have an impact?

Nick Johnson
Yes, I can see the point they’ve got, because what this current draft of the AI Act is saying is that so-called foundation models of AI, which would include a lot of the technologies that we’re using when we use things like ChatGPT that those technologies would need, before they’re released on the market in the EU, to be registered with the European Commission, to undergo a risk assessment and to meet certain transparency requirements in terms of indicating whether they use, whether they had used, copyright materials when they were being trained and giving some details of that. So that’s quite limiting and acts as a bit of a sort of bar to those applications coming to market quickly because they’ve got to undergo these risk assessments and so on. So I can see why businesses would be concerned about that and the impact that would have on European businesses.

Pat Murphy
Do you think there’ll ever be any global alignment?

Nick Johnson
I think it’s moving really quickly at the moment in terms of the technology and the way it’s being used. I think there is some useful international dialogue happening at the moment. I think what’s happened with data protection law is possibly a good indicator here, in that there was a lot of misalignment for a while, with the EU going out on a limb with the GDPR, but over time many other territories around the world have implemented legislation that approximates to that and kind of comes up to that level, and I suspect that if a large block of territories in the world is going to go with some legislation that requires particular kinds of transparency, then any international operator is going to have to comply with that and therefore you may see other legislation coming up to that level anyway as time goes on. So I think there will be some harmonisation over time, but there’s going to definitely be a period where there are some discrepancies.

Pat Murphy
Now. We followed at MCA closely the public hearings led by the copyright offices in the US and listen to a lot of different points of view on the matter. Is there such a thing as copyright with pure machine output in your view?

Nick Johnson
Oh, it’s a really, really interesting point, this one, and it varies from territory to territory. So the US Copyright Office has come out and said that for purely machine created output they would not register copyright in that If a machine, if an AI is used as a tool by a human and the human is exercising some creative control and input in that, then that may be copyrightable in the US, but if it’s purely just to spat out by an AI, then no, that wouldn’t be registrable as a copyright there.

In the UK different story we under our law still have requirements of originality, but if the AI output of an artistic work or a literary work meets that originality requirement, then it should be protected by copyright in the UK.

In the EU it’s something of a mixed position in that literary works, artistic works created by purely by an AI, shouldn’t be protectable by copyright law, but sound recordings of any such work or a film of any such work would get some limited protection in the EU.

So it’s really different across different territories. I think the practical message there is if you’re using generative AI to create some work, some advertising work, for instance, you need to be using it as a tool to assist you with your human endeavour rather than just relying on the AI itself to do the creation. If you use it as a tool, you’ve got a good shout for saying that it’s protected by copyright globally. If you just take the output from the AI, there’s a big risk that, in some territories at least, there wouldn’t be copyright protection in what you have then created.

Pat Murphy
Another controversial matter is the training materials used by the tools to generate the so-called intelligence and the third party’s rights. I heard you talking about this issue in a webinar your law firm presented a few weeks ago. Can you explain that a little bit more for us?

Nick Johnson
Yeah, sure, it’s one of the big issues that’s being worked through in the courts at the moment. So the way that most AI and machine learning works is that you need to train it using masses of data, and it’s only through seeing massive amounts of data that the AI can identify patterns and learn from that data how to then create something itself.

And, of course, by training it on data, you may be infringing the copyright or other IP rights in that data, and so some AIs may have been trained on information just found out there on the internet and, of course, many of those items of information and content will be protected by copyright or other rights, and so there is currently a number of cases going through the courts where this issue is being explored.

Pat Murphy
Not least the one with Google, of course, the class action case with Google.

Nick Johnson
Yes, absolutely. So you’ve got. You’ve got a number of rights owners and, in some cases, rights owners acting as representatives on behalf of a class of potential rights owners suing those who have been operating AI engines and saying, basically, you’ve used my material, alongside a lot of other pieces of material, to train your AI and I never gave you permission. So it’s going to be down to the courts to decide whether that usage is actually an infringement of copyright and, if it is, what kind of damages should be awarded.

