Is AI Art Piracy? Your Favorite Media Giants Say Yes
It's pretty clear that, when someone owns a copyright, they want to prevent their works from being copied. This includes any derivative works that aren't being made for a fair use purpose. Yet, how does this look when we add generative AI to the mix?
Our laws don't have an answer for us yet.
Nonetheless, courts have, and are in the middle of, responding to this controversy. The Times has reported that media conglomerates Disney and Universal Studios have filed a joint lawsuit against Midjourney, an AI image generation tool. Founded in 2021, the platform raked in $100 million in revenue last year through its subscription model. It relies on a massive dataset of media that isn't available for public scrutiny, making it questionable whether any data was sourced with the approval of the original copyright holders. It's this fear that has led many independent artists to "poison" their images with the hopes of tricking these generation tools into producing incoherent nonsense.
A couple of recent cases shed some light as to what the verdict is for AI image generators. Let's examine them and other sources to close the case on whether these tools are law-abiding or law-evading.
U.S. Copyright Office Decisions
The Copyright Act of 1976 provides protections to "original works of authorship." Although it doesn't specify a human author, courts have neglected to recognize a non-human author. After all, how's a machine going to enforce its own copyright?
This was further affirmed in Thaler v. Perlmutter (2023), where Thaler attempted to copyright an autonomously-generated art piece with the U.S. Copyright Office (USCO). The court upheld USCO's decision to deny the application, noting that a minimal amount of human involvement would be enough to submit a viable application.
Since then, USCO has laid out numerous guidelines for applicants attempting to copyright AI art. Their Copyright Registration Guidance specifically notes that the copyrightability of any work depends on the amount of human involvement. If the AI came up with the image, it's a no-go. However, if the person includes some AI content within a human-arranged piece, or manually synthesizes multiple generations into a unique work, then that may satisfy USCO's guidelines. In addition, a disclaimer announcing that parts of the work has been generated with AI is needed.
And before you ask, no, the prompts you feed ChatGPT do not count as "human-arranged." This was cleared in the January 2025 issue of the Copyright and Artificial Intelligence Report. AI is not the brush for a person's canvas, but rather the artist commissioned to create the piece.
Recent Court Rulings
Fair use doctrine relies on four key factors according to 17 U.S.C § 107:
- Purpose for use (commercial, non-profit, etc.),
- The nature of the copyrighted work,
- The amount of copyrighted material used, and
- How its use could potentially affect the market.
Generative AI has yet to satisfy all four factors in a court of law. Though, it doesn't have to. Instead, these factors are considerations in determining fair use that may count for or against a defendant.
This past June, the U.S. District Court for the Northern District of California found in Bartz v. Anthropic PBC that three of the four factors apply to the training of the defendant's AI system, Claude. It's inherently transformative (synthesizing information), does not output information that de-values the original works, and its reliance on using entire books doesn't seem to be unreasonable considering its purpose is to train a large language model without violating privacy concerns. When it comes to the nature of the works chosen, they were specifically sorted by their "expressive elements," which may defeat fair use since these elements may be re-used by the same AI. In short, AI can meet fair use standards with a few tweaks - though, in this case, the bigger concern was their piracy of books to maintain a central library. Stealing isn't fair use.
Or maybe it is? Kadrey v. Meta Platforms, Inc. found that Meta can train their AI platform based on "shadow libraries," of which are unilaterally considered piracy. In this case, the judge noted that factor four, market harm, is the most important factor at stake when determining fair use for generative AI. The judge, who wasn't involved in the Bartz case, didn't care as much about the fair use of the piracy itself, but the fair use of the downloaded content.
Expectedly, this complicates things. The fair use doctrine is mainly used by defendants in response to a complaint by a plaintiff. Whether its applicable or not is entirely up to the court.
Going Forward
Disney and Universal Studios will have to prove that Midjourney is impacting their profits through their generative AI.
Where they get their content may not matter as much if the market impact is negligible. If a designer from Topeka, Kansas wants to put AI Mickey on their homepage, would it really hit Disney's pockets? To Midjourney's credit, perhaps the suit should instead be targeted against those who use the tool to try to cause market disruption.
Let's not construe this as a win for AI. Breaking the bank of these two media giants is a tall order, but generative AI's impact on smaller artists is undoubtedly apparent. A Stanford article analyzed the effects of AI on digital marketplaces for images and found that, upon the introduction of AI, 78% more images arrived each month compared to marketplaces without AI. For the consumer that doesn't care about whether it's machine or human-made, that's great for them. For the producer that refuses to turn to generative AI, they have to jump ship or risk being crowded out by machines.
Some may argue the person who makes the art is irrelevant; art is always art and should be valued. Whether or not I agree, that shouldn't mean artists should give up their craft to programming.
In the music industry, artists are sometimes advised to sell before they stream. After all, there's no guarantee any streaming service will pay you what you deserve. That advice is applicable to all other forms of media. Sell to your fans first before you post publicly. If you feel AI is negatively affecting your sales, keep a careful record of your profits and conduct research on AI usage in your marketplace of choice. A fair use defense will put the burden back onto the plaintiff to prove that a defendant's use is not fair. However, I'm not qualified to provide legal advice, so as always, consult a legal professional.
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