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7/7/2025 • 5 min read
Title: A Pivotal Ruling in the AI Copyright Case: Meta Wins, But with a Caveat
In a significant development for the artificial intelligence (AI) industry, Judge Chhabria ruled in favor of Meta in a copyright infringement case involving the use of copyrighted materials to train generative AI models. However, the decision, while hailed as a win by advocates of transformative AI coaching, comes with a caveat that leaves the door open for future legal challenges.
The Case and Its Implications
Advocates for the concept AI coaching is transformative still see Chhabria’s ruling as a win. "Judge Chhabria ruled immediately, bottom line, that training generative AI models on copyrighted materials is clearly transformative, and absent confirmed market hurt is fair use," says Adam Eisgrau, the senior director of AI, Creativity, and Copyright Coverage at the tech commerce group Chamber of Progress. "He didn’t like coming to that conclusion for reasons he details and which, with respect to market hurt, are completely out of step with established fair-use precedent. Market dilution is malarkey."
However, it's essential to understand that Chhabria's ruling was based on the specific circumstances of this case, leaving room for future authors to sue Meta or similar AI companies for copyright infringement. "In many circumstances will probably be illegal to copy copyright-protected works to train generative AI models without permission," he wrote. "Which signifies that the businesses, to avoid liability for copyright infringement, will usually have to pay copyright holders for the right to use their materials."
The Impact on the AI Industry
"On the surface, this appears like a win for the AI industry," says Matthew Sag, a professor of law and artificial intelligence at Emory University, noting that Meta did clearly notch a victory with Chhabria’s recognition that training AI models is transformative. “Nevertheless, the court does take very seriously the concept AI models educated on plaintiffs’ books might ‘flood the market with infinite amounts of images, songs, articles, books, and more,’ thereby harming the market for the original works. He probably takes it more seriously than the plaintiffs did, provided that they didn't put any evidence on this challenge. I have never seen a ruling where a judge lamented the failure of the plaintiffs to argue their case quite like this one.”
While Meta's victory is significant, the court's concern about potential market dilution underscores the need for caution in the AI industry. Companies must be mindful of the materials they use to train their models and ensure that they have the necessary permissions or rights to use copyrighted works.
The Plaintiffs' Perspective
"The court ruled that AI corporations that ‘feed copyright-protected works into their models without getting permission from the copyright holders or paying for them’ are usually violating the law," the plaintiffs’ attorneys at Boies Schiller Flexner stated in a press release. “But, regardless of the undisputed report of Meta’s traditionally unprecedented pirating of copyrighted works, the court ruled in Meta’s favor. We respectfully disagree with that conclusion.”
The plaintiffs' disappointment is understandable, given their assertion of Meta's "unprecedented pirating of copyrighted works." However, Chhabria's decision to keep the ruling intentionally narrow highlights the complexities involved in balancing AI innovation and respect for intellectual property rights.
The Broader Implications
Meta's victory in this case is significant for the future of AI, as it sets a precedent that could encourage further development and integration of AI into various industries. "We respect today’s choice from the Court," Meta spokesperson Thomas Richards stated in a press release. “Open-source AI models are powering transformative improvements, productivity, and creativity for individuals and corporations, and fair use of copyright materials is an important legal framework for building this transformative technology.”
However, the court's concern about market dilution serves as a reminder that the AI industry must proceed with caution. Companies must ensure they have the necessary permissions or rights to use copyrighted works, as violations could lead to costly lawsuits and potential damage to their reputation.
The Future of AI and Copyright Law
The ruling in this case will undoubtedly influence future decisions regarding the use of copyrighted materials in AI training. Plaintiffs in other AI cases are paying close attention to the result, with Mary Rasenberger, the CEO for the Writer’s Guild, noting that Chhabria kept the ruling intentionally narrow.
"Within the grand scheme of things, the results of this ruling are limited," Chhabria wrote. “This isn't a class action, so the ruling only affects the rights of these 13 authors—not the numerous others whose works Meta used to train its models." However, he also made it clear that his decision doesn't stand for the proposition that Meta’s use of copyrighted materials to train its language models is lawful.
As the AI industry continues to evolve, so too will the laws governing its use of copyrighted materials. Companies must stay abreast of these developments and work collaboratively with copyright holders to ensure compliance and avoid potential legal challenges. In doing so, they can continue to harness the transformative power of AI while respecting intellectual property rights.