Explained | Could a photography dispute in the U.S. affect ChatGPT and its cousins? Premium

The decision of the U.S. Supreme Court in Andy Warhol Foundation for the Visual Arts Inc. v. Goldsmith et al. on May 18, 2023, has added more unpredictability to the process of finding whether the use of an artistic objects constitutes fair use, with implications for how we regulate generative AI like ChatGPT.

Copyright law protects the work of diverse artists, including photographers, as well as provides a set of exclusive rights for artists over their creative output. This includes controlling the manner in which others reproduce or modify their work. However, these exclusive rights are balanced with the rights of the users of such work, including other artists who might want to build on or comment on them, with the help of diverse exceptions under copyright law.

What is exempt from infringement liability?

Different jurisdictions follow different approaches to exceptions. Some, particularly countries in continental Europe, adopt the ‘enumerated exceptions approach’: the use in question needs to be specifically covered under the statute to be considered as an exception to infringement. Some others, including the U.S., follow an open-ended approach that doesn’t specify exemptions beforehand; instead, they have guidelines about the types of uses that can be exempted.

The U.S. courts primarily consider four factors when determining whether a particular use can be considered to be an instance of fair use: (1) purpose and character of the use; (2) nature of the copyrighted work; (3) amount and substantiality of the portion taken by the defendant, and (4) effect of the use on the potential market of the plaintiff’s work.

Of these, U.S. courts have been giving the highest importance to the first factor. In particular, whether the use of something can be considered “transformative” has often played the most critical role in determining the final outcome in a fair-use case.

This open-ended approach to exceptions provides U.S. copyright law considerable flexibility and strength to deal with challenges posed by emerging technologies on the copyright system. However, it has a major limitation: there is no way to know whether an activity will be exempted from liabilities until after litigation. That is, it is very hard to predict ex ante whether an activity will be exempted from copyright infringement liabilities.

The recent decision of the U.S. Supreme Court in Andy Warhol Foundation for the Visual Arts Inc. v. Goldsmith et al. has just added more unpredictability to this process – with implications for how we regulate a powerful form of artificial intelligence.