November 2023 Roundup of Copyright News

In November, Artificial Intelligence (AI) dominated the courts as new class action lawsuits were filed, and there were several developments in existing cases involving OpenAI and other well-known AI companies. Here is a quick snapshot of those and other copyright-related activities that occurred during the month of November as well as a few events to look forward to in December.

Copyright Alliance Activities

Copyright Alliance Blogs: We published several new blogs during the month of November.

  • Copyright Alliance CEO, Keith Kupferschmid, wrote a blog post for Thanksgiving 2023, of what and whom he was most grateful for amidst all the copyright issues this year.
  • We published a three-part series on copyright cases visual artists should know. Part one discusses copyrightability, part two is on authorship, and part three is on infringement and fair use.

CCB Status Update: At the end of November 2023, 671 total cases had been filed with the Copyright Claims Board (CCB). Of these claims, 270 are “smaller claims.” In at least 194 of all cases, the claimant is using legal counsel. At least 605 of the cases involve infringement claims, 115 involve Section 512(f) misrepresentation claims, and 21 involve claims for declarations of noninfringement. The eCCB docket currently shows that the works at issue in these cases are as follows: Pictorial Graphic & Sculpture (301 cases); Literary Works (103); Motion Picture and Audiovisual Works (125); Sound Recordings (71); Musical Works (48); and some cases include claims for multiple works. Ninety-three foreign residents have filed claims. Of all the cases filed, 481 have been dismissed for the following reasons: Due to Respondent’s Opt-Out (59); Due to Failure to Amend Noncompliant Claim (240); Registration Issues (11); Due to Failure to Provide Proof of Service of Process (91); Claimant Withdrawal and Dismissal of Claims (45); Bad Faith Claimant (6); and Settlement (29). There are 48 active proceedings and 12 final determinations.

CCB Issues Three New Final Determinations: On November 1, the CCB issued a final determination in the case of Julie Dermansky v. Rule 62, Inc. and a final determination in the case of, Ltd. v. Faviana International, Inc. In both cases, the CCB adopted a proposed default determination, and awarded damages of $1,350 and $2,600 respectively. On November 20, the CCB issued a final determination in the case of Benjamin Bronner v. EssayZoo, also adopting a proposed default determination. The tribunal awarded $1,200 in statutory damages in that proceeding.

USCO Extends Deadline to Submit Reply Comments for SNPRM on Termination Rights Under the MMA: On November 16, the Copyright Office extended the deadline to submit reply comments in response to its supplemental notice of proposed rulemaking regarding its draft regulations governing the processes and procedures surrounding the termination of rights and royalties related to the statutory mechanical blanket license administered by the Mechanical Licensing Collective (MLC) under the Music Modernization Act (MMA). Comments are now due today, December 5.

House Passes Legislative Branch Funding Bill: On November 1, the House of Representatives passed bill H.R. 4364 to fund the legislative branch for fiscal year 2024, which reportedly reflects “modest” increases to certain agencies including the Congressional Budget Office, Library of Congress, and Government Accountability Office. The bill allocates $101,011,000 to the U.S. Copyright Office, of which not less than $10.3 million is allocated for Office modernization initiatives.  On November 14, 2023, Congress officially passed an additional continuing resolution to extend funding for federal agencies covered by four appropriations bills until January 19, 2024, and until February 2, 2024, for the remaining eight spending bills (which includes Commerce-Justice-Science and Legislative Branch bills).

Senator Schumer Holds AI Insight Forum on Copyright: On November 29, Senator Chuck Schumer (D-NY) held the seventh closed-door AI meeting in the Insight Forum series. The meeting focused on transparency, explainability, and intellectual property and copyright issues. Speakers included Ali Farhadi, Allen Institute for AI; Ben Brooks, Stability AI; Curtis LeGyt, National Association of Broadcasters (NAB); Danielle Coffey, News/Media Alliance; Jon Schleuss, News Guild; Vanessa Holtgrewe, IATSE; Duncan Crabtree-Ireland, SAG-AFTRA; Ben Sheffner, Motion Picture Association (MPA); Dennis Kooker; Sony Music Entertainment; Rick Beato, musician; and Ziad Sultan, Spotify. The speakers generally agreed that no legislative changes were necessary at this time because the issues were being played out in the courts. 

Court Grants Meta’s Motion to Dismiss in Silverman AI Lawsuit: On November 20, Judge Vince Chhabria of the district court for the Northern District of California granted Meta’s motion to dismiss (with leave to amend) in the case brought against it by Richard Kadrey (and other authors) for the unauthorized use of plaintiffs’ books to train Meta’s LLaMA large language model. The order rejects plaintiffs’ claims that the LLaMa model itself is an infringing derivative work and that every output of the model qualifies as an infringing derivative of the input. The court states that “plaintiffs are wrong to say that, because their books were duplicated in full as part of the LLaMA training process, they do not need to allege any similarity between LLaMA outputs and their books to maintain a claim based on derivative infringement.” Rejecting the 1201 violation claims, the court says that “there are no facts to support the allegation that LLaMA ever distributed the plaintiffs’ books, much less did so ‘without their CMI.’” The order also dismisses the unjust enrichment and negligence claims as preempted. Plaintiffs’ amended complaint is due December 11. Importantly, the claims relating to ingestion of the copyrighted works for training purposes were not dismissed by the court because they were not included in defendant’s motion and therefore were not considered by the court at this stage.  

