Bloomberg Law – Gibson Dunn’s Howard Hogan, Connor Sullivan, and Jeffrey Myers analyze the evolution of copyright and legal questions surrounding generative AI, and how courts are responding. On Aug. 24, 2023 the Copyright Office issued a request for comment on ways that generative AI technology that is “capable of producing outputs such as text, images, video, or audio” will affect “the future of creative industries” and “the copyright system” as a whole. It’s not yet clear how much change will be caused by computer systems that are capable of replicating creative processes long considered to be fundamentally human. But some of the legal questions surrounding generative AI are starting to come into focus. A class of authors and creators including comedian Sarah Silverman has already filed suit against generative AI trailblazers, asserting that the act of including preexisting copyright-protected materials in datasets used to train generative AI systems infringes their exclusive rights under the Copyright Act. These cases involve comedians like Sarah Silverman and, in a case filed Sept. 19, “Game of Thrones” author George R.R. Martin. Fortunately, case law provides important clues as to the framework that will be used to analyze this question. The 2015 Authors Guild Inc. v. Google, Inc. case provides a good starting point. In Authors Guild, the Second Circuit Court of Appeals held that Google’s practice of digitizing books without authorization to create a searchable database was a “fair use” that couldn’t give rise to liability. Importantly, the court focused on the “highly transformative purpose” of Google’s use of this material—that Google was transforming many diverse copyright-protected books into a new, useful search mechanism that didn’t compete with the underlying works. The US Supreme Court’s 2023 decision in Andy Warhol Foundation v. Goldsmith demonstrates an important limit to that defense. There, the court concluded that artist Andy Warhol’s replication of someone else’s photograph in one of his works wasn’t protected under the fair use doctrine. In contrast to the database at issue in the Authors Guild case, the court found that Warhol’s recoloring and replication of the preexisting photo did have the potential to act as a substitute for the original work. The Supreme Court urged lower courts to focus on the fourth of four statutory fair use factors, advising that the effect that the allegedly infringing work may have on the market for, or value of, the original work should weigh heavily in the analysis…”