Delve into the new WGA and SAG contract provisions relating to AI. Scott Hervey and Jamie Lincenberg tackle the terms and changes in this installment of “The Briefing” by Weintraub Tobin.

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Scott

AI ended up being a bigger than expected part in the writers’ and actors’ strikes. What exactly are the new WGA and SAG contract provisions relating to AI? I’m Scott Hervey from Weintraub Tobin, and today, I’m joined by my colleague Jamie Lincenberg. We are going to talk about the AI terms and the 2023 changes to the WGA and SAG MBA on this installment of “The Briefing” by Weintraub Tobin.

Jamie, welcome back to “The Briefing.”

Jamie

Thanks. It’s good to be back. Looking forward to getting into this topic with you.

Scott

Yeah. So, let’s dive right in. So, let’s first talk about the changes to the Writers Guild MBA related to AI. I think the most logical place to start is with how the WJ defines AI. So the term generative artificial intelligence, or let’s call it GAI, because we don’t have enough acronyms, let’s call it GAI. And that generally refers to a subset of AI that produces content based upon learned patterns like Chat GPT, DALL-E, and Llama, and it does not include traditional AI technologies such as those used in computer-generated imagery like CGI and visual effects.

Jamie

Scott, the WGA terms say that GAI cannot be a writer or professional writer as defined in the MBA because it’s not a person, and therefore, materials produced by GAI should not be considered literary material under any MBA. This is important because the fact that GAI output can’t be considered literary material has a direct impact on a writer’s credit and compensation.

Scott

Yeah, that’s right. While a producer can provide a writer with GAI output and instruct the writer to use it as the basis for writing a story or a script, that GAI output cannot be considered assigned or source material for the purpose of determining compensation or writing credit, and it can’t be used to disqualify a writer from that writer’s eligibility for separated rights.

Jamie

While writers can use GAI in the process of preparing literary material, for example, a screenplay with consent of the company, a company may not require that a writer do so as a condition of employment. Material created by writers who elect to use GAI should be considered literary material as opposed to material produced by GAI.

Scott

That’s right, but given the issues surrounding the protectability of GAI output and the requirements that must be satisfied when registering a work that includes GAI output with a copyright office, it’s not clear to me why a producer would want a writer to incorporate GAI output into any literary material. The WGA terms do acknowledge that producers can establish their own policies with respect to the use of GAI that writers will be required to adhere to, and companies can reject the use of GAI, including when that use could threaten the copyrightability or the exploitation of the work.

Jamie

We should also talk about the 2023 changes to the SAG Basic Agreement related to AI. Those revisions seem to be a bit more involved.

Scott

Yeah, they are. I would agree with you there. So, the 2023 changes in the SAG Basic Agreement, they really address three different types of digital replicas. The first is an employment-based digital replica. The second is an independently created digital replica. And then the third is called a synthetic performer.

Jamie

Let’s talk about the employment-based digital replica first.

Scott

Sure, let’s do that. So, an employment-based digital replica is a replica of the voice or likeness of the performer that is created in connection with the employment, performer’s employment on a motion picture. And note that this can be both the program for which the performer was employed and a program other than which the performer was employed. And it’s a replica that’s created using digital technology with the performer’s physical participation, and is for the purpose of portraying the performer in photography or on a soundtrack in which that performer did not actually perform.

Jamie

If a studio wants to use an actor in the creation of an employment-based digital replica, the studio must give 48 hours of advance notice prior to the services and get written consent, which must be clear and conspicuous.

Scott

It is also important that the producer gets written consent where the producer desires to use an employment-based digital replica. Now, the scope of consent and the manner in which it can be obtained is the same for the creation because you have to get consent for creation and consent for use. So, I would think it would be best practice to get both required consents in the same document. This consent it can be contained in either a section in the performer’s employment contract that’s separately signed or initialed by the performer, or it can be an entirely separate writing that is signed by the performer, like a writer or a side letter, whether it’s a provision in the talent agreement or it’s a side letter. This language, the language that must be in there, must include a reasonably specific description of the intended use. Now, once the consent is granted, it’s good for the life of the performer, and it can also continue after that performer’s death unless it is expressly limited within the consent document itself.

Jamie

And there are special rules addressing compensation to be paid to the actor in connection with creating the digital replica, but no additional compensation is due if the performer participates in the creation of the digital replica on the same day that the performer is providing other services to the producer. If the performer participates in the creation of the digital replica on a day that the performer is not providing other services, then the producer would have to pay one day at performer’s pro rata daily salary, but not less than day performer’s minimum. Now, if the work on the digital replica was scheduled on a separate day to accommodate the performer, the producer would only owe one-half of the performer’s pro rata daily salary for a four-hour session. Over 4 hours would be at the full day rate. However, no pay would be due for schedule f players or if the work happens during the player’s guarantee.

