Friday’s Endnotes – 08/08/25

By , August 08, 2025.

Top Ten Noteworthy Copyright Stories from July 2025 — “After being dormant for much of the year, Congress was very busy on copyright issues in July—introducing copyright-related legislation and holding a hearing on AI and copyright piracy issues. There were many more significant copyright-related events in July. Here is a quick snapshot of top ten copyright news stories from July 2025.”

Key Trends in Shanghai’s Top 10 Copyright Cases for 2025 and Beyond — “Shanghai’s copyright landscape saw key developments over the last year, as the city’s Copyright Bureau unveiled its annual list of 10 high-impact copyright cases in July 2025. The cases cover civil, criminal, and administrative decisions, involving various fields such as software, games, films, music, and literature.”

Court in Spain puts a stop to unlicensed press summaries for copyright infringement — “A Barcelona court has taken a firm stand against the unauthorised use of press content, ruling that media summaries sold without a licence violate copyright law and undermine the sustainability of journalism.”

Authors oppose AI text mining proposal over copyright concerns — “The Australian Society of Authors has voiced opposition to a proposal from the Productivity Commission that suggests introducing a text and data mining exception to Australia’s Copyright Act. The interim report from the Productivity Commission, titled Harnessing data and digital technology, considers whether an exception allowing the training of artificial intelligence models on copyrighted works should be explored further in Australia. The report notes that large AI models have already made use of content from Australian creators without their consent or compensation, yet it suggests that the introduction of a text and data mining exception could be a potential way forward.”

Canadian Author Sues Four AI Companies for Copyright Infringement — “[J. B.] MacKinnon, author of The 100-Mile Diet and The Once and Future World, serves as the representative plaintiff in separate suits he filed in B.C. Supreme Court against Nvidia, Meta, Anthropic, and Databricks Inc. The cases target what MacKinnon described as unauthorized use of copyrighted material in developing large language models.”

Friday’s Endnotes – 07/25/25

By , July 25, 2025.

Why Courts Should Dismiss Challenges to Copyright Registrations Issued in the Interregnum — Former U.S. Copyright Office General Counsel Jon Baumgarten argues that trial courts should dismiss or decline to hear challenges to copyright registrations issued since May 22, when competing claims as to who is the Register of Copyrights arose, under the authority of the Supreme Court’s 2010 decision in Reed Elsevier v Muchnick.

Ottawa weighs plans on AI, copyright as OpenAI fights Ontario court jurisdiction — “Canada’s artificial intelligence minister is keeping a close watch on court cases in Canada and the U.S. to determine next steps for Ottawa’s regulatory approach to AI. Some AI companies have claimed early wins south of the border, and OpenAI is now fighting the jurisdiction of an Ontario court to hear a lawsuit by news publishers.”

Transformative Use Analysis in Bartz v. Anthropic AI Case Marred by Fatal Flaws — “The court in Bartz v. Anthropic arrived at the conclusion that the unauthorized use of the plaintiffs’ works for training a generative AI model qualifies as fair use, but the order’s analyses of transformative use has many fatal flaws. The disregard for Ninth Circuit precedent and misapplication of the Supreme Court’s Warhol decision is nothing short of alarming, so much so that it’s hard to see how this decision will not be corrected on appeal.”

Trump Loses Copyright Fight Over Woodward Interview Recordings — “Trump’s primary theory—that he and Woodward were joint authors of the interviews—collided with both Second Circuit precedent and his own pleadings. Under Childress v. Taylor and Thomson v. Larson, joint authorship requires both independently copyrightable contributions and mutual intent to be co-authors at the time of creation.”

New York Court Tackles the Legality of AI Voice Cloning — “The court dismissed plaintiffs’ infringement claim with respect to the use of the plaintiffs’ voice recordings to train Lovo’s AI model, but with leave to amend. The court held that there was insufficient factual detail in the complaint regarding how the AI training process allegedly infringed the plaintiffs’ exclusive rights, but that it would be straightforward for plaintiffs to amend their complaint to make the appropriate allegations. In a footnote, the court noted that Lovo asserted in a single sentence that its training was fair use, but that if plaintiffs amended their complaint, and defendants again moved to dismiss, a more thorough fair-use defense would need to be articulated.”

Friday’s Endnotes – 07/18/25

By , July 18, 2025.

The Largest IP Theft in History: Takeaways from the Senate Hearing on AI and Copyright Piracy — “On July 16, the Senate Judiciary Committee’s Subcommittee on Crime and Counterterrorism held a hearing titled Too Big to Prosecute?: Examining the AI Industry’s Mass Ingestion of Copyrighted Works for AI Training. While some courts may struggle to articulate why these pervasive pirating activities of AI companies seem so disturbing—Senators on the Subcommittee took charge in demonstrating the ridiculous, un-American position that what they referred to as “the largest IP theft in history” should ever be condoned.”

