Tag: Infringement

Infringement – trademark or copyright

Enduring (Non-AI) Legal Issues

With so much attention being given to the legal issues that AI-powered technologies are generating, it can be easy to overlook or underestimate the importance of long-standing legal issues having nothing to do with artificial intelligence. While it would be neither possible nor particularly useful to catalog all of them in a single blog post, it might be helpful to highlight a few key legal issues that are developing alongside developments in AI law.

With so much attention being given to the legal issues that AI-powered technologies are generating, it can be easy to overlook or underestimate the importance of long-standing legal issues having nothing to do with artificial intelligence. While it would be neither possible nor particularly useful to catalog all of them in a single blog post, it might be helpful to highlight a few key legal issues that are developing alongside developments in AI law.

Copyright Law

The core principles of intellectual property remain anchored in traditional law. In that connection, it is important to understand the philosophy of copyright. Copyright is not the only kind of intellectual property there is, but it is by far the most common. Everyone who has ever written a story or a poem, scribbled a doodle, or composed an email message is very likely a copyright owner. Merit is not a requirement. In theory, even that terrible drawing of a turkey you made in first grade by tracing your fingers and hand on paper and drawing a head and two legs on it may be protected by copyright. Whether it makes sense to pay the filing fee to register something like that is a different story.

A key issue in copyright law that continues to develop is fair use. Courts have been grappling with how to interpret and apply the four vaguely worded factors they must to make findings about whether a particular otherwise-infringing use is “fair” or not. The idea of “transformative use” is at the center of this evolving doctrine. Andy Warhol Foundation for the Visual Arts v. Goldsmith, decided in 2023, is a leading case in this area now. Other limitations on copyright infringement liability, such as the safe harbors set out in the Digital Millennium Copyright Act (DMCA), are also important. There are also evolving protections for sound recordings and licensing. Other topics in copyright law include such things as the registration requirement, damages for infringement, diversity, copyright estoppel, the limitations period, the extent of protection for shorter works, compulsory e-book licensing, and circumvention of copyright protection measures. 

The Internet Archive lawsuit addressed the phenomenon of digitized e-books and the impact on authors of making them freely available to readers via an online digital library. 

The new administrative court for resolving smaller copyright claims, the Copyright Claims Board, is one of the more significant developments in copyright law in a long time. Find out what to know about the new CCB. 

Read about the top copyright cases of 2021.

Read about the top copyright cases of 2022.

Read about the top copyright cases of 2024.

Meanwhile, more and more works continue to enter the public domain. 

Trademark Law

There has been a surge in interest in trademark law ever since the COVID-19 phenomenon. Many small brick-and-mortar businesses had to shut down as people were instructed to quarantine at home. While quarantining at home, a lot of people had the same idea: Starting a home-based, online business. Those new online businesses needed to have names. The USPTO was soon flooded with an unusually large number of trademark registration applications. Competition in the trademark space became fierce. Descriptiveness and likelihood-of-confusion challenges increased. New laws and procedures, such as the Trademark Modernization Act, were enacted to clear more room for new businesses by cancelling unused trademarks and cancelling registrations for classes of goods and services no longer being used by the trademark owners. Interest in nontraditional marks like color marks, trade dress, and sound and olfactory trademarks (smell marks) has also grown.

The clash between First Amendment values and trademark interests continues to surface from time to time. Courts have addressed trademark speech rights on several occasions now. 

And of course, distinctiveness, likelihood of confusion, and registration disputes are ongoing. 

Other Legal Topics

Constitutional law acquired renewed relevance in 2025, with issues running the gamut from freedom of speech to the separation of powers.

Dramatic changes in family structures and sex roles have been accompanied by major changes in family law, particularly in regard to the custody of children. More jurisdictions are warming up to the ideas of joint custody and shared parenting.

E-commerce law, too, is rapidly evolving, as more and more businesses supplement their physical presence with an online one. A growing number of businesses operate exclusively online. This has raised a wide range of legal issues entailing significant permutations of existing laws, and in some cases, brand new laws and legal frameworks.

As I mentioned at the outset, it would be neither possible nor useful for me to catalog every new legal development in a blog like this. The best I can do is highlight a few of them from time to time.

In this category is a post I wrote about a continuing legal education program I presented with Donald Hubin (National Parents Organization) and Professor Daniel Fernandez-Kranz:

Joint Custody and Equal Shared Parenting Laws

Pertinent to e-commerce law is an article I wrote about the sales and use tax “nexus” requirement for taxes on online sales: 

“Sales and Use Tax Nexus: The Way Forward for Legislation” by Tom James

 

Foundational Context: Major IP Developments of 2023

This section is a repost of an article I wrote in 2023 describing major developments in various areas of intellectual property law that took place that year. While I have broadened the scope of the discussion, it can still be useful to look back at what went on during that pivotal year, as it provides important context for the developments in IP law that are taking place now.

Copyright: Fair Use

Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith et al.

I’ve written about this case before here and here. The Supreme Court issued a ruling in the case in May. The decision is significant because it finally reined in the “transformative use” doctrine that the Court first announced in Campbell v. Acuff-Rose Music back in 1994. In that case, 2 Live Crew had copied key parts of the Roy Orbison song, “Oh, Pretty Women” to make a parody of the song in its own rap style. The Court held that the 2 Live Crew version, although reproducing portions of both the original song and the original recording of it without permission, transformed it into something else. Therefore, even though it infringed the copyright, the 2 Live Crew version was for a transformative purpose and therefore protected as fair use.

