
Publication
Infringement risk relating to creation and use of the output of a generative AI system
Where the Output of a generative AI system is the same or substantially similar to a third party’s copyright work
Global | Publication | May 6, 2016
The recent introduction of the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016 (Bill) reflects the Federal Government’s commitment to further its National Innovation and Science Agenda. The measures should help in boosting the use of pooled venture capital focused funds as a way of channelling investor capital into otherwise cash starved start ups in the technology and innovation sectors. In the second reading speech, the Treasurer stated:
“The tax incentives for funding provided through venture capital limited partnerships [VCLP] including early stage venture capital limited partnerships [ESVCLP] are designed to attract investments at the growth stage of a company’s development. At this stage, entrepreneurs can face further difficulties accessing funding, despite typically receiving a few rounds of initial funding, as they are not yet able to market themselves for public or broader investor buy-in.”
A key plank is the introduction of a new 10% tax offset available to fund investors. The tax offset will supplement the existing tax concessional status of investments into such vehicles.
The Government has also used this as an opportunity to relax some of the strict parameters for operation of complying venture capital limited partnership structures and that have to date discouraged many fund managers from using such vehicles to capture investor capital.
Coincidentally, the Bill complements the Significant Investor Visa regime, which, since July 2015, mandated that aspiring high net worth migrants invest $500,000 of their $5 million Australian investment into a complying venture capital fund for a minimum 4 year holding period.
This article aims to provide a summary of the key measures related to investments in ESVCLPs. Some of the measures also apply to VCLPs and AFOFs registered with Innovation Australia.
The changes are expected to take effect from 1 July 2016, and complement the existing broad based investor tax exemption potentially available to complying investments in ESVCLPs.
Key Points
The high risk nature of tech start-ups and the relatively cautious Australian attitude towards venture capital (at least relative to the United States) has significantly limited the amount raised in pooled venture funds. The new tax offset regime will complement the changes made (in July 2015) to the significant investor visa (SIV) regime, and hopefully deliver a new source of investor capital from high net worth non-resident individuals wishing to access the SIV visa.
Broadly, the SIV operates as a provisional visa that provides a pathway to permanent residency for SIV holders who meet certain requirements. An SIV applicant must invest at least $5 million in complying investments over four years, allocated as follows:
The existing ESVCLP regime contains a number of integrity measures that need to be met by general partners in order to access certain tax exemptions/concessions. The Bill will relax some of the measures, as summarised below.
Key Measures:
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Where the Output of a generative AI system is the same or substantially similar to a third party’s copyright work
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The approach and requirements for intellectual property rights to subsist in computer-generated works vary from jurisdiction to jurisdiction.
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Generative AI systems are trained using vast amounts of data, often taken from sources in the public domain that may be protected by copyright or other intellectual property rights, such as, in the UK and EU, a database right.
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