Boom in AI leads to test of copyright law
The boom in artificial intelligence tools that draw on vast amounts of content from across the internet is beginning to test the limits of copyright law.
Authors and a leading photo agency filed a lawsuit this past year, arguing that their intellectual property was being illegally used to train AI systems, which can produce human-like prose and power applications like chatbots.
Now they are in the spotlight along with the news industry. The New York Times filed a lawsuit Wednesday accusing OpenAI and Microsoft of copyright infringement, the first time a major U.S. news organization has challenged the use of artificial intelligence.
The lawsuit alleges that OpenAI’s ChatGPT and Microsoft’s Bing Chat can produce content nearly identical to Times articles, allowing the companies to “share in the profits of The Times’ massive investments in its journalism by using them to build replacement products without permission or payment.”
OpenAI and Microsoft have not had the opportunity to respond in court. But after the lawsuit was filed, those companies noted that they were in discussions with a number of news organizations about using their content — and, in the case of OpenAI, had begun signing agreements.
Without such agreements, the boundaries can be worked out in court, with significant consequences. Data is critical to the development of generative AI technologies – which can independently generate text, images and other media – and to the business models of companies that do that work.
“Copyright will be one of the key issues shaping the generative AI industry,” said Fred Havemeyer, an analyst at financial research firm Macquarie.
A central consideration is the fair use doctrine in intellectual property law, which allows creators to build on copyrighted work. Among other factors, defendants in copyright cases must prove that they have substantially transformed the content and are not competing in the same market as a substitute for the original creator’s work.
For example, a review that quotes passages from a book might be considered fair use because it builds on that content to create new, unique work. Selling extended excerpts from the book, on the other hand, may be contrary to doctrine.
Courts have not ruled on how these standards apply to AI tools.
“There is no clear answer as to whether there is copyright infringement or fair use in the United States,” said Ryan Abbott, an attorney at Brown Neri Smith & Khan, who handles intellectual property cases . “In the meantime, there are many lawsuits underway, with potentially billions of dollars at stake.”
It may take some time before the industry gets definitive answers.
The lawsuits asking these questions are in the early stages of litigation. If they don’t reach settlements (as is the case with most lawsuits), it could take years before a federal district court decides the case. These rulings would likely be appealed, and appellate decisions could vary by circuit, potentially sending the issue to the U.S. Supreme Court.
It could take about a decade to get there, Mr. Abbott said. “A decade is an eternity in the market we live in today,” he said.
The Times said in its lawsuit that it was in discussions with Microsoft and OpenAI about terms for resolving the dispute, possibly including a license. The Associated Press and Axel Springer, the German owner of media such as Politico and Business Insider, recently data licensing agreements with Open AI.
Taking cases to court could answer crucial questions about what copyrighted data AI developers can use and how. But it could also simply serve as leverage for a plaintiff to secure a more favorable licensing agreement through a settlement.
“Whether or not this lawsuit will ultimately shape copyright law will ultimately be determined by whether the lawsuit is really about the future of fair use and copyright, or whether it is a salvo in a negotiation,” said Jane Ginsburg, a professor at Columbia Law School. , The Times said of the lawsuit.
How the legal landscape unfolds could determine the emerging but heavily capitalized AI industry.
Some AI companies have been flooded with venture capital in the past year after the public rollout of ChatGPT went viral. An equity plan under consideration could value OpenAI at more than $80 billion; Microsoft has invested $13 billion in the company and incorporated the technology into its own products. But questions about the use of intellectual property to train models are a top priority for investors, Mr. Havemeyer said.
Competition in AI can come down to data haves and have-nots.
Companies with the rights to large amounts of data, such as Adobe and Bloomberg – or that have amassed their own data, such as Meta and Google – have started developing their own AI tools. Mr. Havemeyer noted that an established company like Microsoft is well equipped to secure data licensing agreements and address legal challenges. But startups with less capital may have a harder time getting the data they need to compete.
“Generative AI starts and ends with data,” Mr. Havemeyer said.
Benjamin Mullin reporting contributed.