In the thirty years since Campbell, lower courts have been applying the “transformative use” principle announced in Campbell in diverse and divergent ways. Some interpretations severely eviscerated the copyright owner’s exclusive right to make derivative works. Their interpretations often conflicted. What one circuit called transformative “fair use” another circuit called actionable infringement. Hence the need for Supreme Court intervention.

In 1984, Vanity Fair licensed one of photographer Lynn Goldsmith’s photographs of Prince to illustrate a magazine article about him. Per the agreement, Andy Warhol made a silkscreen using the photograph for the magazine and Vanity Fair credited the original photograph to Goldsmith. Unknown to her, however, Warhol proceeded to make 15 additional works based on Goldsmith’s photograph withour her permission.. In 2016, the Andy Warhol Foundation for the Arts licensed one of them to Condé Nast as an illustration for one of their magazines. The Foundation received a cool $10,000 for it, with neither payment nor credit given to Goldsmith. The Foundation then filed a lawsuit seeking a declaration that its use of the photograph was a protected fair use under 17 U.S.C. § 107. The district court granted declaratory judgment in favor of the Foundation. The Second Circuit Court of Appeals reversed, ruling that the four-factor “fair use” analysis favored Goldsmith. The Supreme Court sided with the Court of Appeals.

Noting that it was not ruling on whether Warhol’s making of works using the photograph was fair use, the Court limited its analysis to the narrow question whether the Foundation’s licensing of the Warhol work to Condé Nast was fair use. On that point, the Court determined that the use of the photograph to illustrate a story about Prince was identical to the use Goldsmith had made of the photograph (i.e., to illustrate a magazine article about Prince.) Unlike 2 Live Crew’s use of “Oh, Pretty Woman,” the purpose of the use in this case was not to mock or parody the original work.

The case is significant for vindicating the Copyright Act’s promise to copyright owners of an exclusive right to make derivative works. While Warhol put his own artistic spin on the photograph – and that might have been sufficient to sustain a fair use defense if he had been the one being sued – the Warhol Foundation’s and Condé Nast’s purpose was no different from Goldsmith’s, i.e., as an illustration for an article about Prince. Differences in the purpose or character of a use, the Court held, “must be evaluated in the context of the specific use at issue.” Had the Warhol Foundation been sued for displaying Warhol’s modifications of the photograph for purposes of social commentary in its own gallery, the result might have been different.

Although the holding is a seemingly narrow one, the Court did take the opportunity to disapprove the lower court practice of ending a fair use inquiry at the moment an infringer asserted that an unauthorized copy or derivative work was created for a purpose different from the original author’s.

Copyright Statute of Limitations and Damages

Warner Chappell Music, Inc. v. Nealy

The U.S. Supreme Court has granted certiorari to review this Eleventh Circuit decision. At issue is whether a copyright plaintiff may recover damages for infringement that occurred outside of the limitations period, that is, infringement occurring more than three years before a lawsuit was filed.

The circuits are split on this question. According to the Second Circuit, damages are recoverable only for acts of infringement that occurred during the 3-year period preceding the filing of the complaint. The Ninth and Eleventh Circuits, on the other hand, have held that as long as the lawsuit is timely filed, damages may be awarded for infringement that occurred more than three years prior to the filing, at least when the discovery rule has been invoked to allow a later filing. In Nealy, the Eleventh Circuit held that damages may be recovered for infringement occurring more than three years before the claim is filed if the plaintiff did not discover the infringement until some time after it first began.

A decision will be coming in 2024.

Artificial Intelligence

Copyrightability

Thaler v. Perlmutter, et. al.

This was an APA proceeding initiated in the federal district court of the District of Columbia for review of the United States Copyright Office’s refusal to register a copyright in an AI-generated work. In August, the district court upheld the Copyright Office’s decision that an AI-generated work is not protected by copyright, asserting that “human creativity is the sine qua non at the core of copyrightability….” For purposes of the Copyright Act, only human beings can be “authors.” Machines, non-human animals, spirits and natural forces do not get copyright protection for their creations.

An appeal of the decision is pending in the D.C. Circuit Court of Appeals.

Infringement

Many cases that were filed or are still pending in 2023 allege that using copyrighted works to train AI, or creating derivative works using AI, infringes the copyrights in the works so used. Most of these cases make additional claims as well, such as claims of unfair competition, trademark infringement, or violations of publicity and DMCA rights.

I have been blogging about these cases throughout the year. Significant rulings on the issues raised in them are expected to be made in 2024.

Trademark: Parody Goods

Jack Daniels’s Properties Inc. v. VIP Products LLC

For more information about this case, read my blog post about it here.

This is the “parody goods” case. VIP Products used the “Bad Spaniels” name to market its dog toys, which were patterned on the distinctive shape of a Jack Daniel’s whiskey bottle. VIP filed a lawsuit seeking a declaratory judgment that its product did not infringe the Jack Daniel’s brand. Jack Daniel’s counterclaimed for trademark infringement and dilution. Regarding infringement, VIP claimed First Amendment protection. Regarding dilution, VIP claimed the use was a parody of a famous mark and therefore qualified for protection as trademark fair use. The district court granted summary judgment to VIP.