One suspects that over time, an ecosystem is going to arise and an understanding will arise where rights owners will get rewarded through a license fee for the use of their material to train AIs and that the courts the courts may recognise that that’s an appropriate thing to do. We’re going to have to see what these cases say, but at the moment it’s very much in flux.

Pat Murphy   
Would you say that the outcome of that class action with Google might have a significant impact on how large corporations behave with this technology?

Nick Johnson
Well, I think large corporations have already clocked that there’s a risk here and, in many cases, are using the same engines but training themselves on their own proprietary material. So you know, if you wanted to create a good AI engine for making new advertising content for your brand, you might well seed it using your own historic pieces of advertising rather than relying on some AI that’s been trained just on content that’s been found out on the net. And increasingly we’re seeing instances where companies are doing exactly that kind of a thing.

Pat Murphy
How can brands be sure that the material that they are creating with AI to produce campaigns is not infringing copyright?

Nick Johnson
Well, it’s a couple of things. Firstly, as I say, if the AI has been trained appropriately, then that will mitigate that risk. And so part of it is about doing some due diligence into them, into the, the tools that you’re using and that your folks are using and the your agencies may be using as part of their creative endeavors. So looking into those done, working out, are there proper rights licenses in place, or has it been trained on material when we’re confident that there’s no IP infringement?

But then, secondly, it’s also about just reviewing the output In the same ways that one would normally review output, because just because it’s been created by an AI doesn’t mean that there’s no possibility that it might have it might have come up with something that’s a trademark infringement, for instance.

Pat Murphy
So what you’re saying is that transparency about the origination of the material is the thing that really is needed for brands, and do you think also brands need some kind of indemnification from their creative partners when they’re working on something like this?

Nick Johnson
Certainly one of the hot topics for us as lawyers at the moment is what should go into the contract between an advertiser and its agency, between the agency and its suppliers. A lot of that is about giving transparency as to when and where generative AI is being used. It’s about setting some guidelines and guardrails around how it’s being used and it’s about kind of having the ability to know you know whether the right rights, licenses, are in place for the material that was used for training it and you know what human involvement has been involved in the use of the output from the AI.

Pat Murphy
Now talking about advertising campaigns. What’s your view about the use of AI, deep fakes and voiceovers in ads? I mean, I read there is AI tech that can now replicate a voice very accurately with only about three seconds of sampling. I mean that’s ridiculous! How does that impact the copyright and image rights if created without the participation of the artist? I mean, can artists copyright their image or voice? What would they need to do that?

Nick Johnson
Yeah, so I mean, there are a number of territories where artists, celebrities and others have have rights of publicity and, you know, protectable legal, legal rights in their likeness and their voice, and in those territories they would have a good ability if they haven’t signed those rights away in a contract, a good ability to prevent others from using their image, their voice for advertising or for other purposes.

In other territories its a bit less clear, so I think we’re gonna see some sort of ongoing litigation and claims in that area.

But we’re seeing, we’re seeing kind of terms coming into contracts now rights agreements, talent agreements around use of deep fake technology and AI technology. And you know, for a brand’s point of view, in some ways it’s a dream scenario to be able to edit a commercial without having to get the, the actor in again to reshoot or to do a further voice over. To be able to do that easily and quickly and in a way that doesn’t require, doesn’t require further production spend seems very attractive.

You could see, for a really in-demand actor or talent, this kind of thing could actually make them more money because you know there’s only so many shoots one can do. If your        name, and likeness and your voice are super popular, well, why not just license that out for AI usage? So you know, for the really big talent there is an opportunity. But I think for the industry as a whole, it poses a really big question about is this sustainable? If brands and agencies are just going to be using AI for this kind of thing, potentially you’ve got you’ve got a whole line of work drying up for for actors, for voice over specialists, and when you really need those people, are they still going to be there anymore if there isn’t really a career there for them because AI has taken it? So I think I think that poses an interesting ethical question as well as a legal point.

