For most people, college is the first time to gain independence from your parents. But when college kids have this sort of freedom, they are prone to making many mistakes. And many of these mistakes involve money.

While many of these financial mistakes are made, they can certainly be avoided. In this article, we discuss the most common types of financial mistakes, and what you can do to avoid them.

Mistake #1: Not having a budget

The first mistake college students make is not capping how much money they spend each month. College students tend to rack up the bill on a lot of items, which can include food, coffee, and alcohol. And the solution to this problem is quite simple:

Solution: Create a budget

When college students create a budget, they can both track their expenses and see where their money is going. Having this in place will likely stop them from overspending. And it’s very easy to do. In fact, there are several different apps out there that can help college students create a budget and track what they buy.

Mistake #2: Impulse spending

The second mistake is when college students make purchases on a whim. This can happen when college students don’t track their expenses, or make impulse purchases with a credit card. When college students do this, they aren’t thinking of the long-term impact of their purchases. And this drains their funds very quickly.

Solution: Pay off the credit card in full

The best solution to a college student’s impulse spending is making sure that they pay off their credit card bill in full every month. Doing this will teach them a few things. First, it will teach them to use the card responsibly. When this happens, they won’t make as many bad purchases, and they may avoid any high-interest debt in the future. Second, it will teach them to live within their means. When college students live frugally, their monthly credit card bills will end up being much lower.

Mistake #3: Financial aid mistakes

Mistake #3 involves making mistakes with financial aid. One such mistake involves using the financial aid on nonessential items, including clothes and electronics. And once college students graduate, it is also common for them to ignore repaying their student loans.

Solution: Know the terms of the financial aid

In order to prevent the misuse of financial aid, college students must understand the aid they are receiving. This involves reading the terms of the aid they are receiving. Once college students do this, they will understand what they can and can’t use the aid for, what the interest rates are, and when they must pay off their loans. And when college students become aware of these things, they will likely spend their aid wisely. They may even start paying off their debts during college.

Mistake #4: Not setting aside money

The fourth mistake involves not setting aside money for the future. Unfortunately, colleges don’t teach financial education. Because of this, college students don’t fully understand the importance of investing and having an emergency fund.

Solution: Set up new accounts

To solve this problem, college students can set up new accounts. First, they can set up a savings account. If any unexpected expenses pop up, the funds from the savings account can cover them. Second, they can set up an investment portfolio. Every month, college students can transfer funds into the account. Over time, their portfolios will likely increase in value. When college students do these things, it will help them financially both in the present and in the future.

Mistake #5: Relying too heavily on their parents

The fifth and final mistake college students make is only relying on their parents for money. When this happens, college students have no independence because they only have one source of income.

Solution: Get a part-time job

One way to solve this issue would be for college students to get a part-time job. Once this happens, they will have a second stream of income. This can be used to cover other expenses like groceries, rent, and vacations.

Conclusion

College is the time for people to learn to be independent and functioning adults. If college students implement these solutions, they will be much more financially savvy both in college and in their adult life.

By: Ted Sutton, Esq.

Intro

Many people have used AI to generate new artworks. A few of them can generate an image. And as we saw with the artificial hit “Heart on My Sleeve” meant to sound like Drake and The Weeknd, AI can also generate new songs.  But if you make these new works, you could face liability.

AI stands for artificial intelligence. This intelligence simulates that of humans, as it teaches machines to learn, perform tasks, and make decisions. Hot new search engines such as ChatGPT and Google Bard are forms of AI.

Other AI programs such as Midjourney and Stable Diffusion generate paintings. Users can input text describing the painting they want, and the programs will generate a painting for them. While you may love the final painting, you may hate the fact that you could be sued for copyright infringement.

What is a Copyright?

A copyright is any expressive work of art made by someone. These works can include books, movies, songs, paintings, and even sculptures. People who make these works can register them with the Copyright Office to obtain copyright protection.

What is Copyright Infringement?

A person can infringe on another’s copyright if they either reproduce the work, or make a similar work without the copyright owner’s permission. With people, infringement is more straightforward. But when AI infringes on others copyrights, the issue is much more complicated.

AI can infringe on other’s copyrights in two ways.

AI Training Process

The first way AI can infringe on copyrights is through its training process. All new forms of AI are trained to create new expressive works that could be copyrightable. But in order to train the AI to do this, its programmers need to show it large amounts of data from the internet. Some of this data, however, is copyrighted.

AI Outputs

The second way AI can infringe on copyrights is by the output. When a user enters text into an AI program, the output, or the final product, may be very similar to an already copyrighted work.

Is it Infringement?

Under current US case law, a copyright holder can show copyright infringement by proving two things:

1. That the infringer has access to the copyrighted work; and
2. That the infringer’s work was “substantially similar” to the copyrighted work.