The Supreme Court reversed. The Court held that when an alleged infringer uses the trademark of another (or something confusingly similar to it) as a designation of source for the infringer’s own goods, it is a commercial, not an expressive, use. Accordingly, the First Amendment is not a consideration in such cases.

Rogers v. Grimaldi had held that when the title of a creative work (in that case, a film) makes reference to a trademark for an artistic or expressive purposes (in that case, Fred Astaire and Ginger Rogers), the First Amendment shields the creator from trademark liability. In the Jack Daniel’s case, the Court distinguished Rogers, holding that it does not insulate the use of trademarks as trademarks (i.e. as indicators of the source or origin of a product or service) from ordinary trademark scrutiny. Even through the dog toys may have had an expressive purpose, VIP admitted it used Bad Spaniels as a source identifier. Therefore, the First Amendment does not apply.

The Court held that the same rule applies to dilution claims. The First Amendment does not shield parody goods from a dilution claim when the alleged diluter uses a mark (or something confusingly similar to it) as a designation of source for its own products or services.

Trademark: International Law

Abitron Austria v. Hetronic International

Here, the Supreme Court held that the Lanham Act does not have extraterritorial reach. Specifically, the Court held that Sections 1114(1)(a) and 1125 (a)(1) extend only to those claims where the infringing use in commerce occurs in the United States. They do not extend to infringement occurring solely outside of the United States, even if consumer confusion occurs in the United States.

The decision is a reminder to trademark owners that if they want to protect their trademark rights in other countries, they should take steps to protect their rights in those countries, such as by registering their trademarks there.

Patents: Enablement

Amgen v. Sanofi

In this case, the Supreme Court considered the validity of certain patents on antibodies used to lower cholesterol under the Patent Act’s enablement requirement (35 U.S.C. 112(a)).  At issue was whether Amgen could patent an entire genus of antibodies without disclosing sufficient information to enable a person skilled in the art to create the potentially millions of antibodies in it. The Court basically said no.

If a patent claims an entire class of processes, machines, manufactures, or compositions of matter, the patent’s specification must enable a person skilled in the art to make and use the entire class. In other words, the specification must enable the full scope of the invention as defined by its claims. Amgen v. Sanofi, 598 U.S. ____ (2023)

Patents: Executive Power

In December, the Biden administration asserted that it can cite “excessive prices” to justify the exercise of Bayh-Dole march-in rights. The Biden Administration also has continued to support a World Trade Organization TRIPS patent waiver for COVID-19 medicines. These developments are obviously of some concern to pharmaceutical companies and members of the patent bar.

Conclusion

My vote for the most significant IP case of 2023 was Andy Warhol Foundation v. Goldsmith. Lower courts had all but allowed the transformative use defense to swallow up the exclusive right of a copyright owner to create derivative works. The Supreme Court provided much-needed correction. I predicted that in 2024, the most significant decisions would also be in the copyright realm, but that they would have to do with AI. The prediction turned out to be accurate.

Last Exit From Paradise

Copyright law “has never stretched so far, however, as to protect works generated by new forms of technology operating absent any guiding human hand, as plaintiff urges here. Human authorship is a bedrock requirement of copyright.”

The United States Supreme Court has put an end to Stephen Thaler’s crusade for machine rights. Okay, that’s the sensational news article way of putting it.  He wasn’t really crusading for machine rights. He was trying to establish a precedent for claiming copyright in AI-generated works.

I first wrote about this back in May, 2022 (“AI Can Create, But Is It Art?”). At that time, the U.S. Copyright Office had denied registration of “A Recent Entrance to Paradise.” This was an image that was generated by  Thaler’s AI tool, the Creativity Machine. Thaler had sought to register it as a work for hire made by the machine. The Copyright Office denied registration because it lacked human authorship.

The decision was consistent with appellate court decisions suggesting that stories allegedly written by “non-human spiritual beings” are not protected by copyright, although a human selection or arrangement of them might be. Urantia Foundation v. Kristen Maaherra, 114 F.3d 955 (9th Cir. 1997).  Neither are works created by non-human animals, such as a monkey selfie.

Thaler sought review by the federal district court. Judge Howell affirmed the Copyright Office’s decision, writing that copyright law “has never stretched so far, however, as to protect works generated by new forms of technology operating absent any guiding human hand, as plaintiff urges here. Human authorship is a bedrock requirement of copyright.”

The Court of Appeals affirmed the refusal of registration. Thaler petitioned for review by the United States Supreme Court. On March 2, 2026, the Court denied review, without comment.

An argument that Thaler advanced in the petition for certiorari was bascially that because images output by a camera are protected by copyright (See Burrow-Giles Lithographic v. Sarony), images generated by a computer should be, too.

The Copyright Office has since published guidance explaining that using AI as a tool in the creative process does not categorically rule out copyright protection. Rather, assessments must be made on a case-by-case basis about the nature and extent of human creativity that was contributed.

