A federal appeals court ruled that art created autonomously by artificial intelligence cannot be copyrighted, saying that at least initial human authorship is required for a copyright.

The ruling Tuesday upheld a decision by the U.S. Copyright Office denying computer scientist Stephen Thaler a copyright for the painting “A Recent Entrance to Paradise.”

The picture was created by Thaler’s AI platform, the “Creativity Machine.”

The “Copyright Office’s longstanding rule requiring a human author … does not prohibit copyrighting work that was made by or with the assistance of artificial intelligence,” a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia said in its unanimous ruling.

“The rule requires only that the author of that work be a human being — the person who created, operated, or use artificial intelligence — and not the machine itself,” the panel said.

The panel noted that the Copyright Office “has allowed the registration of works made by human authors who use artificial intelligence.”

Copyright grants intellectual property protection to original works, giving their owners exclusive rights to reproduce the works, sell the works, rent them and display them.

Tuesday’s ruling hinged on the fact that Thaler listed the “Creativity Machine” as the sole “author” of “A Recent Entrance to Paradise” when he submitted a registration application to the Copyright Office in 2018.

Thaler listed himself as the picture’s owner in the application.

Thaler told CNBC in an interview that the Creativity Machine created the painting “on its own” in 2012.

The machine “learned cumulatively, and I was the parent, and I was basically tutoring it,” Thaler said.

“It actually generated [the painting] on its own as it mediated,” said Thaler.

He said his AI machines are “sentients” and “self-determining.”

Thaler’s lawyer, Ryan Abbott, told CNBC in an interview said, “We do strongly disagree with the appeals court decision and plan to appeal it.”

Abbott said he would first ask the full judicial lineup of the Circuit Court of Appeals to rehear the case. If that appeal is unsuccessful, Abbott could ask the U.S. Supreme Court to consider the issue.

The attorney said the case detailed “the first publicized rejection” by the Copyright Office “on the basis” of the claim that a work was created by AI.

That denial and the subsequent court rulings in the office’s favor, “creates a huge shadow on the creative community” he said, because “it’s not clear where the line is” delineating when a work created by or with the help of AI will be denied a copyright.

Despite the ruling, Abbott said he “was very pleased to see that the case has been successful in drawing public attention to these very important public policy issues.”

The Copyright Office first denied Thaler’s application in August 2019, saying, “We cannot register this work because it lacks the human authorship necessary to support a copyright claim.”

“According to your application this work was ’created autonomously by machine,” the office said at the time.

The office cited an 1884 ruling by the Supreme Court, which found that Congress had the right to extend copyright protection to a photograph, in that case one taken of the author Oscar Wilde.

The office later rejected two requests by Thaler for reconsideration of its decision.

After the second denial, in 2022, Thaler sued the office in U.S. District Court in Washington, D.C., seeking to reverse the decision.

District Court Judge Beryl Howell in August 2023 ruled in favor of the Copyright Office, writing, “Defendants are correct that human authorship is an essential part of a valid copyright claim.”

“Human authorship is a bedrock requirement of copyright,” Howell wrote.

Thaler then appealed Howell’s ruling to the D.C. Circuit Court of Appeals.

In its decision Tuesday, the appeals panel wrote, “This case presents a question made salient by recent advances in artificial intelligence: Can a non-human machine be an author under the Copyright Act of 1976?”

“The use of artificial intelligence to produce original work is rapidly increasing across industries and creative fields,” the decision noted.

“Who — or what — the ‘author’ of such work is a question that implicates important property rights undergirding growth and creative innovation.”

The ruling noted that Thaler had argued that the Copyright Office’s human authorship requirement “is unconstitutional and unsupported by either statute or case law.”

Thaler also “claimed that judicial opinions ‘from the Gilded Age’ could not settle the question of whether computer generated works are copyrightable today,” the ruling noted.

