Which actors have potential liability for infringement?
Global | Publication | July 2024
A Deployer may be exposed to primary liability for copyright infringement as a result of the Output of a generative AI system infringing copyright and also secondary liability for possession of an infringing generative AI system which in itself is infringing or includes infringing content, in the course of business, provided that the Deployer has knowledge or reason to believe that the AI system is infringing or includes infringing content.
If the act of training the AI System is determined to be an infringement of copyright, who could have liability in relation to the act of training?
Australia
See the discussion of the Australian position in Infringement Risk Relating to Creation and Use of the Output of a generative AI System, in relation to primary and secondary infringement.
The Provider, Deployer and User can all be held liable depending on the circumstances. Joint tortfeasor actions are not typically commenced for copyright infringement in Australia.
Canada
The person who carried out the training would be most likely to be liable for the infringement. However, any entity that reproduces all or a substantial part of an original work without the copyright owner’s authorization or the availability of a statutory exception is liable for infringement.
The Deployer/User who has the Output of the generative AI system may also be found liable for infringement, depending on what they do with the Output (for example, reproducing or performing the process to get the Output may make them liable too).
China
The Deployer/User who created the Output using the generative AI system would most likely be liable for the infringement.
While (as at the date of publication) there are no regulations or rules specifically addressing the issue, Article 9 of the Interim Measures for the Management of Generative Artificial Intelligence Services provides that the generative AI service provider shall assume responsibility as a producer of network information contents in accordance with the law.
As the Measures have just become effective, it remains to be seen how the rules actually apply in practice.
France
The person who carried out the training would most likely be liable for the infringement.
Where the training is done by the Deployer (as in Private or on-premises deployments), the Provider might also have liability, depending on the circumstances (this being most likely where the Provider hosts and retains control of the system).
Germany
Infringement requires not only temporary reproduction of a copyright work in the training process, but the person initiating and executing the reproduction (carrying out the training) would be held liable for any infringements in relation to the act of training.
Hong Kong
The Hong Kong law on this would follow very closely the UK law position, on which the Hong Kong equivalent laws are based. There is no specific Hong Kong case law as at the date of publication.
The Netherlands
Processing copyright material as training data could constitute copyright infringement, if structural and non-temporary reproductions of copyright (digital) works are recorded in this process and subject to the application of the exceptions under the Dutch Copyright Act relating to 'temporary reproduction' and TDM as well as the more general overarching principle that an exception should not detract from normal exploitation of the works or unreasonably prejudice the legitimate rights of rightholders.
The question of who would be liable will depend on who actually reproduces, copies or discloses the copyright work. This is most likely to be the person who carries out the training.
Singapore
The Courts in Singapore will likely adopt the same position on liability as in the UK.
South Africa
The Copyright Act 1978 gives the right to certain exclusive acts to the copyright owner. These exclusive acts include the right to reproduce the work in any manner or form or even to reproduce an adaptation of the work.
The actions of the person training the AI system with Input in a way that constitutes a substantial reproduction or adaptation of a work in which copyright subsists would constitute copyright infringement.
Any other person involved in the training would potentially be liable for such infringement. If a person causes another to commit copyright infringement, that person is liable for the infringement as well. Therefore, the employer of the trainer could also potentially be liable for copyright infringement.
UK
The person who carried out the training would be most likely to be liable for the infringement.
Where the training is done by the Deployer (for example, in Private or on-premises deployments), the Provider might also have liability depending on the circumstances (this being most likely where the Provider hosts and retains control of the system).
USA
Same as the UK.
If the act of training the AI System is determined to be an infringement of copyright, could the Deployer be considered to infringe copyright merely by virtue of possessing the AI that is able to reproduce a copyright work?
Australia
The Copyright Act 1968 contemplates what is referred to as ‘indirect’ infringement, where the infringer does not actually commit an infringing act, but knowingly imports, sells, or has commercial dealings with infringing material, or permits a place of public entertainment to be used for the infringing performance of a work.1
It is hard to envisage a court reading mere possession of an item that can produce copyright-infringing material into the Copyright Act 1968, especially considering that generative AI does not always output infringing material and that there are many everyday articles that have potential to output infringing material.
Canada
In deployments where the Deployer does not itself possess or control a copy of the system, it is unlikely that merely using the system would give rise to liability for copyright infringement as use alone does not necessarily involve reproduction of all or a substantial part of the work.
A Deployer may face liability if it possesses or controls a copy of the system that was obtained without permission, or if has used the system to make additional copies of the copyright work at issue, or has acted in a way that violates any of the other exclusive rights granted to the copyright owner.
