The Ninth Circuit recently upheld a ruling allowing a class action against NeoCortex, the creators of the Reface app, over the unauthorized use of content creator Kyland Young’s likeness. This case highlights the growing tension between AI innovation and individual rights. Scott Hervey and Jamie Lincenber discuss the lawsuit and what it means for AI companies using digital likenesses on this installment of The Briefing.

Watch this episode on the Weintraub YouTube channel here.

Show Notes:

Scott: Recently, the Ninth Circuit upheld the District Court’s refusal to throw out a proposed class action brought by a one-time reality star based on the use of his face by an AI-based face-swapping application. The tech company, NeoCortex, argued that its use of the TV star’s face didn’t violate his publicity rights and moved to dismiss the case under California’s anti-slap laws. Both the District Court and the Ninth Circuit on appeal rejected NeoCortex’s This is Motion to dismiss.

I’m Scott Hervey, a partner with the law firm of Weintraub Tobin, and I’m joined today by my colleague, Jamie Lincenberg. We are going to talk about this case and its broader implications for AI companies whose business playbook involves exploiting the likeness of others on today’s installment of the Briefing.

Jamie, welcome back to the briefing.

Jamie: Thanks, Scott. It’s always good to be here.

Scott: Yes, this one, I think, is going to be a real fun one, Jamie. How about we get into this one? Kylin Young brought this suit against Neocortex. Neocortex is the creator of the Reface app. Jamie, have you used the Reface app?

Jamie: I haven’t. No, but it sounds fun.

Scott: It does sound fun. I haven’t used it either. I’m going to have to give it a shot here. Okay, so Mr. Young alleged that Neocortex used his likeness without consent to promote the Reface app. Reface, it’s an app that allows users to superimpose their faces onto celebrities and images and videos. Kyla Dylan was a cast member of a few reality shows, including Big Brother. The Reface preset catalog contains videos and images of Young from his appearance on Big Brother.

Jamie: Young claimed that Neocortex used Young’s likeness in promotional watermarked clips to advertise their subscription service. He argued that the watermarked images created with the free version of Reface were teasers and that the watermarks incentivized users to pay to remove them. They serve as free advertising to attract new downloads of the Reface application. He also alleges that the images generated with the pro-version of Reface are paid products that would then constitute commercial use and purpose.

Scott: He alleged that this all violated California’s right of publicity statute, specifically, Section 3344 of the Civil Code. We’re all very familiar with 3344, and anybody who listens to this podcast knows we talk a lot about 3344. So Section 3344 prohibits the use of another person’s name, voice, signature, photograph, or likeness in any manner on or in products, merchandise, or goods, or for the purpose of advertising or selling such products, merchandise or goods without such person’s prior consent. Young brought a class action on behalf of all other individuals whose name, voice, and likeness were used to promote the Reface app without their consent.

Jamie: So on the surface, this case probably seems rather cut and dry, but we all know that’s rarely the case. At the district Court level, Neocortex filed a motion to dismiss under California’s anti-slap statute.

Scott: Right. So procedurally, the district Court denied Neocortex’ motion to dismiss. Neocortex appealed, and the Ninth Circuit upheld the district Court’s decision. So I I thought it would be good to look at where the district Court and the Ninth Circuit were aligned, because that’s going to be very informative for both AI companies whose playbook involved using individuals likenesses, and also maybe for potentially future aggrieved individuals.

Jamie: Right. Yeah. To set the stage, California’s anti-slap statute is designed protect defendants from lawsuits that might stifle their right to free speech or petition. California’s anti-slap statute is a two-step process. The first step, the defendant must show that the plaintiff’s claims arise from an act in furtherance of their right to free speech or petition. Step two, if the defendant makes that showing, the burden shifts to the plaintiff to demonstrate a likelihood of prevailing on the merits their claim.

Scott: In this case, Neocortex argued that its use of Young’s likeness and promotional watermarked clips was part of its constitutionally protected commercial speech aimed at promoting its app. Thus, it contends ended the claims fell within the scope of the anti-slap statute. The District Court essentially agreed. It said, wrongful or not, Neocortex use of Jung’s image as a tool to provide users with a mode of creative expression is conduct in furtherance of a user’s free speech rights.

Jamie: On appeal, the Ninth Circuit assumed, without really deciding, that Neocortex satisfied the first step of the anti-slap test.

Scott: Right. I think that’s really because all the action is really in the second part of the analysis, determining whether Jung demonstrated a probability of prevailing on the merits of his claim.

Jamie: So The Neocortex argued that Jung failed to show that Neocortex violated his right of publicity on three grounds. The first is copyright preemption. The second was that Neocortex used was First Amendment transformative use. And thirdly, that Neocortex lacked knowledge that it was specifically using Jung’s likeness.

Scott: So let’s take those one step at a time. As to copyright preemption, the district Court found that Young’s claim was not preempted. The reasoning is rooted in the nature of publicity rights. Unlike copyrights, which protect creative works, publicity rights protect a person’s name and likeness. The Court emphasized that the claim targeted the misuse of Young’s likeness in advertising, not the distribution of a creative work. Because Young’s allegations center on how his name and likeness are used in Neocortex products and not on the ownership rights to the image itself, Young’s claim in the complaint does not fall under the subject matter of copyright, and his claim is, therefore not preempted under the Copyright Act.

Jamie: Right. The Ninth Circuit agreed with the district Court on this.

Scott: Right. That’s correct.

Jamie: Let’s now talk about the transformative use argument. The transformative use defense assesses whether a person’s likeness is merely a raw material for creating something new or if it’s the core substance of the work. Neocortex argued that the refaced generated clips were transformative, but the District Court didn’t quite buy that.

Scott: Right, it didn’t. The District Court noted that the clips still portrayed Jung in roles that aligned with his public persona, not as something distinct or creatively altered. Neocortex would only be entitled to the defense as a matter of law if no trial or fact could reasonably conclude that the resulting clips or images were not transformative. However, a trial of fact could reasonably conclude that the neocortex’s use of Jung’s likeness was not sufficiently transformative, given Jung’s allegation that the resulting clips and images featured Jung in the roles for which he is known.

Jamie: Right. And so the Ninth Circuit upheld the District Court’s conclusion.

Scott: Right. And I think this is an important takeaway for establishing transformative use of an individual’s likeness. Using a likeness in a way that doesn’t significantly alter its context or meaning likely won’t qualify as transformative under California law, and therefore, that use probably still could be actionable under 3344.

Jamie: Lastly, both the District Court and the Ninth Circuit addressed Neocortex’s contention that Young failed to show that Neocortex had knowingly used Young’s identity in the re-face application. The court highlighted that Neocortex made its database searchable, potentially allowing users to identify specific individuals, including Jung. This level of customization really suggests Neocortex likely knew they were using Young’s likene...