New Class Action Filed By Writers Against OpenAI and Microsoft: On November 21, a new complaint was filed by a group of nonfiction writers against OpenAI and Microsoft in the Southern District of New York. The proposed class action lawsuit, led by Julian Sancton, accuses the companies of direct and contributory infringement related to the unauthorized use of plaintiffs’ literary works to train ChatGPT. Notably, the contributory infringement claims are directed at Microsoft for materially contributing to OpenAI’s direct infringement by providing investment money and supercomputing systems.

Anthropic Files Motion to Dismiss Music Publishers’ AI Lawsuit for Lack of Personal Jurisdiction: On November 22, AI company, Anthropic, filed a motion to dismiss a copyright infringement lawsuit over the ingestion of musical works for AI training brought by a group of music publishers, including Universal Music. Anthropic argues that the Middle District of Tennessee was not the proper district to hear the case. and that as a California-based company, its contacts with Tennessee and plaintiffs’ claims arising from those contacts are legally insufficient for the court to have jurisdiction over Anthropic. In the alternative, Anthropic argues that the venue should be at least transferred to the Northern District of California, where a number of other AI and copyright lawsuits are being heard.

Plaintiffs in Visual Artists Class Action Lawsuit File Amended Complaint Adding Several New Plaintiffs: On November 29, an amended complaint was filed in the Anderson class-action visual artists lawsuit against Stability AI, DeviantArt, Midjourney, and Runway AI, adding several new plaintiffs, including Hawke Southworth, Greg Rutkowski, Gregory Manchess, Gerald Brom, Jingna Zhang, Julia Kaye, and Adam Ellis. The amended complaint further details the copyright implications in a diffusion-style training process, the inclusion of named plaintiffs’ works in the LAION-5B dataset, and provides exhibits of examples where AI-generated outputs similar to plaintiffs’ ingested works had been produced upon using a plaintiff’s name as a prompt. The plaintiffs make direct copyright infringement claims, alleging that Stable Diffusion copied plaintiffs’ works during the AI training process, and also allege that Stable Diffusion is liable for inducement of copyright infringement.

Biden Administration Activities

OMB Releases New Draft AI Guidance for Federal Government: On November 1, the Office of Management and Budget (OMB) released a draft memorandum providing guidance on federal government uses of AI. The memorandum acknowledges that AI could impact intellectual property and among other things, directs federal departments and agencies to designate Chief AI Officers and to ensure that procured AI complies with applicable laws, including those addressing privacy confidentiality, copyright, and civil rights and liberties.

Chinese Court Holds That AI-Generated Image Is Protected by Copyright: Chinese court held that an AI-generated image was protected by copyright since the plaintiff made intellectual investments and conceptions such as selecting and arranging prompts, selecting the input images, setting relevant parameters, and other choices that led to the final image.

USPTO Releases Updated China IP Rights Toolkit: On November 30, the U.S. Patent and Trademark Office (USPTO) released a revised edition of the China Intellectual Property Rights (IPR) Toolkit, which describes recent changes made to China’s IP-related laws and government structures. The toolkit provides an in-depth look and explanation of the basics of Chinese IP laws to help rights holders who do business in China. 

Industry Activities

MLC Announces Distribution of More Than $1.5 Billion in Royalties: The Mechanical Licensing Collective (MLC) announced that it has now distributed more than $1.5 billion in mechanical royalties to publishers and songwriters, which is up from more than $800 million at this time last year.

Prominent AI Developer Ed Newton-Rex Departs Stability AI Due to its Disrespect for Copyright: According to recent announcements, Ed Newton-Rex—a widely known AI developer who founded Jukedeck a decade ago before becoming the Product Director of TikTok’s AI Lab and ultimately leading the development of Stable Audio—is leaving Stability AI over his “personal respect for copyright clash[ing] with that of his employer in recent weeks, after Stability AI argued in favor of the ‘fair use’ of copyrighted material to fuel generative AI within a submission to the U.S. Copyright Office.” In what’s been described as a “public resignation letter” published in Music Business Worldwide, Newton-Rex—who is also a music composer—states, “I’ve resigned from my role leading the Audio team at Stability AI, because I don’t agree with the company’s opinion that training generative AI models on copyrighted works is fair use.” Newton-Rex also noted that, “Companies worth billions of dollars are, without permission, training generative AI models on creators’ works, which are then being used to create new content that in many cases can compete with the original works. I don’t see how this can be acceptable in a society that has set up the economics of the creative arts such that creators rely on copyright.”

Look Forward to And Save the Date For…

Extended Deadline to Submit Reply Comments to the USCO for AI Study: Reply comments are now due tomorrow, December 6,for the Copyright Office’s Artificial Intelligence and Copyright study. Input will be used by the Office to help it assess whether legislative or regulatory steps are warranted and to provide information on issues involving the use of copyrighted works to train AI models, the appropriate levels of transparency and disclosure with respect to the use of copyrighted works, and the legal status of AI-generated outputs. Instructions for submitting comments are available on the Office’s website.

IBPA Update on Copyright Claims Board: On December 13 at 1:00 p.m. ET, the Independent Book Publishers Association (IBPA) is hosting An Update on the Copyright Claims Board discussing how the CCB is progressing in terms of providing an affordable and streamlined alternative to federal court for certain small copyright claims. The event speaker is Copyright Alliance CEO Keith Kupferschmid.

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!

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