Landmark court case: AI training vs. copyright

Introduction: A precedent with far-reaching consequences

The case of Robert Kneschke against LAION e.V. marks a milestone in the legal dispute over the use of copyrighted works for the training of AI systems. As the first case of its kind in Germany, it could have far-reaching consequences for the AI industry and the protection of intellectual property. The trial raises fundamental questions about the compatibility of technological progress and copyright in the digital age and could set the tone for similar cases across Europe. Many stakeholders and observers are following this case closely as it could have a significant impact on the way AI models are developed and trained in the future. The German Fotorat has already commented positively on this move and sees it as an important signal to creators who currently have no opportunity to have a say in the development of AI tools or to participate in the success of the generators that have been created with the help of their work.

Background to the case: The plaintiff and the defendant

Robert Kneschke, a renowned German photographer with almost two decades of experience, has sued the non-profit organization LAION e.V. (Large-scale Artificial Intelligence Open Network). LAION is known for creating large data sets that are used for training AI models, including the “LAION 5B” data set with 5.85 billion image-text pairs. Kneschke accuses LAION of using images of him in this dataset without his consent. The dataset serves as the basis for training various AI image generators, including the well-known Stable Diffusion. The case is particularly explosive as it represents the first legal dispute of its kind in Germany and could potentially have far-reaching implications for AI development and the handling of copyrights. The lawsuit was filed with the Hamburg Regional Court on April 27, 2023, after LAION refused to remove the data records in question from the database.

Kneschke, who is based in Berlin, is an image producer specializing in colourful, cheerful and positive images and offers illustrations, 3D renderings and AI-generated images in addition to photos. His works are available on Adobe Stock, among others, where he is listed as a professional provider. The photographer also runs a blog called “Everyday life of a photo producer”, in which he provides insights into his work and the industry.LAION, on the other hand, presents itself as a non-profit organization that provides data sets, tools and models to promote research in the field of machine learning. The association emphasizes that it supports open public education and a greener use of resources through the reuse of existing datasets and models. The LAION-5B dataset at the center of the lawsuit was provided by LAION as an open source resource for the research community.

The lawsuit raises fundamental questions about the use of copyrighted works in the context of AI training. It is not only about the rights of individual artists, but also about the future of AI development and the ethical implications of using large amounts of data without the explicit consent of the authors. The outcome of this case could set the tone for the entire AI industry and potentially lead to new legal regulations or industry standards.

Key questions and course of the first oral hearing

The first hearing at the Hamburg Regional Court on July 11, 2024 revealed the complexity of the Kneschke v. LAION case. The court was well prepared and went into the legal aspects in detail, in particular the privileges for text and data mining and their historical background. The EU AI Act, which was adopted by the European Parliament on March 13, 2024 and entered into force in June 2024, was also taken into account. Although the AI Act was not yet in force at the time the lawsuit was filed, it was considered relevant to future aspects of the case, particularly with regard to the regulation of AI systems and training datasets.

The main points of discussion were:

1. the applicability of copyright exceptions for scientific research to LAION: The judges critically questioned the extent to which LAION actually conducts independent research or whether the cooperation with commercial partners such as Stability AI calls into question the character of non-profit status.

2. the legality of using copyrighted images for AI training without the consent of the authors: The court showed particular interest in the technical details of the training process and the exact use of the images. There was intensive discussion as to whether training an AI model with copyrighted works should be considered a reproduction within the meaning of copyright law.

3. possibilities for authors to have their works removed from AI training data: The judges specifically asked about the technical and practical feasibility of such an opt-out process and the associated challenges. The question of the possibility and reasonableness of a subsequent removal of data from already trained models was also raised.

4. potential remuneration models for authors: The court showed great interest in possible remuneration models and requested concrete proposals from both parties. The practical feasibility of fair remuneration in view of the enormous amounts of data used to train AI models was also discussed.

5 The international dimension of the case: The court discussed the potential impact of a decision on the international technology market and the competitiveness of German and European companies. The question was also raised as to what extent a national decision can be effective at all in such a complex and global subject area.

6 Ethical implications: The judges were interested in the potential societal implications of their decision and asked about the long-term consequences for creativity, innovation and the protection of intellectual property in an increasingly AI-driven world.

Specific aspects that were discussed were:

– The disputed image is a watermarked stock photo that was captured by LAION with a watermark.
– The question was raised as to whether an exclusion in the terms of use of a website is sufficient to prohibit use or whether technical measures such as robots.txt are required.
– The AI Act was mentioned as potentially relevant for future opt-out mechanisms, as it requires companies to use state-of-the-art methods to recognize opt-out declarations.

Overall, it became clear that the existing EU legislation may not be sufficient to adequately address the current challenges in the field of generative AI. The court recognized the scope of the case and was aware that it was a precedent with potentially far-reaching implications, which must also be considered in the context of new EU legislation.

The court announced that it will decide on September 27, 2024 whether a verdict will be reached or whether a further hearing is necessary. Until then, the parties have time to present further arguments and address the issues raised in the first hearing.

Legal foundations and possible effects: A turning point for AI and copyright law

The German Copyright Act was amended on June 7, 2021 by the implementation of the Copyright Directive (DSM Directive) and introduced important innovations for text and data mining. § Section 44b UrhG now also permits text and data mining for commercial purposes, defined as the automated analysis of digital works to obtain information. However, rights holders can prohibit the use of their publicly accessible works in accordance with Section 44b (3) UrhG. LAION relies on these exceptions and argues that its data sets only contain metadata, text data and URLs, but not the image data itself.

The outcome of the Kneschke v. LAION case could have far-reaching consequences for the AI industry and authors. It could clarify how AI companies will have to deal with copyrighted material in the future, whether licenses are required and what possible remuneration could look like. This could trigger the development of new legal frameworks for AI and copyright.

Conclusion

The Kneschke v. LAION case is at the interface between technological innovation and the protection of intellectual property. It illustrates the challenges that the AI age poses for existing copyright law. The court’s decision will potentially point the way for the future handling of copyright-protected works in AI training data.

Regardless of the outcome, this case is likely to serve as a precedent and could pave the way for similar lawsuits in Germany and Europe. It underlines the urgent need to adapt copyright law to the challenges of the AI age and to find a balanced approach that both promotes innovation and protects the rights of creators.

The complexity of the case shows that an interdisciplinary approach is required that takes legal, technical and ethical aspects into account. It is clear that legislation must keep pace with the rapid pace of technological development in order to create a clear framework for the use of AI and the protection of intellectual property.

Ultimately, this case could make an important contribution to shaping the digital future by helping to develop a fair and innovation-friendly legal framework for the AI era.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.