But the appeals panel said that “authors are at the center of the Copyright Act,” and that “traditional tools of statutory interpretation show that within the meaning of the Copyright Act, ‘author’ refers only to human beings.”

The panel said that the Copyright Office “formally adopted the human authorship requirement in 1973.”

That was six years after the office noted in its annual report to Congress that, “as computer technology develops and becomes more sophisticated, difficult questions of authorship are emerging.”

Abbott, the attorney who represented Thaler in the appeal, told CNBC that the Copyright Act “never says” that “you need a human author at all for a work … or a named author.”

Abbott noted that corporations are granted copyrights, as are authors who are anonymous or pseudonymous.

Protecting a ‘beautiful picture’

The Copyright Office, in a statement to CNBC, said it “believes the court reached the correct result, affirming the Office’s registration decision and confirming that human authorship is required for copyright.”

Thaler said that he will continue to pursue his bid for a copyright for the painting.

“My personal goal is not to preserve the feeling of machines,” Thaler said. “It’s more to preserve, how should I say, orphaned intellectual property.”

“A machine creates a beautiful picture? There should be some protection for it,” Thaler said.

The Federal Trade Commission is going after an e-commerce company that allegedly took millions of dollars from consumers as part of a “passive income” scheme, which spun up Amazon storefronts on their behalf and promised “insane returns” that were higher than the stock market.

The FTC said Tuesday it filed a lawsuit against the company, called Click Profit; its co-founders Craig Emslie and Patrick McGeoghean; and two other business associates. It also asked a judge to bar the parties from doing business temporarily.

The case is the latest example of the FTC cracking down on e-commerce “automation” services. These companies launch and manage online storefronts on behalf of clients, who pay money for the services and the promise of earning tens of thousands of dollars in “passive income.” The companies often make extravagant claims about potential earnings and the use of artificial intelligence technology to guarantee profits. Despite their assurances, consumers frequently end up losing money.

Click Profit, which also operated under the names FBALaunch, Automation Industries and PortfolioLaunch, promised investors they would “build you a massively profitable e-commerce store from the ground up” by selling products on Amazon, Walmart and TikTok, according to the FTC.

The company charged consumers between $45,000 to $75,000 for the initial investment, plus an additional $10,000 or more to pay for inventory, the FTC alleged in its complaint, which was filed in the U.S. District Court for the Southern District of Florida. Click Profit took up to 35% of any profits from their customers’ stores, the complaint states.

The company claimed the business opportunity was “safe, secure and proven to generate wealth,” according to marketing materials referenced in the FTC’s complaint. They posted screenshots of purportedly successful Amazon storefronts, including one they claimed generated product sales of over $540,000 in one month.

Emslie often appeared in TikTok videos and other online ads to pitch prospective consumers. In one ad, he said that “the stock market, real estate or precious metals will never be able to offer you” the level of security offered through investing in Click Profit, according to the FTC’s complaint. Other TikTok videos show him appearing alongside an image of Warren Buffett while “fanning himself” with wads of cash, per the complaint.

Click Profit talked up its expertise by claiming it had product sourcing partnerships with legitimate brands, including Nike, Disney, Dell, Colgate and Marvel, the complaint alleges. It also claimed to have spent $5 million to build a “super computer” and other AI technologies to locate the “most profitable products,” claiming the super computer had generated “around $100 million in sales,” per the complaint.

The company even implied that investors’ online store could be bought out by venture capital firms connected with Click Profit “at a 3-6x multiple,” the FTC alleged.

“In reality, the highly touted AI technology and brand partnerships do not exist, and the promised earnings never materialize,” the FTC said in its complaint.

Amazon suspended or terminated about 95% of Click Profit’s stores after they violated Amazon’s seller policies, the FTC alleged. After accounting for Amazon’s fees, more than one-fifth of Click Profit’s stores on the platform earned no money at all, while another third earned less than $2,500 in gross lifetime sales, the FTC stated.