US authors suing Anthropic can band together in copyright class action, judge rules — “U.S. District Judge William Alsup said the authors can bring a class action, opens new tab on behalf of all U.S. writers whose works Anthropic allegedly downloaded from ‘pirate libraries’ LibGen and PiLiMi to create a repository of millions of books in 2021 and 2022. Alsup said Anthropic may have illegally downloaded as many as 7 million books from the pirate websites, which could make it liable for billions of dollars in damages if the authors’ case is successful.”

Generative AI & Copyright Law in India: Who Owns Machine-Made Works? — “Although courts in India have not yet ruled definitively on generative AI and copyright ownership, recent judicial and regulatory developments signal growing concern and attention toward the issue.”

Can GenAI and Copyright Coexist? — “Gen AI has the potential to benefit industry and society in many ways. But achieving that potential will require more robust and transparent partnerships between technology firms and the creative industries. On our current path we risk killing the goose—or in this case the authors, musicians, coders, and filmmakers—who laid the golden eggs that are key to the present and future value of gen AI output.”

WeTransfer Changes Policy After Concern It Could Train AI on User’s Photos — “The controversy began after a recent update to WeTransfer’s terms appeared to grant the company broad rights over user content, including a clause referencing the use of data to ‘improve performance of machine learning models that enhance our content moderation process.’ This language raised alarms creative professionals, including photographers, some of whom interpreted the terms as giving WeTransfer permission to use, sell, or share their files with AI companies.”

Friday’s Endnotes 07/11/25

By , July 11, 2025.

Top Noteworthy Copyright Stories from June 2025 — June was a busy month for copyright. The Copyright Alliance’s Rachel Kim reviews some of the key developments that took place.

UMG Chief Digital Officer on AI Music: ‘If You Don’t Claim a Seat at the Dinner Table, You Might Wind Up on the Menu’ — “Also during his talk, Nash stressed the position that ‘copyright is not the enemy of innovation’ and that ‘market-based solutions are the answer’ to the challenges AI poses to intellectual property-based industries like music.”

EU’s AI code of practice for companies to focus on copyright, safety — “The code is part of the AI rule book, which will come into effect in a staggered manner and will apply to Google owner Alphabet, Facebook owner Meta, OpenAI, Anthropic, Mistral and other companies. Signatories to the code will have to draw up and make publicly available summaries about the content used to train their general-purpose AI models, only employ copyright-protected content when using web crawlers as well as mitigate the risk of copyright-infringing output.”

Pirate IPTV Trio Sentenced to 14 Years Prison For Money Laundering — “A court in Brazil has handed down prison sentences totaling 14 years to three individuals for money laundering offenses linked to a pirate IPTV service. A software developer who made the service available through a popular IPTV app, his sister, and a mutual friend handled thousands of transactions through bank accounts, with funds laundered through a small hosting company.”

Use of Floorplans in Real Estate Listings is Permissible Under U.S. Copyright Law — “Initially, the district court ruled that the floorplan drawings fell within an exception of the Copyright Act that exempts pictures, paintings, photographs or other pictorial representations of an architectural work if it is visible from a public place. The appeals court rejected that theory and remanded the case for further development, observing that a fair use defense might apply. The case found its way back to the Eighth Circuit after the district court granted summary judgment on the basis of the defendants’ fair use.”

Bartz, Kadrey, and the Market for AI Training

By , July 10, 2025.

The first two court decisions (Bartz v. Anthropic and Kadrey v. Meta) addressing the use of copyrighted works to train generative AI were released in late June in rapid fire succession. Both came from judges within the same federal district, and both ruled, based on the records before them, that the use was fair. But despite the same outcomes, there were significant differences in how they got there.

Given the fact that these decisions may eventually be appealed, and the many lawsuits pending in multiple other US jurisdictions, this is far from the final word on this issue, and I suspect it will be a while before any judicial consensus begins to emerge.

But it is worth noting there are at least two points on which both district courts agree: (1) that the use of copyrighted works to train an AI models is “transformative”, and (2) courts should ignore harm to the market for licensing works under the fourth fair use factor. I previously wrote about why I think the courts are wrong on the first point, and today I want to write about why I think they are wrong on the second point.

Defining market harm

The fourth fair use factor, “undoubtedly the single most important element of fair use,”1Harper & Row, Publrs. v. Nation Enters., 471 U.S. 539, 566 (1985); see also Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 574 (1994) (quoting Harper & Row); Google LLC v. Oracle Am., Inc., 593 U.S. 1, 50 n.5 (2021) (Thomas, J., dissenting) (same). directs courts to consider “the effect of the use upon the potential market for or value of the copyrighted work.”217 U.S.C. § 107. It involves looking at both harm to the original (i.e., does the new work serve as a substitute for the original work) and harm to the market for derivative works.3471 U.S. at 568. This is not a damages analysis in the sense of focusing only on a measurement of already occurred harm.4Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 451 (1984) (“Actual present harm need not be shown; such a requirement would leave the copyright holder with no defense against predictable damage.”). It is instead meant to focus prospectively, and look at not just the harm from the “particular actions of the alleged infringer,” but also the harm if the conduct would become widespread.5471 U.S. at 568 (“to negate fair use one need only show that if the challenged use ‘should become widespread, it would adversely affect the potential market for the copyrighted work.'”).