The narrowest interpretation of the Supreme Court’s denial of certiorari is that it did not see a need to disturb the ruling that a machine cannot be an “author,” for purposes of copyright law. The facts of the case did not present an opportunity to opine on whether, and under what circumstances, a human can claim to be an author of an AI-assisted creation.

Trademark News

Buc-ee’s, a popular chain of gas-and-convenience stores in the South, has filed a trademark infringement lawsuit against Mickey’s gas stations.  According to the complaint:

Consumers are likely to perceive a connection or association as to the source, sponsorship, or affiliation of the parties’ products and services, when in fact none exists, given the similarity of the parties’ logos, trade channels, and consumer bases.

Here are the two logos, side by side for comparison:

Buc-ees and Mickey's logos

Trademark infringement occurs when one company’s logo or other mark is used in commerce in a way that is likely to confuse consumers about the source of a product or service. What do you think, folks? Might a weary traveler mistake a moose for a beaver?

Clean responses only, please.

Voice Cloning

Copyright cannot be claimed in a voice. Copyright law protects only expression, not a person’s corporeal attributes.

Nipper, painting of dog listening to phonograph, by Francis Barraud (1898-1899)
Painting of Nipper by Francis Barraud (1898-99); subsequently used as a trademark with “His Master’s Voice.”

 

Voice cloning is one of the generative-AI technologies that I have described as a perfect tool for the age of deception. Now the issues it raises are reaching the courts. 

Lehrman v. Lovo, Inc.

On July 10, 2025, the federal district court for the Southern District of New York issued an Order granting in part and denying in part a motion to dismiss a putative class action lawsuit that Paul Lehrman and Linnea Sage commenced against Lovo, Inc. The lawsuit, Lehrman v. Lovo, Inc., alleges that Lovo used artificial intelligence to make and sell unauthorized “clones” of their voices.

Specifically, the complaint alleges that the plaintiffs are voice-over actors. For a fee, they read and record scripts for their clients. Lovo allegedly sells a text-to-speech subscription service that allows clients to generate voice-over narrations. The service is described as one that uses “AI-driven software known as ‘Generator’ or ‘Genny,'” which was “created using ‘1000s of voices.'” Genny allegedly creates voice clones, i.e., copies of real people’s voices. Lovo allegedly granted its customers “commercial rights for all content generated,” including “any monetized, business-related uses such as videos, audio books, advertising promotion, web page vlogging, or product integration.” (Lovo terms of service.) The complaint alleges that Lovo hired the plaintiffs to provide voice recordings for “research purposes only,” but that Lovo proceeded to exploit them commercially by licensing their use to Lovo subscribers.

This lawsuit ensued.

The complaint sets out claims for:

  • Copyright infringement
  • Trademark infringement
  • Breach of contract
  • Fraud
  • Conversion
  • Unjust enrichment
  • Unfair competition
  • New York civil rights laws
  • New York consumer protection laws.

The defendant moved to dismiss the complaint for failure to state a claim.

The copyright claims

Sage alleged that Lovo infringed the copyright in one of her voice recordings by reproducing it in presentations and YouTube videos. The court allowed this claim to proceed.

Plaintiffs also claimed that Lovo’s unauthorized use of their voice recordings in training its generative-AI product infringed their copyrights in the sound recordings. The court ruled that the complaint did not contain enough factual detail about how the training process infringed one of the exclusive rights of copyright ownership. Therefore, it dismissed this claim with leave to amend.

The court dismissed the plaintiffs’ claims of output infringement, i.e., claims that the “cloned” voices the AI tool generated infringed copyrights in the original sound recordings.

Copyright protection in a sound recording extends only to the actual recording itself. Fixation of sounds that imitate or simulate the ones captured in the original recording does not infringe the copyright in the sound recording.

This issue often comes up in connection with copyrights in music recordings. If Chuck Berry writes a song called “Johnny B. Goode” and records himself performing it, he will own two copyrights – one in the musical composition and one in the sound recording. If a second person then records himself performing the same song, and he doesn’t have a license (compulsory or otherwise) to do so, that person would be infringing the copyright in the music but not the copyright in the sound recording. This is true even if he is very good at imitating Berry’s voice and guitar work. For a claim of sound recording infringement to succeed, it must be shown that the actual recording itself was copied.

Plaintiffs did not allege that Lovo used Genny to output AI-generated reproductions of their original recordings. Rather, they alleged that Genny is able to create new recordings that mimic attributes of their voices.

The court added that the sound of a voice is not copyrightable expression, and even if it were, the plaintiffs had registered claims of copyright in their recordings, not in their voices.

The trademark claims

In addition to infringement, the Lanham Act creates two other potential bases of trademark liability: (1) false association; and (2) false advertising. 15 U.S.C. sec. 1125(a)(1)(A) and (B). Plaintiffs asserted both kinds of claims. The judge dismissed these claims.

False association

The Second Circuit court of appeals recently held, in Electra v. 59 Murray Enter., Inc. and Souza v. Exotic Island Enters., Inc., that using a person’s likeness to create an endorsement without the person’s permission can constitute a “false association” violation. In other words, a federally-protected, trademark-like interest in one’s image, likeness, personality and identity exists. (See, e.g., Jackson v. Odenat.)