Scott

There are also compensation rules attached to the use of the digital replica. If a producer wants to use a digital replica in a motion picture or program episode for which the performer was employed, the producer would have to pay the performer’s pro rata daily rate or the minimum rate, the scale minimum rate, whichever is higher for the number of production days that the producer determines the performer would have been required to work had the performer worked instead of using the digital replica. Now, the producer must make a good faith effort to estimate the number of production days that the live person, the live performer, would have rendered services utilizing objective criteria. Now, no additional compensation is due if, based on the performer’s form of engagement, their compensation would have covered the work had it been performed by the performer. For example, where overscale compensation is applied to this type of work at the minimum scale daily rate or the digital replica is used in a scene in which the performer actually performed in person.

Jamie

So, for example, if a digital replica was used instead of a retake.

Scott

Right! And also, no additional compensation is due where the performer is under schedule f. So an employment digital replica could be used in a scene where an actor is playing multiple characters in the same scene, like the barbershop scene in “Coming to America,” where Eddie Murphy is playing almost every character, or if for some reason, the performer isn’t available at that time.

Jamie

For example, if AI was around when Paul Walker died, an employment digital replica could have been used to finish “Fast and Furious.”

Scott

Right! So the 2023 SAG changes, they also addressed when the studio can use a digital replica in a program for which the performer was not employed. Those rules say that the studio has to get written consent for this type of use at the time of use and not at the initial employment.

Jamie

That’s true. However, there is an exception, right?

Scott

Right. Yeah. Consent for use in another project may be obtained at initial employment if one, the project or projects are specifically identified and there is a reasonably specific description of the intended use that’s provided for each of the identified projects, and two, the performer is also employed in those other identified projects, or the performer is deceased at the time the other identified projects commence production. So this may be something to look at for principal cast members where the studio has options for additional seasons.

Jamie

The compensation payable for the use of a digital replica in a program for which the performer was not employed is similar to the compensation payable for the use of a digital replica in a program for which the performer was employed. It’s the daily rate, or if the use is in a field or medium covered by another SAG after collective bargaining agreement, it’s no less than the minimum wages and residuals in that agreement, and if the artist is schedule f, no additional compensation is due.

Scott

The 2023 SAG rules also provide for an independently created digital replica. This is a digital replica of a performer that is used in a project that the performer is not employed in. The rules require written consent that includes a reasonably specific description of the intended use, and fees are left for the parties to bargain.

Jamie

The 2023 SAG rules also left open the potential for producers to use a synthetic performer. This is a completely made-up digital performer that is not voiced by a natural person. The producer does have to give notice to the union, and there’s language about a good faith negotiation over lost compensation.

Scott

So I think, Jamie, I think the question will be, that producers and that talent reps will struggle with what does this consent actually look like and what actually has to be in it? What does a reasonably specific description of the intended use look like? What does it mean, and what do I actually have to disclose, and what if there are conceptual changes that later change the intended use? Does that mean that the initial consent is no good, and we have to go through an entirely new round of negotiated consent? You know, this does answer a number of questions with regard to when compensation is due to an actor for both the creation and the use of a digital replica. And it seems that from the actor’s perspective, they get paid. They get paid if a digital replica is used, and they get paid in connection with the creation of a digital replica, just like they would get paid where they’re providing post-production services, if they’re schedule f, or if it’s during their guarantee period, they’re not going to get paid anymore, but they’re already being paid over scale, so that amount is applicable to them. With regard to the use of a digital replica in a new episode, that performer has to get paid for that episode anyway. So it’s interesting to see how producers may use this, how it may become a tool to use where a performer isn’t available for travel due to travel conflicts or conflicting productions. And instead of kind of rejiggering the entire production schedule for that one scene, the producer may just elect to use an employment-based digital replica, pay the talent that rate for that particular episode, and move on.

Jamie

Right.

Scott

We’ll see. One thing is for certain: I think last year, digital, moving digital AI generative content wasn’t really quite ready yet, but I think it is now.

Jamie

Yeah, I agree with you, Scott. The AI technology is changing every day.

Scott

Right, I mean, just recently, at least on the date that we recorded this, just recently, OpenAI released Sora, which, if you look at it, it’s pretty amazing. It’s AI-generated graphic content. It still has its problems, for sure. It’s not ready for primetime yet. But looking at this as the beginning of where we’re going to go for video generative AI content, it will be ready for primetime really, really soon. So I guess it was a really good thing that SAG spent so much time in negotiating these terms for the 2023 changes to the NBA, because if they would have waited, they might have been behind the eight ball.

Jamie

Thanks for listening to this episode of “The Briefing.” We really hope you enjoyed the episode. And if you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. If you have any questions about the topics that we covered today, please leave us a comment.