Gil Appel, Juliana Neelbauer, and David A. Schweidel, Harvard Business Review; Generative AI Has an Intellectual Property Problem
"This isn’t the first time technology and copyright law have crashed into each other. Google successfully defended itself against a lawsuit by arguing that transformative use allowed for the scraping of text from books to create its search engine, and for the time being, this decision remains precedential.
But there are other, non-technological cases that could shape how the products of generative AI are treated. A case before the U.S. Supreme Court against the Andy Warhol Foundation — brought by photographer Lynn Goldsmith, who had licensed an image of the late musician, Prince— could refine U.S. copyright law on the issue of when a piece of art is sufficiently different from its source material to become unequivocally “transformative,” and whether a court can consider the meaning of the derivative work when it evaluates that transformation. If the court finds that the Warhol piece is not a fair use, it could mean trouble for AI-generated works.
All this uncertainty presents a slew of challenges for companies that use generative AI. There are risks regarding infringement — direct or unintentional — in contracts that are silent on generative AI usage by their vendors and customers. If a business user is aware that training data might include unlicensed works or that an AI can generate unauthorized derivative works not covered by fair use, a business could be on the hook for willful infringement, which can include damages up to $150,000 for each instance of knowing use. There’s also the risk of accidentally sharing confidential trade secrets or business information by inputting data into generative AI tools."