Although acknowledging that this right extends to one’s voice, the judge ruled that the voices in this case did not function as trademarks. They did not identify the source of a product or service. Rather, they were themselves the product or service. For this reason, the judge ruled that the plaintiffs had failed to show that their voices, as such, are protectable trademarks under Section 43(a)(1)(A) of the Lanham Act.

False Advertising

Section 43(a)(1)(B) of the Lanham Act (codified at 15 U.S.C. sec. 1125(a)(1)(B)) prohibits misrepresentations about “the nature, characteristics, qualities, or geographic origin of . . . goods, services, or commercial activities.” The plaintiffs claimed that Lovo marketed their voices under different names (“Kyle Snow” and “Sally Coleman.”) The court determined that this was not fraudulent, however, because Lovo marketed them as what they were, namely, synthetic clones of the actors’ voices, not as their actual voices.

Plaintiffs also claimed that Lovo’s marketing materials falsely stated that the cloned voices “came with all commercial rights.” They asserted that they had not granted those rights to Lovo. The court ruled, however, that even if Lovo was guilty of misrepresentation, it was not the kind of misrepresentation that comes within Section 43(a)(1)(B), as it did not concern the nature, characteristics, qualities, or geographic origin of the voices.

State law claims

Although the court dismissed the copyright and trademark claims, it allowed some state law claims to proceed. Specifically, the court denied the motion to dismiss claims for breach of contract, violations of sections 50 and 51 of the New York Civil Rights Law, and violations of New York consumer protection law.

Both the common law and the New York Civil Rights Law prohibit the commercial use of a living person’s name, likeness or voice without consent. Known as “misappropriation of personality” or violation of publicity or privacy rights, this is emerging as one of the leading issues in AI law.

The court also allowed state law claims of false advertising and deceptive trade practices to proceed. The New York laws are not subject to the “nature, characteristics, qualities, or geographic origin” limitation set out in Section 43(a) of the Lanham Act.

Conclusion

I expect this case will come to be cited for the rule that copyright cannot be claimed in a voice. Copyright law protects only expression, not a person’s corporeal attributes. The lack of copyright protection for a person’s voice, however, does not mean that voice cloning is “legal.” Depending on the particular facts and circumstances, it may violate one or more other laws.

It also should be noted that after the Joe Biden voice-cloning incident of 2024, states have been enacting statutes regulating the creation and distribution of voice clones. Even where a specific statute is not applicable, though, a broader statute (such as the FTC Act or a similar state law) might cover the situation.

Images and references in this blog post are for illustrative purposes only. No endorsement, sponsorship or affiliation with any person, organization, company, brand, product or service is intended, implied, or exists.

Joe Biden portrait
Official portrait of Vice President Joe Biden in his West Wing Office at the White House, Jan. 10, 2013. (Official White House Photo by David Lienemann)

 

Court Rules AI Training is Fair Use

Court rules that using copyrighted works to train AI is fair use. Kadrey et al. v. Meta Platforms.

Just days after the first major fair use ruling in a generative-AI case, a second court has determined that using copyrighted works to train AI is fair use. Kadrey et al. v. Meta Platforms, No. 3:23-cv-03417-VC (N.D. Cal. June 25, 2025).

The Kadrey v. Meta Platforms Lawsuit

I previously wrote about this lawsuit in an article describing the top 12 generative-AI lawsuits.

Meta Platforms owns and operates social media services including Facebook, Instagram, and WhatsApp. It is also the developer of a large language model (LLM) called “Llama.” One of its releases, Meta AI, is an AI chatbot that utilizes Llama.

To train its AI, Meta obtained data from a wide variety of sources. The company initially pursued licensing deals with book publishers. It turned out, though, that in many cases, individual authors owned the copyrights. Unlike music, no organization handles collective licensing of rights in book content. Meta then downloaded shadow library databases. Instead of licensing works in the databases, Meta decided to just go ahead and use them without securing licenses. To download them more quickly, Meta torrented them using BitTorrent.

Meta trained its AI models to prevent them from “memorizing” and outputting text from the training data, with the result that no more than 50 words and punctuation marks from any given work were reproduced in any given output.

The plaintiffs named in the Complaint are thirteen book authors who have published novels, plays, short stories, memoirs, essays, and nonfiction books. Sarah Silverman, author of The Bedwetter; Junot Diaz, author of The Brief Wondrous Life of Oscar Wao; and Andrew Sean Greer, author of Less, are among the authors named as plaintiffs in the lawsuit. The complaint alleges that Meta downloaded 666 copies of their books without permission and states claims for direct copyright infringement, vicarious copyright infringement, removal of copyright management information in violation of the Digital Millennium Copyright Act (DMCA), and various state law claims. All claims except the ones for direct copyright infringement and violation of the DMCA were dismissed in prior proceedings.

Both sides moved for summary judgment on fair use with respect to the claim that Meta’s use of the copyrighted works to train its AI infringed copyrights. Meta moved for summary judgment on the DMCA claims. Neither side moved for summary judgment on a claim that Meta infringed copyrights by distributing their works (via leeching or seeding).

On June 25, 2025 Judge Chhabria granted Meta’s motion for summary judgment on fair use with respect to AI training; reserved the motion for summary judgment on the DMCA claims for decision in a separate order, and held that the claim of infringing distribution via leeching or seeding “will remain a live issue in the case.”

