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Generative AI, Andy Warhol ‘Fair Use’ Lead 2023 Copyright Issues

Dec. 28, 2022, 10:05 AM

How copyright law applies to the fast-growing generative artificial intelligence industry, and the US Supreme Court’s ruling in a case concerning Andy Warhol’s artistic use of a photograph of Prince are among the most important copyright issues heading into 2023.

Other major copyright cases in the new year include the high court’s expected decision on whether to hear a multimillion-dollar dispute involving allegations that Google LLC illegally scraped lyrics from the crowd-sourced lyric annotation website Genius.

“Never before has content and intellectual property been so important and we are starting to see that now in terms of the Supreme Court’s docket,” said copyright attorney Scott Burroughs of the firm Doniger Burroughs PC, which helped write a friend-of-the-court brief asking the justices to take the lyrics case.

In one of the most active federal appeals courts for copyright law, two photographers are challenging the 15-year-old “server test.” That precedent holds that a website displaying an embedded Instagram post can’t be held liable for copyright infringement because the image isn’t hosted on the website’s servers.

Copyrights and AI

The generative AI industry has produced a number of popular programs in the past year that have upended creative industries. OpenAI Inc.'s DALL-E 2 program allows users to create complex artistic images from text prompts, and its Copilot program generates lines of code based on a user’s plain- language description of a programming function.

But whether these programs, which are built on machine learning models that analyze billions of copyrighted works across the internet, infringe on the rights of artists and programmers isn’t entirely clear.

Two open source programmers in November filed a lawsuit against OpenAI, GitHub Inc., and Microsoft Corp. over Copilot, arguing that the program often reproduces their code without the proper license information or attribution.

Courts have not yet weighed in on whether training an AI program like DALL-E on copyrighted art without permission from the artist falls under the fair use defense. The fair use doctrine allows for the use of copyrighted works without authorization in an effort to balance copyright law and free expression.

“It’s an interesting question because the pictures are not really, strictly speaking, being scanned and scraped for their expressive content, but rather for their data,” said intellectual property attorney Aaron Moss of Greenberg Glusker LLP.

Cases like Authors Guild v. Google might provide some guidance, he noted. The New York-based US Court of Appeals for the Second Circuit in 2015 ruled that Google manually scanning millions of copyrighted books without a license to create its book search project was fair use.

Warhol and Fair Use

The Supreme Court is expected to hand down a decision in its most recent copyright case, Andy Warhol Foundation v. Goldsmith, which could redefine the boundaries of fair use in artistic works for the first time since the 1990s.

The case focuses on whether Andy Warhol’s portraits of the musician Prince, based on photographs taken by Lynn Goldsmith, are “transformative” enough to prevent a copyright infringement claim.

Goldsmith succeeded in convincing a federal appeals court that Warhol’s prints are infringing because they are “derivatives” of her copyrighted photographs. But the Andy Warhol Foundation argued that Warhol’s prints, which are cropped and highly colorized, have transformed the message and meaning of the original photographs.

The question presented to the high court by the foundation focused only on transformativeness, which falls under the first of four statutory fair use factors. But Moss noted that during oral argument in October the justices “did not seem to feel at all constrained by the question presented.”

Some justices focused their questioning on the fourth factor, which examines whether Warhol’s prints undermine the market and value of Goldsmith’s original photographs.

If the Supreme Court tightens up the definition of transformative use, “it will trickle down,” said Heather Antoine of Stubbs Alderton & Markiles LLP. “This is one of those things that comes up every day, and in copyright cases constantly.”

Web-Scraping Fight

The Supreme Court in early December asked the US Solicitor General to weigh in on whether it should take up a case that accused Google of illegally scraping lyrics off the website Genius and posting them at the top of search results pages.

Genius said the scraping breached its terms of service agreement and diverted internet traffic from its website, resulting in tens of millions of dollars in lost advertising revenue.

While neither Google nor Genius own the copyrights to the lyrics, Google won a judgment in the Second Circuit, which found that the Copyright Act preempts Genius’ breach-of-contract lawsuit.

Genius and friend-of-the-court briefs argued that countless internet businesses rely on terms of service contracts to prevent the information on their website from being posted elsewhere, even when those businesses don’t own the copyrights to that information.

The court’s request for input from the government could be a good sign.

“If Genius has been wronged, we’re essentially telling them that they can’t fix that because they don’t own the copyrights to the lyrics,” Antoine said. “I don’t think the court is going to sit with that.”

Instagram Embeds

The San Francisco-headquartered US Court of Appeals for the Ninth Circuit, which receives a high volume of copyright cases, will soon revisit a legal test it established in 2007 that has faced enormous scrutiny from district courts across the country, and artists enforcing their copyrights online.

The server test, first articulated in Perfect 10 v. Amazon.com Inc., established that a website that displays an unauthorized copyrighted work can’t be held liable for infringement if the work is digitally stored elsewhere.

A blog containing an embedded Instagram post, for example, is free from copyright liability because the photograph is technically stored on Instagram’s servers, not the blog’s.

Two photographers brought a class action again Instagram in 2021, arguing that the platform’s easily accessible embed tool allows widespread copyright infringement from websites that display posts without a license.

A judge in the Northern District of California dismissed the case, citing the server test’s binding precedent in Ninth Circuit.

But other judges have explicitly gone against that precedent. A judge in the Southern District of New York rejected the server test in a March ruling over Instagram embeds in a Newsweek article.

Moss said the conflicting rulings across the country make “it very difficult for anyone engaged in publishing.”

“What we have is a number of individual judges who have clearly decided that they want nothing to do with the server test,” he said.

To contact the reporter on this story: Isaiah Poritz in Washington at iporitz@bloombergindustry.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com