The plaintiffs in Bartz and Kadrey both advanced multiple forms of market harm caused by defendants resulting from their copying of works to train their AI models. Both provided evidence of a market for licensing copyrighted works for AI training.6Decl. of James Malackowski at 15-26, Bartz v. Anthropic, No. 3:24-cv-05417-WHA (N.D. Cali. April 25, 2025), ECF No. 156; Pl.’s Reply to Mot. for Partial Summ. J. and Opp’n to Meta’s Mot. for Partial Summ. J. at 26-30, Kadrey v. Meta, No. 3:23-cv-03417-VC (N.D. Cali. April 7, 2025), ECF No. 517. But in both cases, the courts dismissed this evidence as legally irrelevant, a conclusion that was a shock to many, especially given that this market is estimated to be worth $2.5 billion today and expected to grow to $30 billion within the decade.

Bartz provided little explanation for its conclusion, saying only,

A market [for licensing copyrighted works for training] could develop. Even so, such a market for that use is not one the Copyright Act entitles Authors to exploit. None of the cases cited by Authors requires a different result. All contemplated losses of something the Copyright Act properly protected — not the kinds of fair uses for which a copyright owner cannot rightly expect to control. 

Kadrey offered somewhat more explanation, saying,

But whether such a market [for licensing works to train AI] exists or is likely to develop is irrelevant, because this market is not one that the plaintiffs are legally entitled to monopolize. In every fair use case, the “plaintiff suffers a loss of a potential market if that potential [market] is defined as the theoretical market for licensing” the use at issue in the case. Therefore, to prevent the fourth factor analysis from becoming circular and favoring the rightsholder in every case, harm from the loss of fees paid to license a work for a transformative purpose is not cognizable.

In short, both courts decided copyright owners are not entitled to the market for licensing their works to AI developers for training, and thus courts should not consider that market when engaging in a fair use analysis.

No doubt, lawyers in these and other AI cases will argue that both courts seriously misread the case law. For example, it is notable that neither judge cites to Campbell v. Acuff-Rose, the one Supreme Court decision that spoke directly to what markets a copyright owner is entitled to under the fourth fair use factor, and how it seems unreasonable to twist Campbell’s reluctance to infer harm to a potential licensing market that copyright owners are unlikely to develop into a rule that courts should ignore an actual licensing market that copyright owners are actively engaged in.7510 U.S. 569, 592 (1994). They may also point out that both courts have engaged in the type of categorical, bright-line rules that are disfavored in fair use. They have impermissibly collapsed the fair use analysis into a single inquiry of transformativeness, only a few years after Warhol warned otherwise.8Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508, 550 (2023) (“The Court has cautioned that the four statutory fair use factors may not ‘be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright.'”). There are likely additional legal arguments that would persuade an appellate court to reverse these holdings.

When markets advance the goals of copyright

But it is also worth looking at this issue through the lens of whether recognition of a market under the fourth factor would advance the goals of copyright. That is, after all, the basic premise of copyright.9471 U.S. at 558 (“By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas”); Eldred v. Ashcroft, 537 U.S. 186, 212 n.18 (2003) (“The economic philosophy behind the Copyright Clause is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors. Accordingly, copyright law celebrates the profit motive, recognizing that the incentive to profit from the exploitation of copyrights will redound to the public benefit by resulting in the proliferation of knowledge. The profit motive is the engine that ensures the progress of science (cleaned up).”). Each of the four fair use factors must be considered independently in light of this goal. If licensing would serve the purpose of copyright better than unpermissioned and uncompensated use, shouldn’t that weigh against fair use?

It’s long been observed that a licensing market for criticism and parody would do little to promote the goals of copyright.10See, e.g., Wendy Gordon, Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and its Predecessors, 82 Colum. L. Rev. 1600, 1632-1634 (1982). Recognizing such a market might, for example, distort how critical uses are produced, which in turn would distort discourse in socially undesirable ways.

By contrast, a licensing market for AI training would promote the goals of copyright in at least four ways:

First, licensing creates incentives for high-quality data. A lot of work is needed to curate training datasets for specific purposes, clean and prepare the data to optimize model performance, and translate it into training-ready formats. With a market for licensing training datasets, publishers and other copyright owners will be motivated to make their own catalogs of works more attractive to AI developers. Third party aggregators and platforms will also be incentivized to curate and provide high-quality datasets with a competitive marketplace. In the absence of a market, only the largest companies will have the time and money to do this work, and they will be disincentivized from sharing datasets to prevent competitors from free-riding off their investments, inhibiting the broadest dissemination of copyrighted works for training.

Second, licensing reinforces public access. If scraping publicly available content is allowed without compensation, publishers are given a clear incentive to move their works behind paywalls, authentication barriers, or technical protections. Ironically, in the name of free access for AI, fair use may end up reducing access for humans. But if publishers know that public access does not mean uncompensated use, they are more likely to keep their content openly available, confident that doing so will not render it a free resource for commercial appropriation.