China
Merely possessing an infringing copy would not constitute a copyright infringement.
However, if the Deployer actively copies the infringing AI system by itself in order to possess it and/or use the infringing copy in commercial business, such activity may constitute an infringement.
If the Deployer does not know and has no reasonable grounds to know that the system is an infringing copy, it may not be liable for damages for copyright infringement, but it will have to stop using and destroy the infringing copy once it becomes aware of the infringement.
France
Merely possessing an AI system that is capable of reproducing copyright works is not likely, in itself, to constitute copyright infringement.
Infringement would generally require an act that violates one of the exclusive rights of the copyright holder, such as unauthorized reproduction, distribution, or public performance of the copyright work (Article L122-4 French Intellectual Property Code).
Germany
Mere possession of an AI that is able to reproduce a copyright work does not constitute any infringement by the Deployer.
Hong Kong
The Hong Kong law on this would follow very closely the UK law position on which the Hong Kong equivalent laws are based. There is no specific Hong Kong case law as at the date of publication.
The Netherlands
Mere possession of an AI that is able to reproduce a copyright work does not constitute any infringement by the Deployer.
Singapore
If the Deployer makes, deals in, imports, distributes or offers to the public or provides a service for a device (which can include a generative AI system), this may amount to an infringement of copyright under Section 150 of the Copyright Act 2021 if the Deployer: (i) knows or ought reasonably to have known that the AI system is capable of facilitating access to works communicated to the public without the authority of the copyright owners; and (ii) has only a limited commercially significant purpose or use other than that capability.
Knowledge of the Deployer is a key element in establishing liability under this provision, and any claimant is likely to have to prove that the Deployer knows that the AI system operates by accessing copyright works in a manner that infringes the copyright (although this has yet to be tested in the Singapore courts).
South Africa
No, in order for the requirements of indirect infringement to take place, the Deployer would need to actually utilize, or cause someone to utilize, the AI System to generate a work that infringes the rights of another.
The Deployer would also have to have knowledge that the generated work infringes the rights of another in order to commit copyright infringement.
UK
In deployments where the Deployer does not itself possess or control a copy of the system, it is unlikely that merely having the right to use the system would give rise to liability for copyright infringement.
If, however, the Deployer possesses a copy of the system, Section 23 of the Copright, Designs and Patents Act 1988 (CDPA) may apply:
- Under Section 23 of the CDPA, it is an infringement to possess in the course of business an article which is, and which the person knows or has reason to believe is, an infringing copy of a copyright work.
- If the AI system is itself held to be an infringing copy of a copyright work, the Deployer may be liable under Section 23 for merely possessing the AI system before the Output is even considered provided it has the requisite knowledge/belief.
- However, the knowledge requirement means that the Deployer needs to have knowledge of an actual work that is being copied – it is not sufficient to suspect or know that the AI system is capable of being used to produce copies.
The UK courts will consider this issue in the Getty Images v Stability AI case. In its current proceedings against Stability AI Limited, Getty Images claims that a copy of Stability Diffusion is in itself an infringing copy of Getty Images’ works and that Stability AI is therefore in breach of Section 23 of the CDPA.
USA
In deployments where the Deployer does not itself possess or control a copy of the system, it is unlikely that merely having the right to use the system would give rise to liability for copyright infringement.
A Deployer may face liability if it possesses or controls a copy of the system, or if has used the system to make additional copies of the copyright work at issue, or has acted in a way that violates any of the other exclusive rights granted to the copyright owner.
If the Output of the AI System is determined to be an infringement of copyright, who could have liability?
Australia
It will depend on the circumstances. See the discussion of the Australian position in Infringement Risk Relating to Creation and Use of the Output of a Generative AI System, in relation to primary and secondary infringement.
Canada
The Provider and/or the Deployer may have liability for infringement, depending on the circumstances and whether there is reproduction of all or a substantial part of the original work. A User may also have separate liability in relation to its use of the infringing Output, such as, for example, if the users makes/distributes copies of the Output.
China
The Deployer/User who created the Output using the generative AI system would most likely be liable for the infringement.
The courts regard AI as a tool. For example, the Guangdong Court in Tencent v. Shanghai Yinxun Technology Ltd.:2
- Took the view that an article produced by AI reflects the need and intention of the plaintiff using the AI, and the plaintiff will accordingly bear the responsibility for the published article.
- Held that the work in question was created by an AI system and was a literary work protected under copyright law. The plaintiff, Tencent, as a legal entity was found to be the author of the work due to their supervision and organization of its creation.
Accordingly, once the Output is determined to be an infringement of copyright, the Deployer and/or the User, who may be deemed to be the creator of the work, may then be liable for the infringement.