Let’s use “Heart on My Sleeve” as an example here. Before generating the song, the AI that made it certainly had access to copyrighted works by both Drake and the Weeknd. How else would the voices in the song sound exactly like them?

Also, while you could make the argument that “Heart on My Sleeve” was a different song, it’s still obvious that it sounds “substantially similar” to anything Drake or The Weeknd produces.

Because of this, either the AI user or the AI company could be liable for copyright infringement.

Does the AI have a defense?

One defense that AI companies can assert is the fair use defense to copyright infringement. If an infringer copies the copyrighted work and uses it as a “fair use,” that infringer will be protected. Fair use of a copyrighted work can include criticisms, commentary, satire, news reporting, and teaching.

But does using copyrighted work in the AI training process, or creating an output that is similar to a copyrighted work, constitute a fair use?

Courts look at 4 factors to determine if a use is fair:

1. The purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes;
2. The nature of the copyrighted work;
3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. The effect of the use upon the potential market for or value of the copyrighted work

We’ll use “Heart on My Sleeve” again.

For the first factor, if the use is more commercial in nature, it will likely not be fair use. It is highly unlikely that the use would be for educational purposes. Plus, the person who posted the song made several thousand dollars after its release. So, under the first factor, “Heart on My Sleeve” is likely not a fair use.

For the second factor, if the nature of the copyrighted work was creative or imaginative, then the infringing work is likely not a fair use. Clearly, because Drake and the Weeknd’s are world famous artists, their copyrighted works are creative. Because of this, “Heart on My Sleeve” is likely not a fair use under the second factor.

The third factor, however, isn’t as clear. An AI company could argue that because the AI looked at many different songs, “Heart on My Sleeve” took a small and insubstantial amount from Drake and the Weeknd’s copyrighted works. Because of this, the third factor could constitute fair use.

The fourth factor focuses on the economic effect of the infringing work. If the infringing work would cause economic harm to Drake and the Weeknd, then the work likely would not be a fair use. As described before, “Heart on My Sleeve” made thousands of dollars. That is money that could have gone to Drake and the Weeknd. Because of this, “Heart on My Sleeve” is likely not fair use under the fourth factor.

Drake and The Weeknd could claim that the AI-generated “Heart on My Sleeve” is not fair use. However, a court could rule either way under this untested area of copyright law.

Who owns the Copyright?

Another question is if a copyright owner sues for copyright infringement, who is the rightful owner of the copyright?

Copyright owners are usually the “authors” of the copyrighted work. But when a user generates a work by using AI, it is unclear who the true “author” of the copyrighted work is. Is it the person who entered the text? Or is it the AI software that was both trained to and actually generated the image?

Another question to ask: who should you sue for copyright infringement? The AI company, or the person who used the AI?

Also, would it be fair to hold the user liable? They didn’t know what the final product would look like. And they certainly didn’t train the AI by using other people’s copyrights.

Lawsuits

Some people have already filed lawsuits against AI companies. Getty Images has already filed a lawsuit against Stable Diffusion. Getty alleges that Stable Diffusion improperly used their photos to train its AI, in violation of the copyrights that Getty holds.

Individuals have also filed suit against these AI companies. Last year, a group of artists sued several AI companies. They allege that the AI companies both improperly used their photos to train the AI, and that the AI’s outputted photos are substantially similar to their own works.

Because AI brings a new set of untested issues to copyright law, it is unclear who the court would rule for.

Solutions

As of right now, there are far more questions than there are answers. But in order to have these much-needed answers, we will need several things to happen.

First and foremost, Congress needs to act as soon as possible. They need to determine who owns the copyright to AI-generated works, who authored the work, and when exactly does an AI-generated work infringe on another’s copyrighted work? If they don’t, then there’s a good chance that innocent people who use the AI could be sued for copyright infringement.

To protect themselves from these lawsuits, AI users will need to demand more from the AI companies. Before using their services, companies should inform users that they have permission to both use copyrighted works in their training data and the outputted result. This will ensure that innocent users will not be sued by copyright owners.

But before they can do this, AI companies will need to get permission from the copyright holders themselves. These companies will not only need to obtain the consent of copyright owners, they will also need to compensate them. It is only fair for copyright owners to receive a payment if they agree to have the AI use their works.

Copyright holders should also do their due diligence. They should be on the lookout to see if AI companies are using their works. If they do, they should demand compensation.

Lastly, insurance companies and third-party vendors should demand from AI companies that they are licensed to use others works. This will help protect all parties from liability if a copyright infringement suit is brought.

Conclusion

AI is changing the world at a rapid pace. Some of that change may be welcomed. However, this changed is certainly not welcomed by copyright owners. We need to act fast to address these issues. If not, innocent people could be liable through no fault of their own.

Resources

• https://hbr.org/2023/04/generative-ai-has-an-intellectual-property-problem
• Generative AI Has an Intellectual Property Problem (hbr.org)