Third, licensing is pro-competitive. It lowers barriers to entry and broadens access to high-quality datasets, which means more AI companies can compete, leading to increased innovation, product variety, and lower costs. Licensing enables specialization, allowing licensors to deepen their expertise and rewarding them in the market for increasing efficiencies in creating and providing training datasets. Contrary to claims that licensing would favor big companies over small, it is the world that ignores copyright that is a winner takes all world, where the competitive edge goes only to the largest companies that can devote the most resources to collecting and building training datasets.

Fourth, licensing creates certainty. “Because copyright law ultimately serves the purpose of enriching the general public through access to creative works,” says the Supreme Court, “it is peculiarly important that the boundaries of copyright law be demarcated as clearly as possible.”11Fogerty v. Fantasy, Inc., 510 U.S. 517, 527 (1994). The use of copyrighted works by AI developers is complex, far more complex than uses like criticism or parody,12Though even a parodic work “may have a more complex character,” as the Supreme Court noted in Campbell, “with effects not only in the arena of criticism but also in protectible markets for derivative works, too.” 510 U.S. at 592. with multiple potential uses on the ingestion side and potential reproductions occurring on the output side. Even if courts begin to find that the actual training with copyrighted works is fair use, that still leaves substantial legal uncertainty around different factual scenarios, ancillary uses of works, and downstream uses.

The decision in Bartz is proof positive of this. Although the court held that the copies of works used to train Anthropic’s LLM were justified under fair use, it concluded that the downloading of pirate copies was not fair use, and any internal copying that was not part of the training process may still be infringing. Licensing can prospectively address these issues with far greater certainty and allow parties to allocate risks more efficiently, leading to increased investment and innovation.

Perhaps most importantly when it comes to the constitutional goals of copyright: licensing rewards authors and publishers.13Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 204 (2016) (“copyright law ultimately serves the purpose of enriching the general public through access to creative works. The statute achieves that end by striking a balance between two subsidiary aims: encouraging and rewarding authors’ creations while also enabling others to build on that work.”) (citing Fogerty, 510 U. S., at 526). Creators of books, journalism, photography, and other expressive works are essential to the cultural and informational commons. Licensing allows them to share in the commercial success of AI, providing income streams that support continued creation. The public continues to benefit from their creative work, and the next generation of AI benefits from a renewable source of high-quality training materials.

Conclusion

Both Bartz and Kadrey have created a bright-line rule that transformativeness equals fair use. A categorical rule that excludes consideration of harm to markets for uses that a court determines are transformative effectively collapses the four factor analysis into a single inquiry. If this rule stands, it would put fair use at odds with the goals of copyright, and turn it into a doctrine that exists for the private benefit of the largest commercial actors in the world at the expense of the public good.

References

References
↑1 Harper & Row, Publrs. v. Nation Enters., 471 U.S. 539, 566 (1985); see also Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 574 (1994) (quoting Harper & Row); Google LLC v. Oracle Am., Inc., 593 U.S. 1, 50 n.5 (2021) (Thomas, J., dissenting) (same).
↑2 17 U.S.C. § 107.
↑3 471 U.S. at 568.
↑4 Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 451 (1984) (“Actual present harm need not be shown; such a requirement would leave the copyright holder with no defense against predictable damage.”).
↑5 471 U.S. at 568 (“to negate fair use one need only show that if the challenged use ‘should become widespread, it would adversely affect the potential market for the copyrighted work.'”).
↑6 Decl. of James Malackowski at 15-26, Bartz v. Anthropic, No. 3:24-cv-05417-WHA (N.D. Cali. April 25, 2025), ECF No. 156; Pl.’s Reply to Mot. for Partial Summ. J. and Opp’n to Meta’s Mot. for Partial Summ. J. at 26-30, Kadrey v. Meta, No. 3:23-cv-03417-VC (N.D. Cali. April 7, 2025), ECF No. 517.
↑7 510 U.S. 569, 592 (1994).
↑8 Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508, 550 (2023) (“The Court has cautioned that the four statutory fair use factors may not ‘be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright.'”).
↑9 471 U.S. at 558 (“By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas”); Eldred v. Ashcroft, 537 U.S. 186, 212 n.18 (2003) (“The economic philosophy behind the Copyright Clause is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors. Accordingly, copyright law celebrates the profit motive, recognizing that the incentive to profit from the exploitation of copyrights will redound to the public benefit by resulting in the proliferation of knowledge. The profit motive is the engine that ensures the progress of science (cleaned up).”).
↑10 See, e.g., Wendy Gordon, Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and its Predecessors, 82 Colum. L. Rev. 1600, 1632-1634 (1982).
↑11 Fogerty v. Fantasy, Inc., 510 U.S. 517, 527 (1994).
↑12 Though even a parodic work “may have a more complex character,” as the Supreme Court noted in Campbell, “with effects not only in the arena of criticism but also in protectible markets for derivative works, too.” 510 U.S. at 592.
↑13 Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 204 (2016) (“copyright law ultimately serves the purpose of enriching the general public through access to creative works. The statute achieves that end by striking a balance between two subsidiary aims: encouraging and rewarding authors’ creations while also enabling others to build on that work.”) (citing Fogerty, 510 U. S., at 526).