Judge Chhabria’s Fair Use Analysis

Judge Chhabria analyzed each of the four fair use factors. As is the custom, he treated the first (Character or purpose of the use) and fourth (Effect on the market for the work) factors as the most important of the four.

He disposed of the first factor fairly easily, as Judge Alsup did in Bartz v. Anthropic, finding that the use of copyrighted works to train AI is a transformative use. This finding weighs heavily in favor of fair use. The purpose of Meta’s AI tools is not to generate books for people to read. Indeed, in this case, Meta had installed guardrails to prevent the tools from generating duplicates or near-duplicates of the books on which the AI was trained. Moreover, even if it could allow a user to prompt the creation of a book “in the style of” a specified author, there was no evidence that it could produce an identical work or a work that was substantially similar to one on which it had been trained. And writing styles are not copyrightable.

Significantly, the judge held that the use of shadow libraries to obtain unauthorized copies of books does not necessarily destroy a fair use defense. When the ultimate use to be made of a work is transformative, the downloading of books to further that use is also transformative, the judge wrote. This ruling contrasts with other judges who have intimated that using pirated copies of works weighs against, or may even prevent, a finding of fair use.

Unlike some judges, who tend to consider the fair use analysis over and done if transformative use is found, Judge Chhabria recognized that even if the purpose of the use is transformative, its effect on the market for the infringed work still has to be considered.

3 Ways of Proving Adverse Market Effect

The Order lays out three potential kinds of arguments that may be advanced to establish the adverse effect of an infringing use on the market for the work:

  1. The infringing work creates a market substitute for the work;
  2. Use of the work to train AI without permission deprives copyright owners of a market for licenses to use their works in AI training;
  3. Dilution of the market with competing works.

Market Substitution

In this case, direct market substitution could not be established because Meta had installed guardrails that prevented users from generating copies of works that had been used in the training. Its AI tools were incapable of generating copies of the work that could serve as substitutes for the authors’ works.

The Market for AI Licenses

The court refused to recognize the loss of potential profits from licensing the use of a work for AI training purposes as a cognizable harm.

Market Dilution

The argument here would be that the generation of many works that compete in the same market as the original work on which the AI was trained dilutes the market for the original work. Judge Chhabria described this as indirect market substitution.

The copyright owners in this case, however, focused on the first two arguments. They did not present evidence that Meta’a AI tools were capable of generating books; that they do, in fact, generate books; or that the books they generate or are capable of generating compete with books these authors wrote. There was no evidence of diminished sales of their books.

Market harm cannot be assumed when generated copies are not copies that can serve as substitutes for the specific books claimed to have been infringed. When the output is transformative, as it was in this case, market substitution is not self-evident.

Judge Chhabria chided the plaintiffs for making only a “half-hearted argument” of a significant threat of market harm. He wrote that they presented “no meaningful evidence on market dilution at all.”

Consequently, he ruled that the fourth fair use factor favored Meta.

Conclusion

The decision in this case is as significant for what the court didn’t do as it is for what it did. It handed a fair use victory to Meta. At the same time, though, it did not rule out a finding that training AI tools on copyrighted works is not fair use in an appropriate case. The court left open the possibility that a copyright owner might prevail on a claim that training AI on copyrighted works is not fair use in a different case. And it pointed the way, albeit in dictum, namely, by making a strong showing of market dilution.

That claim is not far-fetched. https://www.wired.com/story/scammy-ai-generated-books-flooding-amazon/

AI OK; Piracy Not: Bartz v. Anthropic

Anthropic also acquired infringing copies of works from pirate sites. Judge Alsup ruled that these, and uses made from them, are not fair use.

A federal judge has issued a landmark fair use decision in a generative-AI copyright infringement lawsuit.

In a previous blog post, I wrote about the fair use decision in Thomson Reuters v. ROSS. As I explained there, that case involved a search-and-retrieval AI system, so the holding was not determinative of fair use in the context of generative AI. Now we finally have a decision that addresses fair use in the generative-AI context.

Bartz et al. v. Anthropic PBC

I did not include this case in my list of the top 12 generative-AI lawsuits, but only because it was one among many raising the same basic questions about training AI on copyright-protected works. This issue was well represented by others on the list. As it happens, though, Bartz has now taken on enhanced significance because the judge in the case has issued an important ruling on fair use.

Anthropic is an AI software firm founded by former OpenAI employees. It offers a generative-AI tool called Claude. Like other generative-AI tools, Claude mimics human conversational skills. When a user enters a text prompt, Claude will generate a response that is very much like one a human being might make (except it is sometimes more knowledgeable.) It is able to do this by using large language models (LLMs) that have been trained on millions of books and texts.

Adrea Bartz, Charles Graeber, and Kirk Wallace Johnson are book authors. In August 2024, they sued Anthropic, claiming the company infringed the copyrights in their works. Specifically, they alleged that Anthropic copied their works from pirated and purchased sources, digitized print versions, assembled them into a central library, and used the library to train LLMs, all without permission. Anthropic asserted, among other things, a fair use defense.

Earlier this year, Anthropic filed a motion for summary judgment on the question of fair use.