Pat Murphy
And there’s also the issue of remuneration as well. So if you’re using someone’s likeness, using AI or their voice, then surely, ethically, those voice overs or those actors should be remunerated remunerated whether you’re using them the original voices or not. That’s a big discussion we have with our brands.

Nick Johnson
Yes, absolutely. And there’s also the discussion about… if your voice has been used to train an AI, should you be entitled to some remuneration for that as well? I’m sure we’ll see some litigation on that point and in the coming years.

Pat Murphy
And we’re not just talking about image manipulation here, but also sound and music as well. I mean, of course, it can be a force of good! I like the way, say, Paul McCartney’s used AI to generate John Lennon’s voice for the new Beatles track but also it can be bad, such as that really weird Johnny Cash AI generated version of Barbie Girl that I saw on LinkedIn the other day. Did you see that Nick?

Nick Johnson
I haven’t seen that. I must check it out.

Pat Murphy
You got to check it out. Firstly, it’s just not cool to do that to Johnny Cash but what are the ethical and legal considerations of something like that?

Nick Johnson
Yeah, I mean there are definitely kind of moral rights considerations, depending on how it’s done in terms of, you know, uses of copyright work and so on. But also, as I say, in some territories there are protectable rights in one’s image and one’s likeness and voice, so there could be some infringement proceedings there potentially as well.

Pat Murphy
But I think a lot of people are just doing this stuff at home now. You know, people have the technology just to be able to do that. So it’s not always someone with a big pile of cash making these things. I mean, the Tom Cruise fake the deep fakes were is a good example of that, isn’t it?

Nick Johnson
Yep for definite. And you know there are issues not just about the IP rights here but also about kind of consumer protection and  having some certainty that what you’re seeing was actually said by the individual. You know if this appears to be endorsed by a celebrity, you’re more likely to buy the product. But if dodgy brands selling potentially you know, rip off unsafe products are using well-known celebrities, deep fakes of well-known celebrities, that’s a consumer protection issue as well as an IP issue.

Pat Murphy
Look, Nick, in my experience, lawyers never tell a client ever what to do, not least the people I work with on a day-to-day basis, but they just provide options for us, as a client, to make a decision.

But I’m going to ask you directly now what are your top three no-brainer things that clients need to do or be thinking about when considering their AI approaches and advertising?

Nick Johnson
Okay, top three I would say. Firstly, yeah, let’s go back to that point about using AI as a tool. If you’re using it to assist you as a human in doing something creative, there’s much more chance that there will be IP rights in what is created, in the output.  And it enables you to exercise much more editorial control to make sure that things like bias and discrimination aren’t coming into the output. So I think, in terms of minimizing legal risk, that’s really, really important. So that’s number one.

Secondly, again from a legal perspective, I think just doing the due diligence into the tools that you’re using and that your suppliers are using, making sure that rights have been cleared properly in the material that’s been used to train the AI or, if not, at least you’re going into it with your eyes open and what governance has been in place to try and control things like bias and discrimination.

I think it’s also an important question.

I guess the third one would really be just about spending the time to work with AI and get used to the kind of output that it creates. And AI output can often be very polished and plausible sounding and look like, on the face of it, very good, but we all need to get used to kind of looking beyond that sheen and basically not necessarily trusting it, learning how to question it when it, on the face of it, looks very promising and looks very compelling. Actually, we need to learn that it can be deeply flawed and we need to be very alert to where those flaws come in. So really by using it on a regular basis that we get to kind of develop those antennae.

Pat Murphy
What are the things that you think that AI still isn’t being able to deliver on, certainly around creativity. What do you think that they haven’t got quite right yet?

Nick Johnson
Well, I think it’s hard. I think there is a bit of a risk that some AI output will become kind of homogenized, that it’ll end up being kind of the same for everyone because people are using similar questions, similar cues for the AI and it ends up being all very meh and all very ‘oh yeah, the kind of thing that an AI would do’.