Friday’s Endnotes – 06/27/25

By , June 27, 2025.

Fair Use Decision Fumbles Training Analysis but Sends Clear Piracy Message — “First analyzing Anthropic’s use of copyrighted works to train its Claude large language model (LLM), Judge William Alsup immediately falls into a fair use trap that the Supreme Court warned against in its seminal 2023 Warhol v. Goldsmith decision, letting his foregone conclusion about the transformative nature of the use control the rest of the fair use analysis.”

U.S. Copyright Office Replaces Online Public Catalog with Copyright Public Records System — “Today, the U.S. Copyright Office is pleased to announce that the Copyright Public Records System (CPRS) has replaced its Online Public Catalog. CPRS provides copyright registration and recordation data with advanced search capabilities, filters, and improved interfaces for public users and Office staff. … CPRS includes both recordation and registration information from 1978 to the present and searchable metadata for over 3.8 million registration applications from 1898 to 1945.”

Unlocking Creativity: The Socioeconomic Benefits of Copyright — “In a world increasingly driven by ideas, innovation, and digital transformation, copyright stands as a cornerstone of economic vitality and cultural expression. This report is a comprehensive literature review that explores the powerful role copyright plays in fueling creativity, supporting high-quality jobs, and driving global competitiveness through creative sectors.”

Getty Images Drops Main Copyright Claims Against Stability AI in UK Legal Case — “The withdrawn claims centered on Getty’s assertion that Stability trained Stable Diffusion using millions of copyrighted images without authorization, including some that contained Getty’s distinct watermark. However, legal experts say the company likely struggled to establish that any alleged infringement occurred under U.K. jurisdiction.”

Denmark to tackle deepfakes by giving people copyright to their own features — “The Danish government said on Thursday it would strengthen protection against digital imitations of people’s identities with what it believes to be the first law of its kind in Europe.”

Not That Kind of Transformation: AI, Fair Use, and Relating Back

By , June 25, 2025.

In Bartz v. Anthropic, Judge Alsup found the use of copyrighted works to train a large language model to be “justified as a fair use”, describing the technology as “among the most transformative many of us will see in our lifetimes.”

Generative AI may certainly turn out to be remarkably transformative in the ordinary sense of the word. But, contrary to the legal conclusion reached by Judge Alsup, I argue that the use of copyrighted works for training doesn’t constitute “transformative” use in the context of copyright law.

In this context, a use is not transformative merely because it produces something new or technologically sophisticated. Rather, as established through decades of judicial interpretation, a transformative use is one that relates back to the original work by creating new information and insights about that work. Generative AI does not do this. It instead reappropriates the expressive content of the work to enable the generation of synthetic expressive content completely divorced from the original work.

This is not a criticism of the technology itself. Generative AI may well be impressive, even revolutionary. But in its recent recalibration of transformativeness, the Supreme Court was clear that not every innovative or creative secondary use should be considered transformative.1Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508, 543 n.18 (2023) (“The [Google] Court did not hold that any secondary use that is innovative, in some sense, or that a judge or Justice considers to be creative progress consistent with the constitutional objective of copyright, is thereby transformative.”).

Justification

The 2023 Warhol Foundation v. Goldsmith decision marked the first time in nearly 30 years that the Supreme Court directly addressed transformativeness, and the period in between saw a steady expansion of the doctrine, which some worried went too far.2Kienitz v. Sconnie Nation LLC, 766 F.3d 756, 758 (7th Cir. 2014) (“We’re skeptical of Cariou‘s approach, because asking exclusively whether something is ‘transformative’ not only replaces the list in §107 but also could override 17 U.S.C. §106(2), which protects derivative works.”; TCA TV Corp. v. McCollum, 839 F.3d 168, 181 (2d Cir. 2016) (“Insofar as Cariou might be thought to represent the high-water mark of our court’s recognition of transformative works, it has drawn some criticism… We need not defend Cariou here.”).

Warhol regained control of the doctrine, trimmed it of its excesses and refocused it. The Court warned against looking at merely whether something new is created—“Most copying has some further purpose… Many secondary works add something new.”3598 U.S. at 528. The key, Warhol reminds, is to look at the justification for the use. This involves two senses of the word. First, a use is justified if it is the type of use that furthers the purpose of copyright without prejudicing the original author. And second, the use is justified if the user needs the original work to serve this purpose.

Justification in the first sense looks toward the purpose of copyright itself, which is “the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in ‘Science and useful Arts.’”4Mazer v. Stein, 347 U.S. 201, 219 (1954). Exclusive rights allow creators to control and monetize their works. Markets built around those rights reflect diverse preferences—economic, aesthetic, educational, scientific—and empower authors and publishers to pursue their own goals.