As a result, most consumers were unable to recoup their investments and “some are saddled with burdensome credit card debt and unsold products,” according to the FTC, which also said that Click Profit often refused to refund victims their investments and threatened them with legal action if they posted publicly about their experience.

One unnamed consumer mentioned in the lawsuit invested “his life’s savings” in Click Profit and was later terminated as a client “with nothing to show for his payments,” the complaint states. He posted a negative review online and was allegedly approached by Emslie’s attorney, who threatened to sue the consumer and “take everything he and his wife owned,” per the complaint.

The consumer took the reviews down, then asked Emslie whether he could receive a partial refund, according to the FTC.

“The attorney told the consumer that Emslie had responded, ‘F*** off,’” the FTC alleged.

Representatives for Emslie and Click Profit didn’t immediately respond to a request for comment.

The FTC alleges Click Profit violated the FTC Act, the Consumer Review Fairness Act and the Business Opportunity Rule. It seeks to permanently prohibit Click Profit from doing business, as well as monetary relief for the victims.

Flagging global sales and Elon Musk’s increasingly outspoken political activities are combining to rock the value of Tesla.

Shares in the once-trillion-dollar company saw their worst day in five years this week. Year to date, Tesla’s stock has plunged 41% — though it is still up by about 36% over the past 12 months.

On Monday, the stock was down another 5%.

For Musk, Tesla’s shares remain his primary source of paper wealth, though he has also turned his stake in SpaceX into a personal lending tool. But it was proceeds from selling Tesla shares that helped Musk complete his acquisition of Twitter, now known as X.

Musk’s wealth also allowed him to help vault Donald Trump into a second presidential term. Even as Musk’s net worth has diminished as a result of Tesla’s recent share-price declines, data suggests he is in no danger of losing his title as the world’s wealthiest person.

Musk has said on X that he is not concerned about Tesla’s recent drop in value. Still, evidence suggests the company is entering a period of transition.

A spokesperson for Tesla did not respond to a request for comment.

Musk’s wealth has propelled him to a global presence that lacks precedent — and has polarized world opinion about the tech entrepreneur in the process. Any weakening of his financial position, therefore, could undercut his influence in the political and tech spaces where he now commands outsize attention.According to Bank of America, Tesla’s European sales plummeted by about 50% in January compared with the same month a year prior.

Some say this is attributable to a growing distaste for Musk, who has begun dabbling in the continent’s politics in the wake of his successful support of Trump’s candidacy last year.

Others note Tesla’s European market is facing increased competition from the Chinese electric-vehicle maker BYD, which has telegraphed ambitious plans for expansion on the continent.  

A more decisive blow to Tesla’s near-term fortunes may be emanating from China itself. There, Tesla’s shipments plunged 49% in February from a year earlier, to just 30,688 vehicles, according to official data cited by Bloomberg News. That’s the lowest monthly figure registered since July 2022 — amid the throes of Covid-19 — when it shipped just 28,217 EVs, Bloomberg said.

Over a double cheeseburger and fries, Robert F. Kennedy Jr. told Fox News host Sean Hannity earlier this month of his plans to improve the country’s health by incentivizing companies to step away from processed foods.

From across the red high-top table of a Florida Steak ’n Shake, the health and human services secretary went on to praise the Indianapolis-based fast-food chain as a shining example of change since it began cooking its shoestring fries in beef tallow instead of one of the many seed oils that have become targets of Kennedy’s health agenda.

“Steak ’n Shake has been great,” Kennedy said. “We’re very grateful to them for RFK’ing the french fries.”

The nationally televised praise marked the latest conservative endorsement for Steak ’n Shake, a 91-year-old company with 450 locations nationwide that has become one of the most high-profile businesses to support Kennedy’s “Make America Healthy Again” agenda — a move that has been boosted by Republican politicians and MAGA influencers including Rep. Anna Paulina Luna, Charlie Kirk, Laura Loomer, Kari Lake, Tony Shaffer and Benny Johnson.

