“Although we have two recent decisions from the Northern District of California in which the judges found that Anthropic’s and Meta’s training were fair use because the training of [large language models (LLMs)] was ‘transformative,’ the rulings are rather limited,” Yelena Ambartsumian, founding attorney at Ambart Law, told PYMNTS.
The two court cases are Bartz v. Anthropic and Kadrey v. Meta. The rulings in late June on these two lawsuits offer “the first significant judicial guidance” on the application of the fair use doctrine to model training, according to a July 3 blog post from global law firm Reed Smith.
A closer look at the rulings shows that tech companies training their artificial intelligence models on copyrighted content are not home free, the post said. For Anthropic, the judge ruled that AI model training was fair use for its legally acquired books, but not for pirated books.
That’s why the judge allowed a separate infringement case to proceed over Anthropic’s download of millions of works from shadow libraries. A trial on those claims is expected later this year, VKTR reported June 27.
Meta, meanwhile, downloaded copyrighted books from unauthorized online sites, so the court did not focus on fair use but rather on the 13-author plaintiffs’ inability to prove they were harmed, CNBC reported June 25.
“While the Meta and Anthropic cases were definitely positive for AI developers, they should not be taken as definitive on the issue of fair use in using copyrighted materials to train AI programs,” Thomas McNulty, attorney at Lando and Anastasi, told PYMNTS.
“The Anthropic court found that competition from non-infringing works is not the sort of thing that copyright law protects, so there is a split in the handling of this factor that will likely be addressed on appeal,” McNulty added.
As for the Meta decision, it “effectively sets forth a road map for plaintiffs in later-filed suits, particularly as the Meta court deemed this factor [of market harm] the ‘most important’ in the fair use analysis,” McNulty said.
The rulings raise several legal questions. If an AI produced a result that was “substantially similar to a copyrighted work on which an AI program was trained, would there be liability for infringement?” McNulty said.
Also, McNulty said, “Who would the liable party be? The entity that trained the AI and used the infringed work as a part of the training, the person who input the prompts that led to the infringing output, the entity that subsequently published the infringing output, or some combination of the three?”
See also: AI Firm Cohere Sued by Publishers Over Copyright Infringement
Emboldening Tech Companies
For now, the rulings seem to be emboldening tech firms.
“It’s a green light for the most common approaches AI companies have taken to model training,” Cecilia Ziniti, CEO of GC AI and a former general counsel, told PYMNTS.
Still, she cautioned, “it’s not an all clear,” citing pending lawsuits including The New York Times v. OpenAI and Disney v. Midjourney.
Irina Tsukerman, an attorney and president of Scarab Rising, said the rulings signal an erosion of control for creators.
“Copyright has long protected the right not just to profit from a work, but to decide how and when it is used,” she said. “Now, that control is slipping away.”
Training datasets is often opaque and sprawling, so creators are left with little recourse, she said.
“The burden increasingly falls on artists and writers to prove that an AI-generated output is a direct copy, a nearly impossible task,” Tsukerman said.
Shane Lucado, founder and CEO of legal search firm InPerSuit, told PYMNTS that “these decisions may mark the end of copyright as a defensive shield for solo creatives. It is becoming a tool for big fights between companies with billions at stake. Small publishers, musicians and independent authors are getting folded into the data layer of corporate training sets.”
However, not all experts said the decisions present an existential threat to creators. Wyatt Mayham, CEO of Northwest AI Consulting, told PYMNTS that he believes a licensing market is beginning to take shape.
“The courts have basically said, ‘Training can be fair use, but piracy is still piracy,’” Mayham said.
HarperCollins offered authors $2,500 per book to let AI models train on their works, he said.
“Other publishers are soon to follow suit,” Mayham said.
Mayham said he also does not think the rulings are the “apocalypse that people are painting it out to be.” He pointed out that 1,100 authors signed a petition opposing the HarperCollins deal.
“This ends up creating a ton of leverage for creators in their licensing negotiations,” Mayham said. “Everyone will end up getting paid.”
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