Fair use is an exception to these exclusive rights, but it is an exception intended to serve the same purpose as copyright overall. Courts must therefore exercise care when departing from the general rule of exclusive rights, since “underprotection of copyright disserves the goals of copyright just as much as overprotection.”5Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 599 (1994) (J. Kennedy, concurring).

Relating Back

The hallmark of justification, and thus transformativeness, is that the new use “relates back” to the original. The public benefit is two-fold for such uses: the public benefits from the new use itself, and it benefits from the insights about the original work that are created.

This relation-back principle is reflected in the statute, which identifies illustrative purposes—“criticism, comment, news reporting, teaching…, scholarship, or research” all or which involve new uses that provide new information or insights about the original work or treat them as referential objects in the context of further discussion.617 U.S.C. § 107.

The principle is also at the core of Campbell’s parody/satire distinction, which drew the line between a work that “at least in part, comments on” the original work being parodied (parody) and a work where “the commentary has no critical bearing on the substance or style of the original composition” and the original work is used merely “to get attention or to avoid the drudgery in working up something fresh” (satire).7510 U.S. at 580.

And the legislative history recalls this relating-back characteristic. In the Copyright Office’s preliminary study on fair use that kicked off the drafting effort for the 1976 Copyright Act, Alan Latman wrote,

The modus operandi of certain fields requires that the rights of each author yield to a step-by-step progress. This consideration is often linked to the constitutional support for fair use as an indispensable tool in the promotion of “science.” Practical necessity and constitutional desirability are strongest in the area of scholarly works.

Similarly, in reviews of a work, a certain amount of reconstruction is often necessary; and in burlesque, the user must be permitted to accomplish the “recalling or conjuring up of the original.”

As a corollary, this relating-back purpose would be stymied without the ability to use the original work; because the new use is tied to the original work, there are no substitutes for the original work. Thus, we see courts reject transformativeness when the original work is used as a mere commodity or is fungible to the ultimate purpose.8839 F.3d at 182 (“The ‘dramatic’ purpose served by the Routine in the Play appears to be as a ‘McGuffin,’ that is, as a theatrical device that sets up the plot, but is of little or no significance in itself. To advance the plot of the Play, specifically, to have the puppet Tyrone take on a persona distinct from that of Jason, defendants needed Jason to lie about something and for Tyrone to call him on it. But the particular subject of the lie—the Routine—appears irrelevant to that purpose.”); Monge v. Maya Magazines, Inc., 688 F.3d 1164, 1175 (9th Cir. 2012) (“the controversy here has little to do with photos; instead, the photos here depict the couple’s clandestine wedding. The photos were not even necessary to prove that controverted fact—the marriage certificate, which is a matter of public record, may have sufficed to inform the public that the couple kept their marriage a secret for two years.”).

The principle holds true even when looking at technological uses. For example, like criticism and commentary, technological tools that create new information about existing works, like book and image search tools, have been found transformative.9Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015) (book search); Authors Guild, Inc. v. HathiTrust, 755 F.3d 87 (2d Cir. 2014) (book search); Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) (image search); Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003) (image search). Second, as with news reporting and biographical uses, technological tools that analyze specific works, like a plagiarism detector, treat the works as discrete referential objects to provide increased understanding of those specific works.10A.V. v. iParadigms, 562 F.3d 630 (4th Cir. 2009). In each of these cases, the technological use relates back to the original work that was copied.

Training Does Not Relate Back

That is not true in the case of training a generative AI model.

Training a large language model itself starts by breaking down huge amounts of text into smaller parts, and converting those parts into numbers for processing. These numbers (called tokens) are arranged in a mathematical space that captures how often tokens appear together and their contextual relationships. In other words, the unique choices each writer makes, the specific words they select and how they arrange them, are compiled into a single mathematical representation that encodes patterns of usage and co-occurrence.

The model then uses this representation to create a function optimized to predict the most likely next token in a sequence. It does not understand or think like a person but generates what appears as coherent and relevant text by operating on statistical patterns it has derived from the training materials.

This is not transformative in the legal sense.

Crucially, the training process does not comment on or critique the training materials. It does not relate back to them in any meaningful or referential way. What is taken is a part of, not information about, the original authors’ creative expression.11Accord Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc., 342 F.3d 191, 198 n.5 (3d Cir. 2003) (“We note that the clip previews do not constitute mere ‘information’ about the movies, as would, for example, a list of the names of the actors starring in a film, or a statement of the rating it received… Regardless, the clips are part of — not information about — Disney’s expressive creations.”). The original expressive choices are extracted and embedded into the model’s internal representation, not to analyze them, but to reproduce similarly structured expression.

Indeed, in many cases, the process does not even identify which training materials were most influential in producing a given output. The process is opaque by design. In that sense, the AI model is the opposite of a referential or critical use. It is a black box whose output conceals rather than illuminates its sources.

