Blogs
June 27, 2025

Kadrey v. Meta Decision: Did Meta Just Win the Battle, But Lose the War?

by Keith Kupferschmid

Since Judge Chhabria of the Northern District of California issued his decision in the Kadrey v. Meta case on Wednesday, June 25, there have been a lot of articles about how Meta “won the case.” These articles don’t do justice to the true impact of the actual decision in the case—most of them just scratch the surface. There is little doubt that this is a big loss for the thirteen plaintiffs involved in the case. But the real takeaway here is that in many ways this case represents a victory for all other copyright owners. If you haven’t read the case and don’t have the time to do so, then just read quotes from the case that are included below (followed by the page where they appear). After reading them, ask yourself if you really believe that AI companies like Meta actually “won the case.”

  • “Because the performance of a generative AI model depends on the amount and quality of data it absorbs as part of its training, companies have been unable to resist the temptation to feed copyright-protected materials into their models—without getting permission from the copyright holders or paying them for the right to use their works for this purpose. This case presents the question whether such conduct is illegal. Although the devil is in the details, in most cases the answer will likely be yes.” (page 1)
  • “There is certainly no rule that when your use of a protected work is ‘transformative,’ this automatically inoculates you from a claim of copyright infringement.” (page 3)
  • “Under the fair use doctrine, harm to the market for the copyrighted work is more important than the purpose for which the copies are made.” (page 3)
  • “[W]hen it comes to market effects, using books to teach children to write is not remotely like using books to create a product that a single individual could employ to generate countless competing works with a miniscule fraction of the time and creativity it would otherwise take. This inapt analogy is not a basis for blowing off the most important factor in the fair use analysis.” (page 3)
  • “Another argument offered in support of the [AI] companies is more rhetorical than legal: Don’t rule against them, or you’ll stop the development of this groundbreaking technology. The technology is certainly groundbreaking. But the suggestion that adverse copyright rulings would stop this technology in its tracks is ridiculous. These products are expected to generate billions, even trillions, of dollars for the companies that are developing them. If using copyrighted works to train the models is as necessary as the companies say, they will figure out a way to compensate copyright holders for it.” (Page 3-4)
  • “The upshot is that in many circumstances it will be illegal to copy copyright-protected works to train generative AI models without permission. Which means that the companies, to avoid liability for copyright infringement, will generally need to pay copyright holders for the right to use their materials.” (page 4)
  • “Given the state of the record, the Court has no choice but to grant summary judgment to Meta on the plaintiffs’ claim that the company violated copyright law by training its models with their books. But in the grand scheme of things, the consequences of this ruling are limited. This is not a class action, so the ruling only affects the rights of these thirteen authors—not the countless others whose works Meta used to train its models. And as should now be clear, this ruling does not stand for the proposition that Meta’s use of copyrighted materials to train its language models is lawful. It stands only for the proposition that these plaintiffs made the wrong arguments and failed to develop a record in support of the right one.” (page 5)
  • “Because it ‘focuses on actual or potential market substitution,’ Warhol, 598 U.S. at 536 n.12, the fourth factor is ‘undoubtedly the single most important element of fair use,’ Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 566 (1985). If the law allowed people to copy your creations in a way that would diminish the market for your works, this would diminish your incentive to create more in the future. Thus, the key question in virtually any case where a defendant has copied someone’s original work without permission is whether allowing people to engage in that sort of conduct would substantially diminish the market for the original work. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994).”  (page 6-7)
  • The judge distinguishes AI training from human learning by saying:
    • “First, an LLM’s consumption of a book is different than a person’s…”
    • “Second, unlike the hypothetical professor, Meta did not just give the plaintiffs’ books to one person. … By creating a tool that anyone can use, Meta’s copying has the potential to exponentially multiply creative expression in a way that teaching individual people does not.” (page 17)
  • “[W]hether the secondary use is transformative doesn’t dictate the outcome of the first factor analysis (let alone of the entire fair use inquiry).” (page 18)
  • “[E]ven though LLMs may only learn about “statistical relationships,” those relationships are the product of creative expression. This is true even though…Llama consumes that expression in a different way than a person would.”  (page 24)
  • “Meta cites Google Books. But that case is distinguishable… Unlike here, the technology at issue in Google Books was content agnostic: The database wouldn’t work any better or worse if it contained books full of complete gibberish or written in unknown languages. If someone searched for that text, those books would appear. Here, by contrast, if Meta’s LLMs are to generate high-quality text, they need coherent, reasonably high-quality training data. In other words, they need high-quality expression. Therefore, the “intermediate copying” cases don’t apply. See Disney Enterprises, Inc. v. VidAngel, Inc., 869 F.3d 848, 862 n.12 (9th Cir. 2017).” (page 24)
  • “[T]he fourth factor is ‘undoubtedly the single most important element of fair use.’ Harper & Row, 471 U.S. at 566. Meta is therefore wrong to suggest that, because the first factor strongly favors it, the inquiry should basically end there. To the contrary, given the fourth factor’s importance, it’s easy to imagine a situation in which a secondary use is highly transformative, but the secondary user nonetheless loses on fair use because allowing people to engage in that kind of use would have too great an effect on the market for the original work.” (page 26)
  • “[I]t’s easy to imagine that AI-generated books could successfully crowd out lesser-known works or works by up-and-coming authors. While AI-generated books probably wouldn’t have much of an effect on the market for the works of Agatha Christie, they could very well prevent the next Agatha Christie from getting noticed or selling enough books to keep writing.” (page 29)
  • “It’s true that, in many copyright cases, this concept of market dilution or indirect substitution is not particularly important. That’s because, in a more typical case, an original work is being compared to a single secondary work. (page 31) … This case is different. This is not a case where an original work is being compared to one secondary work. Nor is this case like the previous fair use cases involving creation of a digital tool. In those cases, like Google Books and Perfect 10, the tool could at most be used to access part or all of the original works. This case, unlike any of those cases, involves a technology that can generate literally millions of secondary works, with a miniscule fraction of the time and creativity used to create the original works it was trained on. No other use—whether it’s the creation of a single secondary work or the creation of other digital tools—has anything near the potential to flood the market with competing works the way that LLM training does. And so, the concept of market dilution becomes highly relevant.” (page 32)
  • “[I]t seems likely that market dilution will often cause plaintiffs to decisively win the fourth factor—and thus win the fair use question overall…” (page 32)
  • “In cases involving uses like Meta’s, it seems like the plaintiffs will often win, at least where those cases have better-developed records on the market effects of the defendant’s use. No matter how transformative LLM training may be, it’s hard to imagine that it can be fair use to use copyrighted books to develop a tool to make billions or trillions of dollars while enabling the creation of a potentially endless stream of competing works that could significantly harm the market for those books. And some cases might present even stronger arguments against fair use. For instance, as discussed above, it seems that markets for certain types of works (like news articles) might be even more vulnerable to indirect competition from AI outputs.”

If you aren’t already a member of the Copyright Alliance, you can join today by completing our Individual Creator Members membership form! Members gain access to monthly newsletters, educational webinars, and so much more — all for free!

get blog updates