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Judge Bibas issues 1st ruling on how fair use applies in AI training, after Andy Warhol Foundation decision

Judge Stephanos Bibas, who is sitting by designation in the District of Delaware, issued the first ruling of a federal court that explains how fair use applies to AI training after the Supreme Court’s decision in Andy Warhol Foundation v. Goldsmith. The case involves Ross’s training of AI allegedly based on copies of Westlaw headnotes. Ultimately, Judge Bibas denied summary judgment and ruled the case should proceed to trial.

1. How should courts interpret the Supreme Court’s decisions in Andy Warhol Foundation v. goldsmith, and google v. Oracle

Judge Bibas cautioned against “overreading” the Supreme Court’s recent fair use decision in Andy Warhol Foundation, in which the Court limited the weight to give a defendant’s transformative purpose if it is commercial and substantially similar in purpose as the plaintiff’s work.

“Ross’s uses were undoubtedly commercial. And one of its goals was to compete with Westlaw. Thomson Reuters contends that this commercial use weighs heavily against finding fair use. In support of this, it cites the Supreme Court’s recent decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 143 S. Ct. 1258 (2023). There, the Court determined that the use in question was not fair largely by emphasizing its commercial nature. See id. at 1279–80. But I decline to overread one decision, especially because the Court recognized that “use’s transformativeness may outweigh its commercial character” and that in Warhol, “both elements point[ed] in the same direction.” Id. at 1280. Plus, just two terms ago, in a technological context much more like this one, the Court placed much more weight on transformation than commercialism. Google, 141 S. Ct. at 1204 (“[A] finding that copying was not commercial in nature tips the scales in favor of fair use. But the inverse is not necessarily true, as many common fair uses are indisputably commercial.”). So I focus on transformativeness.”

2. Transformative Intermediate copying to “stud[Y] the language patterns in the headnotes to learn how to produce judicial opinion quotes” and not to recreate westlaw’s drafting

Judge Bibas recognized a distinction between transformative intermediate copying to learn how to produce judicial opinion quotes versus copying to recreate Westlaw’s creative drafting:

“So whether the intermediate copying caselaw tells us that Ross’s use was transformative depends on the precise nature of Ross’s actions. It was transformative intermediate copying if Ross’s AI only studied the language patterns in the headnotes to learn how to produce judicial opinion quotes. But if Thomson Reuters is right that Ross used the untransformed text of headnotes to get its AI to replicate and reproduce the creative drafting done by Westlaw’s attorney-editors, then Ross’s comparisons to cases like Sega and Sony are not apt. Again, this is a material question of fact that the jury needs to decide.”

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