Because there is no relating back, then the use of a particular work is also not justified in the narrow sense of the term. The individual works used in training are entirely fungible, and developers have a universe of available substitutes that could achieve the same purpose. The public benefit is served best in such circumstances through the ordinary application of exclusive rights in the market.

Conclusion

Generative AI models may “transform” input data into dazzling new outputs, but this is not the transformation that fair use favors. Under fair use, a transformative use is one that comments on, critiques, or provides new insights about an original work. It is not simply a technological process that digests and reuses expressive content in a different form.

Generative AI training reappropriates the expressive elements of copyrighted works to enable the generation of new content. It does not point back to, analyze, or even acknowledge the originals. That makes it more like satire than parody—creative, yes, but not legally justified without permission.

The choice to allow one’s work to be ingested into a generative system—to become raw material for future outputs—belongs to the copyright owner. Courts should be careful not to let technological innovation obscure that basic principle of copyright law and undermine its ability to benefit the public.

References

References
↑1 Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508, 543 n.18 (2023) (“The [Google] Court did not hold that any secondary use that is innovative, in some sense, or that a judge or Justice considers to be creative progress consistent with the constitutional objective of copyright, is thereby transformative.”).
↑2 Kienitz v. Sconnie Nation LLC, 766 F.3d 756, 758 (7th Cir. 2014) (“We’re skeptical of Cariou‘s approach, because asking exclusively whether something is ‘transformative’ not only replaces the list in §107 but also could override 17 U.S.C. §106(2), which protects derivative works.”; TCA TV Corp. v. McCollum, 839 F.3d 168, 181 (2d Cir. 2016) (“Insofar as Cariou might be thought to represent the high-water mark of our court’s recognition of transformative works, it has drawn some criticism… We need not defend Cariou here.”).
↑3 598 U.S. at 528.
↑4 Mazer v. Stein, 347 U.S. 201, 219 (1954).
↑5 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 599 (1994) (J. Kennedy, concurring).
↑6 17 U.S.C. § 107.
↑7 510 U.S. at 580.
↑8 839 F.3d at 182 (“The ‘dramatic’ purpose served by the Routine in the Play appears to be as a ‘McGuffin,’ that is, as a theatrical device that sets up the plot, but is of little or no significance in itself. To advance the plot of the Play, specifically, to have the puppet Tyrone take on a persona distinct from that of Jason, defendants needed Jason to lie about something and for Tyrone to call him on it. But the particular subject of the lie—the Routine—appears irrelevant to that purpose.”); Monge v. Maya Magazines, Inc., 688 F.3d 1164, 1175 (9th Cir. 2012) (“the controversy here has little to do with photos; instead, the photos here depict the couple’s clandestine wedding. The photos were not even necessary to prove that controverted fact—the marriage certificate, which is a matter of public record, may have sufficed to inform the public that the couple kept their marriage a secret for two years.”).
↑9 Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015) (book search); Authors Guild, Inc. v. HathiTrust, 755 F.3d 87 (2d Cir. 2014) (book search); Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) (image search); Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003) (image search).
↑10 A.V. v. iParadigms, 562 F.3d 630 (4th Cir. 2009).
↑11 Accord Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc., 342 F.3d 191, 198 n.5 (3d Cir. 2003) (“We note that the clip previews do not constitute mere ‘information’ about the movies, as would, for example, a list of the names of the actors starring in a film, or a statement of the rating it received… Regardless, the clips are part of — not information about — Disney’s expressive creations.”).

Friday’s Endnotes – 06/20/25

By , June 20, 2025.

Study: Meta AI model can reproduce almost half of Harry Potter book — “These results give everyone in the AI copyright debate something to latch onto. For AI industry critics, the big takeaway is that—at least for some models and some books—memorization is not a fringe phenomenon.”

Bots are overwhelming websites with their hunger for AI data — “‘The cultural institutions that host online collections are not resourced to continue adding more servers, deploying more sophisticated firewalls, and hiring more operations engineers in perpetuity,’ the report says. ‘That means it is in the long-term interest of the entities swarming them with bots to find a sustainable way to access the data they are so hungry for.'”

Supreme Court declines to hear three IP cases — “Copyright discovery rule. The Court declined to hear the petition in RADesign, Inc. v. Michael Grecco Productions, Inc., Dkt No. 24-1137, letting stand a ruling by the U.S. Court of Appeals for the Second Circuit allowing a photographer’s copyright infringement case against a shoe designer to proceed.”

Beijing court hands AI copyright violators up to 18 months in prison — “The four defendants were accused of using AI software to alter original illustrations found online, creating more than 3,000 jigsaw puzzles for sale and making illegal profits exceeding 270,000 yuan ($37,556), prosecutors said. The court found them guilty under a criminal indictment from district prosecutors, marking what is reportedly the first criminal ruling in Beijing involving copyright infringement through generative AI.”