“I just had a cheeseburger and fries cooked in beef tallow today for lunch! Delicious!!” Rep. Marjorie Taylor Greene, R-Ga., wrote on X.

At a time when many companies might be looking to avoid politics, Steak ’n Shake is opting to publicly align itself with Kennedy and other high-profile conservatives. On social media, the brand has transformed its feed from the usual steam of burgers and shakes into a near nonstop stream of Trump-adjacent iconography: Elon Musk, Teslas, Fox News clips and even a red hat emblazoned with the words “Make Frying Oil Tallow Again,” a version of which is available for purchase on Kennedy’s MAHA merchandise website.

The company has not publicly embraced Trump or any of his policies but has been full-throated in its embrace of Kennedy.

“We support MAHA,” Steak ’n Shake Chief Operations Officer Dan Edwards told NBC News last week. “Restaurant chains like ours would like to meet customer demand for better quality.”

Edwards said support for the company is “across the political spectrum” and that “there is nothing political about great-tasting fries.” He did not answer specifically whether the company had any fears about alienating customers who do not support Kennedy’s MAHA agenda or Trump.

“We are grateful to Secretary Kennedy for his leadership and for raising awareness about beef tallow,” he added.

It’s a bold move for a company that has weathered a rocky financial situation that forced the reported closure of 200 locations since 2018. While there is a wide array of relatively new and small brands that have sought to capitalize on the strength and passion of the MAGA movement, few, if any, established companies have shifted their public identity so quickly.

Politics aside, Steak ’n Shake’s choice to focus on seed oils comes with its own controversy.

The MAHA agenda, helmed by Kennedy, features several health-focused concerns of questionable veracity, including skepticism of the food and drug industry, fluoride in water and vaccines. Seed oils have also long been a target of unfounded theories about negative health impacts, some of which Kenney has touted, calling them “one of the most unhealthy ingredients we have in foods.”

Health experts have sought to counter those claims, noting that replacing seed oils with saturated fats offers little to no dietary benefit and can end up doing harm.

Maya Vadiveloo, an associate professor at the University of Rhode Island who specializes in nutrition, said it is “well established that saturated fats are linked to an increased risk of heart disease, while vegetable oils, including oils from seeds, protect heart health.”

Edwards said that while the burger brand supports Kennedy’s MAHA movement, Steak ’n Shake CEO Sardar Biglari, who acquired the company in 2008, has been trying to move to beef tallow for some time.

“My boss asked, ‘Why should Europeans have better fries than Americans?’” Edwards said. “My boss said one day that we need to RFK the fries. So, a verb was invented.”

As for the company’s sudden shift on social media, Edwards said the posts “sometimes are aspirational,” noting that “sometimes we refer to space or Mars.”

“NASA and Musk/SpaceX are the only two viable players in the area. We have referred to both,” Edwards said. “Regardless of politics, we admire Musk’s accomplishments.”

In February, Tesla wrote on X that it had signed a deal to build charging stations at several Steak ’n Shake locations after the fast food joint responded to Musk’s compliment on its fries. Edwards said discussions with Tesla and Steak ’n Shake started more than 18 months ago.

Steak ’n Shake’s shift hasn’t been entirely smooth. The Bulwark reported that the chain’s move inspired some in the MAHA world to look deeper at the company’s food practices, finding that its fries were precooked in seed oils. The company later acknowledged on its website that some of its foods arrived at locations prefried, and that the initial frying had been in seed oils.

However, Edwards said, because Kennedy has advocated for the removal of seed oils “completely,” the company is making a commitment to do so. And while he did not provide details as to how Hannity’s interview with Kennedy came about, he did say that when the Fox News host “calls, we answer.”

“Sean Hannity is the best. He knows the restaurant business,” he said. “We are honored Sean Hannity and Secretary Kennedy visited Steak ’n Shake.”