You Can’t Steal Your Way to Fair Use: The Unclean Hands Doctrine and AI Training
The following blog post is part four of a four-part series on the use of pirated copies of copyrighted works by AI companies and whether such use should be considered to be fair use.
This is the last post in a series of blogs devoted to the use of pirated works from illicit sources by AI companies. In the first three blogs in this series, we discussed (1) the unsuccessful history of companies trying to build a business by using goods acquired from illicit supply chains (part 1), and (2) the application of the fair use defense to AI companies when they train on pirated works obtained from illicit sources (part 2 and part 3). In this last blog post, we address possible application of the doctrine of unclean hands to AI companies’ fair use defense when those companies have knowingly obtained pirated works from illicit sources.
The Unclean Hands Doctrine Explained
The unclean hands doctrine is a rule of equity that bars a claim or defense when the party seeking that claim or defense is guilty of misconduct in connection with the litigation. The doctrine derives from the maxim, “he who comes into equity must come with clean hands.” In essence, this doctrine stands for the proposition that anyone seeking the help of an equitable court must act virtuously, ethically, and lawfully. To prevail, the party making the claim must demonstrate that the other party engaged in inequitable conduct that is related to the subject matter of the litigation, as opposed to merely alleging general immoral or corrupt conduct.
Although the unclean hands doctrine is typically an affirmative defense brought by defendants against plaintiffs, it may also be brought by plaintiffs against defendants in opposition to an equitable defense such as estoppel or laches. For example, in Petrella v. MGM, the U.S. Supreme Court explained that where a copyright owner makes intentionally misleading representations concerning enforcement and the alleged infringer detrimentally relies on them, the equitable doctrine of estoppel can potentially bar the copyright claim entirely.
Although most cases involving unclean hands arise due to the acts of plaintiffs, when a defendant brings an equitable affirmative defense, that defendant may be held to the same unclean hands standard as a plaintiff. Thus, where a defendant tries to use an equitable defense against a plaintiff, the plaintiff can turn the unclean hands doctrine back on the defendant. As a result, if the defendant has engaged in fraudulent or unethical conduct related to that specific defense, the court can reject the defendant’s equitable defense.
Is the Doctrine of Unclean Hands a Viable Defense Against a Fair Use Claim?
As a general matter, the unclean hands doctrine will be of no help to plaintiff copyright owners against a fair use defense brought by an AI company for using lawfully acquired copyrighted works for training purposes. However, where the AI company has knowingly obtained pirated copies, it may be possible for plaintiffs to use the unclean hands doctrine to void an AI company’s fair use defense.
The Supreme Court has repeatedly called fair use an “equitable rule of reason.” In Sony Corp. v. Universal City Studios, the Court quoted the House Report accompanying the 1976 Copyright Act, which says that “since the doctrine is an equitable rule of reason, no generally applicable definition is possible, and each case raising the question must be decided on its own facts.” More recently, the Supreme Court stated in Google v Oracle:
We have described the “fair use” doctrine, originating in the courts, as an “equitable rule of reason” that “permits courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.” Stewart v. Abend, 495 U.S. 207, 236 (1990) (internal quotation marks omitted). The statutory provision that embodies the doctrine indicates, rather than dictates, how courts should apply it.
Later in the decision, the Court states “As far as contemporary fair use is concerned, we have described the doctrine as an “equitable,” not a “legal,” doctrine.”
The fact that fair use is an “equitable rule of reason” does not necessarily mean that “fair use is an equitable doctrine” or “fair use is governed by equity” that could be susceptible to a defense of unclean hands. While there is substantial overlap, the terms carry different implications. The term “equitable” can be used descriptively without invoking the entire body of traditional equity jurisprudence. An “equitable rule of reason” is a method of decision-making. Thus, saying fair use is an “equitable rule of reason” means that it entails a flexible balancing of considerations that involves fairness, balance, flexibility, and contextual judgment, rather than application of rigid rules. On the other hand, in the traditional law/equity framework, an equitable doctrine, such as the doctrine of unclean hands, is one that developed in the courts of equity and/or is administered according to equitable principles.
The Supreme Court’s language in Google v. Oracle—that fair use is an “equitable” rather than “legal” doctrine—seems to place “fair use” closer to rules of equity. That is especially true when one considers that fair use was originally conceived as a judicial doctrine developed to prevent the copyright statute from producing unreasonable results. Congress eventually codified fair use in Section 107 of the Copyright Act, but the Supreme Court and other courts have made clear and have repeatedly treated the four fair use factors in Section 107 as non-exclusive. For example, there are other factors that courts routinely consider, such as the goals of copyright and public benefit certainly pushes fair use closer to rules of equity. That point is further bolstered in the Google v. Oracle case in which the Court explained that “[t]he statutory provision that embodies the doctrine indicates, rather than dictates, how courts should apply it.”
When one takes into account fair use’s equitable origins, the potential for a court to invoke other considerations into the fair use analysis, and its characterization by the Supreme Court as an “equitable rule of reason” that is not a “legal doctrine,” it would seem to provide support for a court to apply the doctrine of unclean hands in the case of AI companies’ use of pirated copies for training when determining whether such use qualifies as a fair use. Thus, there is a relatively strong argument to be made that the equitable character of fair use permits, and perhaps requires, the court to consider an AI company’s inequitable conduct in determining whether the company’s particular use was a fair use.
Using the Unclean Hands Doctrine to Void AI Companies’ Fair Use Defense
Where an AI company: (1) knows that enormous quantities of copyrighted works are available through legitimate licensing, purchase, or other legitimate means; (2) deliberately obtains pirated copies of those works because it’s cheaper, easier and more convenient to do so; (3) knows or has reason to know that the copies were pirated or otherwise unlawfully obtained; (4) ingests them into a commercial AI training dataset; and (5) argues that its resulting use of those works is a fair use, there is a compelling equitable argument that the defendant should not be permitted to characterize its use without accounting for the manner in which it obtained the copyrighted works.
To be clear, this is not just a rehashing of ‘bad faith” arguments. “Unclean hands” and “bad faith” are different. As discussed in part II of this blog series, “bad faith” is a factor often considered in the context of the purpose and nature of the use under the first fair use factor, and potentially other fair use factors. But unclean hands is a distinct equitable doctrine that bears on whether the defendant should be entitled to the defense at all. As a result, when considering the relationship between the doctrine of unclean hands and fair use, the relevant fair use question should not only be: “what did the defendant do with the copyrighted work?” It should also be: “how did the defendant come to possess the copyrighted work in the first place, and does any misconduct regarding such possession bear on the equitable judgment whether this particular use should receive the privilege of fair use?”
AI companies’ inequitable conduct should not be treated as ancillary to a fair use inquiry; it is part of the factual circumstances that created the very use for which the company seeks the protection of fair use. At the heart of the matter, the unclean hands argument comes down to three simple facts:
- Fair use is an equitable rule of reason.
- Equity traditionally disfavors allowing a party to benefit from its own inequitable conduct.
- Allowing an AI company to invoke fair use after deliberately obtaining pirated works allows them to use the very act of misconduct that violated copyright interests as the foundation for a fair use defense.
Any court should be reluctant to apply the fair use doctrine rigidly in favor of an AI company whose use was made possible by deliberately obtaining millions of pirated works, particularly where lawful acquisition was available. The doctrine of unclean hands may provide the court with an equitable doctrine by which to demonstrate that reluctance.
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