Music Publishers and X Begin ‘Good Faith’ Negotiations in Copyright Lawsuit — “’Twitter [now X] stands alone as the largest social media platform that has completely refused to license the millions of songs on its service,’ National Music Publishers Association president and CEO David Israelite said in a statement around the time of the suit’s filing. ‘Twitter knows full well that music is leaked, launched, and streamed by billions of people every day on its platform.’”

Friday’s Endnotes – 06/13/25

By , June 13, 2025.

Say ‘No’ to Unlicensed AI Training! — The Copyright Alliance kicked off a grassroots AI campaign that encourages the public to send letters to Members of Congress and President Trump in anticipation of the administration releasing its AI Action Plan in mid-July 2025. The letters urge elected officials to protect the rights and livelihoods of creators by rejecting laws and policies that would allow AI companies to train on their work without consent and compensation. Those interested in participating may use the letters “as is,” revise them, or write their own.

London AI firm says Getty copyright case poses ‘overt threat’ to industry — “Getty’s case against Stability AI for copyright and trademark infringement relating to its vast photography archives reached the high court in London on Monday.” Bonus content—IPKitten has a series of posts covering the legal issues raised in the lawsuit: UK trial begins… (Part 1), Part 2 – copyright and database right, Part 3 – Defences.

In first-of-its-kind lawsuit, Hollywood giants sue AI firm for copyright infringement — “Many companies have gone after AI firms for copyright infringement, such as The New York Times (which sued OpenAI and Microsoft), Sony Music Entertainment (which filed a suit against AI song generator startups Suno and Udio) and Getty Images (against Stability AI). But this is the first time major Hollywood players have joined the fight against the AI landscape.”

AI-driven system helps cut copyright disputes in Textile City — “China’s Textile City, the world’s largest textile distribution hub located in Keqiao, handles about a quarter of the global fabric trade and exports textile products to more than 190 countries and regions. The bustling business also sees frequent disputes related to fabric patterns, said Li Zisu, vice-president of the Keqiao District People’s Court. She revealed that between 2008 and 2020, more than 5,000 merchants were involved in pattern-related lawsuits, and said that the biggest challenge in handling these cases was determining ownership of the pattern copyright.”

Italy probes Meta over music copyright negotiations — “The Italian Competition Authority said it was probing Meta’s alleged abuse of economic dependence of the Italian Society of Authors and Publishers (SIAE), the public authority charged with protecting artists’ copyright in Italy. The SIAE had a contract with Meta that expired in December 2022.”

Friday’s Endnotes – 05/30/25

By , May 30, 2025.

Getty Images spending millions to battle a ‘world of rhetoric’ in AI suit, CEO says — “Technology startups like OpenAI, Anthropic and Mistral have flourished by taking vast amounts of data from the open web and using it to train their foundational AI models, which can produce lifelike texts, images and videos. However, the strategies of these firms have raised concerns over their use of copyrighted material. Several lawsuits have targeted AI firms over alleged copyright infringements from The New York Times’ suit against OpenAI to several U.S. record labels’ claims against AI music generation services Suno and Udio.”

Generative AI’s Illusory Case for Fair Use — “Despite wide employment of anthropomorphic terms to describe their behavior, AI machines do not learn or reason as humans do. Instead, they employ an algorithmic process to store the works they are fed during the training process. They do not ‘know’ anything independently of the works on which they are trained, so their output is a function of the copied materials… The exploitation of expressive content to produce new expressive content sharply distinguishes AI copying from the copying at issue in the technological fair use cases relied upon by AI’s fair use advocates.”

Car in Gone in Sixty Seconds is not entitled to copyright protection — “Prior Ninth Circuit precedent, DC Comics v. Towle, 802 F.3d 1012 (9th Cir. 2015), establishes a test to determine whether a character is entitled to copyright protection: (1) the character must have ‘physical as well as conceptual qualities,’ (2) the character must be ‘sufficiently delineated to be recognizable as the same character whenever it appears’ and display ‘consistent, identifiable character traits and attributes,’ and (3) the character must be ‘especially distinctive’ and contain ‘some unique elements of expression.’ The Eleanor character failed all three parts of the test, the court of appeals found.”

Judge Rejects Ex-Copyright Chief’s Bid to Pause Trump Firing — “Even if Perlmutter was likely to succeed on the merits, [Judge] Kelly said his analysis was pinned on the irreparable harm threshold required to grant the order and Perlmutter did not meet that requirement. Perlmutter’s argument of irreparable harm rested on the idea that she was deprived of the statutory right to function as the register of copyrights, Kelly said. Recent court decisions from the US Supreme Court and the D.C. Circuit have been ‘skeptical’ of that argument, the judge said.”

The ‘beige Amazon influencer’ lawsuit is headed for dismissal — “The lawsuit was simultaneously disconcerting and benign, eerie and borderline comical: the story of two women whose lives had begun to resemble each other’s via social media platforms made for a compelling storyline. The cream, white, and beige aesthetic of their content (and lives) meant that the essence of what was allegedly infringed was commonplace, even basic — but the similarities, documented over dozens of examples submitted to the court, were strange nonetheless”

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