On June 23, 2025, Judge Alsup issued an Order granting summary judgment in part and denying it in part. It is the first major ruling on fair use in the dozens of generative-AI copyright infringement lawsuits that are currently pending in federal courts.

The Order includes several key rulings.

Books

Digitization

Anthropic acquired both pirated and lawfully purchased printed copies of copyright-protected works and digitized them to create a central e-library. Authors claimed that making digital copies of their works infringed the exclusive right of copyright owners to reproduce their works. (See 17 U.S.C. 106.)

In the process of scanning print books to create digital versions of them, the print copies were destroyed. Book bindings were stripped so that each individual page could be scanned. The print copies were then discarded. The digital copies were not distributed to others. Under these circumstances, the court ruled that making digital versions of print books is fair use.

The court likened format to a frame around a work, as distinguished from the work itself. As such, a digital version is not a new derivative work. Rather, it is a transformative use of an existing work. So long as the digital version is merely a substitute for a print version a person has lawfully acquired, and so long as the print version is destroyed and the digital version is not further copied or distributed to others, then digitizing a printed work is fair use. This is consistent with the first sale doctrine (17 U.S.C. 109(a)), which gives the purchaser of a copy of a work a right to dispose of that particular copy as the purchaser sees fit.

In short, the mere conversion of a lawfully acquired print book to a digital file to save space and enable searchability is transformative, and so long as the print version is destroyed and the digital version is not further copied or distributed, it is fair use.

AI Training Is Transformative Fair Use

The authors did not contend that Claude generated infringing output. Instead, they argued that copies of their works were used as inputs to train the AI. The Copyright Act, however, does not prohibit or restrict the reading or analysis of copyrighted works. So long as a copy is lawfully purchased, the owner of the purchased copy can read it and think about it as often as he or she wishes.

[I]f someone were to read all the modern-day classics because of their exceptional expression, memorize them, and then emulate a blend of their best writing, would that violate the Copyright Act? Of course not.

Order.

Judge Alsup described AI training as “spectacularly” transformative.” Id. After considering all four fair use factors, he concluded that training AI on lawfully acquired copyright-protected works (as distinguished from the initial acquisition of copies) is fair use.

Pirating Is Not Fair Use

In addition to lawfully purchasing copies of some works, Anthropic also acquired infringing copies of works from pirate sites. Judge Alsup ruled that these, and uses made from them, are not fair use. The case will now proceed to trial on the issue of damages resulting from the infringement.

Conclusion

Each of these rulings seems, well, sort of obvious. It is nice to have the explanations laid out so clearly in one place, though.

 

The Copyright Discovery Rule Stands

The Copyright Act imposes a 3-year limitations period for copyright infringement claims. But when does a claim accrue? That is the (potentially) million-dollar question.

Last year, the United States Supreme Court held that as long as a claim is timely filed, damages may be recovered for any loss or injury, including losses incurred more than three years before the claim is filed (Warner Chappell Music. v. Nealy). The Court expressed no opinion about whether the Copyright Act’s three-year limitation period begins to run when the infringing act occurs or when the victim discovers it, leaving that question for another day. “Another day” arrived, but the Court still declined to address it. What, if anything, can be made of that?

Statute of Limitations for Copyright Infringement

The Copyright Act imposes a 3-year limitations period for copyright infringement claims. Specifically:

No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued.

17 U.S.C. 507(b).

But when does a claim accrue? That is the (potentially) million-dollar question.

According to the “incident of injury” rule, an infringement claim accrues when an infringing act occurs. Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U. S. 663, 670 (2014). Under this rule, an infringement victim who did not learn about an infringing act until three years after it occurred would be out luck.

Courts in many circuits, however, apply an alternative rule. Known as the “discovery rule,” it holds that a copyright infringement claim accrues when “the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for the claim.” William A. Graham Co. v. Haughey, 568 F. 3d 425, 433 (CA3 2009) (internal quotation marks omitted). According to Patry on Copyright, this is the majority rule.

If a court applies the discovery rule, then the infringement complaint must be filed within three years after the victim learns or should reasonably have learned of the infringing act, even if that act occurred more than three years earlier.


The Look-Back Period for Damages

As I explained in a previous blog post, the United States Supreme Court did not have the question about the validity of either accrual theory before it in Warner Chappell Music. Accordingly, it did not address the issue. Instead, the Court limited itself to deciding only the specific question before it, namely, whether damages can be claimed for all injuries that occurred before the victim learned (or reasonably should have learned) of an infringing act. The Court held that they can be. And this is true even for losses occurring more than three years before the infringement was discovered. Statutes of limitations only determine when a claim may be filed; they do not limit the look-back period for recovering damages for injury. “The Copyright Act contains no separate time-based limit on monetary recovery.” Warner Chappell Music, supra.

It must be kept in mind that the discovery rule has an important proviso. The clock starts clicking on a claim from the first date a victim actually knew or should have known of an infringement. In many cases, it may become more difficult to convince a judge that the victim’s unawareness of the infringing act was reasonable if a lot of time has gone by since the infringement occurred. Reasonableness, however, depends on all the facts and circumstances, so it has to be decided on a case-by-case basis.

RADesign, Inc. v. Ruthie Davis et al.

