Active inducement claims
The Supreme Court’s decision in MGM Studios, Inc. v. Grokster, Ltd., attempted to draw a line between (i) developing a new technology and (ii) trying to actively induce others to commit copyright infringement using the technology.
The Court held: “that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”
And the Court found evidence of clear expression in the defendants’ attempt to capture Napster’s users, through internal emails within the startups and their advertisements. Given that evidence, the Court also took into account the failure of the startups to attempt to filter infringing files. But the Court also cautioned the lack of filtering wouldn’t be considered without other evidence of intent: “in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the Sony safe harbor.”
Judge Orrick’s order re active inducement
This week, Judge Orrick’s order denying in part the motion to dismiss Sarah Andersen’s proposed class action against the companies providing AI generators Stability AI, DeviantArt, Midjourney, and Runway gave life to the active inducement claim, at least for now, in addition to the other theories of copyright infringement.
What about the other ai lawsuits?
And, now, the plaintiffs in the Southern District of New York cases brought by The New York Times and Daily News have cited Judge Orrick’s decision as supporting their theories of active inducement as well.
Here’s what the New York Times argues:
One thing that Judge Orrick’s opinion mentions, however, is the alleged statements of Stability AI CEO Mostaque about the “compressed copies” of works in its AI model.
Judge Orrick found a plausible claim of active inducement based on the entirety of allegations: “Instead, this is a case where plaintiffs allege that Stable Diffusion is built to a significant extent on copyrighted works and that the way the product operates necessarily invokes copies or protected elements of those works. The plausible inferences at this juncture are that Stable Diffusion by operation by end users creates copyright infringement and was created to facilitate that infringement by design. In addition to the comment of Stability’s CEO, plaintiffs reference articles by academics and others that training images can sometimes be reproduced as outputs from the AI products. FAC ¶¶ 90, 130-139.”
Absent such statements by the CEO of an AI company or some other evidence of intent, it is debatable–and I think doubtful under Grokster—whether the design of a technology with substantial noninfringing uses can, in itself, support a claim of active inducement. As the Supreme said, the plaintiff needs to show”clear expression or other affirmative steps taken to foster infringement.”