I think it’s learning fast, though, so I wouldn’t rule out that actually AI can be really very creative in ways that humans can be creative too. It’s all too easy to say, ‘well, to create really good music, you need to be a human’, but actually the sort of things that we’re starting to see now makes me wonder if that’s the case? That actually it’s catching up pretty quickly.

Pat Murphy
I think there are kind of nuances that still are not being able to get delivered by AI.

I’ll give you a couple of examples. I mean you can tell me I’m wrong. I can’t imagine AI coming up with the idea for Cadbury Gorilla or my favorite ad of all time, which is the Hamlet photo booth commercial. I mean the humor and the nuances in those. I can’t imagine that being created by AI, not yet anyway.

So I think that’s those storytelling, emotional or humoristic things that are quite well, certainly unique in British advertising. Not quite sure it’s there yet.

Nick Johnson
Yeah, it may not be long, though

Pat Murphy
I agree with you.

Now I’ve recently seen a video of a band called the Fast Boyfriends with you playing the drums right? Is that really you, or is it Deepfake?

Nick Johnson
It’s Deepfake. Yeah, don’t believe a word. It’s Scurrilous, scurrilous. It’s my doppelganger.

Pat Murphy
Are you still gigging? That’s what I wanted to know.

Nick Johnson
We do. We do still gig occasionally. We’re getting a little old for it now. But yeah, we like to gig once a year or so and yeah, it’s a great hobby and a nice way to relieve all the stress that comes from sitting at a desk all day giving difficult advice.

Pat Murphy
Fantastic. And finally, Nick, I have to ask you this. What’s your favorite ad of all time? You must have one of those.

Nick Johnson
Oh, I’m going to betray my age here and it’s probably a popular one that comes up time and time again, but for me it’s the R Whites Lemonade, Secret Lemonade Drinker ad from the mid-70s I think. I mean you talked about kind of Cadbury’s Gorilla and kind of humour and storytelling and it’s got that for definite, but it’s also got great music.

Pat Murphy
You have to do the rendition for us now, Nick, Come on. I want you to kind of pretend.You’re the guy that’s come down middle of the night in the dark and he’s opened his fridge and he’s got his R Whites. How does it go?

Nick Johnson
<SINGING>I’m a secret lemonade Drinker R Whites, R Whites.

I mean, it was great. It was just. I used to get excited by that ad coming on. I would call my younger brother. It’s like that ad’s on again, because the music was so compelling. It was Elvis Costello’s dad, wasn’t it? That did the music for that, and I think Elvis Costello apparently did some of the backing vocals in that track as a young lad. Yeah, amazing. It’s one of those long sticks with you.

Pat Murphy
Nick, I never thought I’d hear myself say that I know a cool lawyer, but you really are. Thanks so much for being here on the MCA Prodcast.

Nick Johnson
It’s been my pleasure, Pat. Thank you very much indeed.

Pat Murphy
Today we talk to Nick Johnson, in my view, the top person when it comes to advertising law and digital regulation. He also happens to be global head of tech, media and comms at Osborne Clark. We had a great banter about the use of AI and having a feeling this is going to be the first of a series of conversations, since this technology is evolving rapidly. With Nick, MCA is developing a brand initiation program for clients around AI regulation. Please contact us for more information.

To find out more about the MCA Prodcast, please head to theprodcast.com, where you’ll find details on all my guests, links to their favourite ads and full transcriptions of all the episodes.

If you’d like to feature on the Prodcast or have any comments, questions or feedback, please email us at podcast@murphycobb.com.

I’m Pat Murphy, CEO of MCA. Do come and connect with us on LinkedIn or Instagram, of which all the links and the notes for this episode will be there. We’d love to hear from you.

Thanks again to Nick, my team at MCA and to my production team at What Goes On Media. Thanks for listening. I’ll see you next time!