Michael Grecco Productions, Inc. sued RADesign, Inc. and others for copyright infringement. The complaint alleged that the defendant’s infringing use of a copyright-protected photograph began on August 16, 2017, and that the plaintiff discovered it on February 8, 2021. The complaint was filed in October, 2021. As a result, the claim would be barred under the “incident of injury” rule because it was filed more than three years after the alleged infringement occurred. The complaint, however, was filed in the Second Circuit, a jurisdiction that recognizes the discovery rule. Therefore, the question became whether the failure to discover the infringement within three years was reasonable. The district court held that it was not. The court described the copyright owner in this case as “sophisticated” in detecting and litigating infringements and therefore not entitled to the benefit of the discovery rule.

The Second Circuit Court of Appeals reversed, declaring, “This ‘sophisticated plaintiff’ rationale has no mooring to our cases.”

The U.S. Supreme Court’s Denial of Certiorari

RADesign, Inc. filed a petition for certiorari to the United States Supreme Court. The sole question presented was “Whether a claim ‘accrue[s]’ under the Copyright Act’s statute of limitations for civil actions, 17 U.S.C. 507(b), when the infringement occurs (the ‘injury rule’) or when a plaintiff discovers or reasonably should have discovered the infringement (the ‘discovery rule’).” The petition argued that the Copyright Act does not explicitly provide for a discovery rule and asserted that the courts of appeal should not have adopted one.

Unlike in Warner Chappell Music, the Court now had the validity of the discovery rule in copyright infringement cases squarely before it. The Court, however, declined the invitation to review that question. On June 16, 2025, it denied certiorari.

What a Denial of Certiorari Means

Really, the only legal effect of a denial of certiorari is that the lower court’s decision stands. In this case, that would mean that the Second Circuit Court of Appeals’ decision remains in effect for that specific case. For the time being, anyway, attorneys can cite the reasoning and holding of the Second Circuit Court of Appeals decision as legal precedent in other cases.

What a Denial of Certiorari Does Not Mean

A denial of certiorari does not mean that the Supreme Court agreed with the Court of Appeals. The Court of Appeal’s decision sets a precedent in the Second Circuit, but the denial of certiorari does not have that effect. It simply means the Supreme Court has decided not to trouble itself with the question at this time.

Caveats

Copyright owners and practitioners should not read too much into this decision. Even if the discovery rule forecloses a finding of untimeliness on the face of a complaint, a defendant may still be able to assert untimeliness as an affirmative defense. Again, the reasonableness of delayed acquisition of knowledge of infringement must be decided on a case-by-case basis. Copyright owners and their attorneys should be vigilant in detecting infringement of protected works and diligent in timely filing claims.

Read more about Warner Chappell Music and other important cases in Top Copyright Cases of 2024. 

 

 

Fair Use Decision in Thomson Reuters v. Ross

A court has handed down the first known ruling (to me, anyway) on “fair use” in the wave of copyright infringement lawsuits against AI companies that are pending in federal courts.

Thomson Reuters v. ROSS is one of the top 12 generative-AI lawsuits that are pending in the courts. A court has handed down the first known ruling (to me, anyway) on “fair use” in the wave of copyright infringement lawsuits against AI companies that are pending in federal courts. The ruling came in Thomas Reuters v. ROSS. Thomas Reuters filed this lawsuit against Ross Intelligence back in 2020, alleging that Ross trained its AI models on Westlaw headnotes to build a competing legal research tool, infringing numerous copyrights in the process. Ross asserted a fair use defense.

In 2023, Thomson Reuters sought summary judgment against Ross on the fair use defense. At that time, Judge Bibas denied the motion. This week, however, the judge reversed himself, knocking out at least a major portion of the fair use defense.

Ross had argued that Westlaw headnotes are not sufficiently original to warrant copyright protection and that even if they are, the use made of them was “fair use.” After painstakingly reviewing the headnotes and comparing them with the database materials, he concluded that 2,243 headnotes were sufficiently original to receive copyright protection, that Ross infringed them, and that “fair use” was not a defense in this instance because the purpose of the use was commercial and it competed in the same market with Westlaw. Because of that, it was likely to have an adverse impact on the market for Westlaw.

While this might seem to spell the end for AI companies in the many other lawsuits where they are relying on a “fair use” defense, that is not necessarily so. As Judge Bibas noted, the Ross AI was non-generative. Generative AI tools may be distinguishable in the fair use analysis.

I will be presenting a program on Recent Developments in AI Law in New Jersey this summer. This one certainly will merit mention. Whether any more major developments will come to pass between now and then remains to be seen.

New AI Copyright Infringement Lawsuit

Another copyright and trademark infringement lawsuit against an AI company was filed this week. This one pits news article publishers Advance Local Media, Condé Nast, The Atlantic, Forbes Media, The Guardian, Business Insider, LA Times, McClatchy Media Company, Newsday, Plain Dealer Publishing Company, POLITICO, The Republican Company, Toronto Star Newspapers, and Vox Media against AI company Cohere.

The complaint alleges that Cohere made unauthorized use of publisher content in developing and operating its generative AI systems, infringing numerous copyrights and trademarks. The plaintiffs are seeking an injunction and monetary damages.

Read more copyright and AI training stories.