France
The position is the same as the UK and the Netherlands. However, French law and case law do not provide for the same concepts of primary and secondary liability.
Germany
It depends on who is reproducing the adapted work. In most cases, this will be the User who enters the Prompts and thus initiates the reproduction (whether the adaptation of a work is a reproduction and therefore an infringement depends on the recognizability of the adapted work in the output).
A Deployer may be liable in addition to the User if the Deployer has influenced the Output to such an extent that the Deployer is a co-author of the Output.
A Provider may also be liable for a User’s infringement if the User is an employee of the Provider. (Under Section 99 of the German Copyright Act, if an employee or agent of a company has unlawfully infringed copyright, the injured party also has a claim against the owner of the company.)
Hong Kong
The Hong Kong law on this would follow very closely the UK law position on which the Hong Kong equivalent laws are based. There is no specific Hong Kong case law as at the date of publication.
The Netherlands
The position is the same as the UK. The User’s potential liability may arise from communication to the public and/or reproduction.
Singapore
The position in Singapore will likely be similar to the UK position, as Singapore law also recognizes the concepts of primary and secondary liability for infringement.
Depending on the circumstances, the Provider may be liable for secondary infringement even if it was not directly involved in the primary act of copyright infringement (for example, the training of the generative AI system using copyright works, or the use of infringing Output) if they knew or ought reasonably to have known that they would be facilitating the copyright infringement.
South Africa
South African law provides for direct and indirect copyright infringement:
- The person using the Input to train the AI System would be liable for copyright infringement.
- The Developer would potentially be liable in that copyright infringement takes place when someone does or causes anyone else to do any of the acts which are the exclusive right of the copyright owner.
- The Deployer could potentially be liable where it causes a User to generate an Output, which to its knowledge is an infringing copy.
- The User could potentially be liable for indirect infringement on the basis that the User is dealing with infringing copies where it is not unauthorized to do so.
UK
The Provider and/or the Deployer may have primary and/or secondary liability for infringement, depending on the circumstances. However, a User may also have separate liability in relation to its use of the infringing Output.
USA
Same as the UK.
What are the civil remedies3 for copyright infringement? What are other possible consequences for the User?
Assuming that the Output is held to infringe copyright, various remedies are potentially available to the copyright owner against the Provider of the generative AI system that used the copyright work as Input, the Deployer/User who created the Output using the generative AI system/Prompts that infringe third-party copyright and the Deployer who is in possession of an infringing generative AI system/an AI system that includes infringing content.
Australia
Interlocutory injunctions: A court may make interlocutory orders before the case has been finalized if the court is satisfied that there is a serious issue to be tried that has a real prospect of success, that the applicant is likely to suffer if injury for which damages will not be an adequate remedy and that the balance of convenience favors granting an injunction. Injunctions may be issued to prevent further damage, obtain evidence or preserve the status quo.
Final injunctions: May be issued to prevent the infringer from continuing to infringe.
Damages: May be awarded to compensate for the infringement. Courts often award additional damages if the infringement has been flagrant.
Account of profits: May be awarded where the infringer has profited from the works. The copyright owner cannot receive damages and an account of profits and must choose between the remedies.
Delivery up: Of the infringing articles may be ordered, or devices used to make infringing articles.
Canada
If a court finds that copyright was infringed, the copyright owner can be compensated in several ways, including:4
- Statutory damages (based on an amount set by Copyright Act).
- Commercial purposes: $500 - $20,000/work.
- Non-commercial purposes: $100 - $5,000 (in total).
- Actual damages (calculated based on the harm).
- An injunction (a special court order to, for example, stop infringers from using the infringing work).
- Accounting of profits (prevents unjustified enrichment of the infringer).
- Delivery up and destruction of the infringing goods.
China
Injunctions: Usually a court would grant a permanent injunction. Preliminary and interim injunctions are also available in urgent and necessary circumstances at the discretion of the court. To apply for the preliminary and interim injunction, the petitioner must prove that:
- Infringement has taken place.
- There will be irreparable damage if no injunction is granted.
- The balance of convenience favors the petitioner.
- No public interest would be harmed if an injunction is granted.
Damages: The damages awarded will be calculated in the following orders:
- Actual loss suffered by the rights holder or the illegal profits obtained by the infringer.
- The amount based on royalties for licensing such right.
- Statutory damages between CNY 500 and CNY 5 million.
- The court may grant an award of part of the attorney fees, but not all.
The amended Chinese Copyright Law introduced punitive damage for malicious infringement, which will be one to five times the damages granted.
Mitigation in relation to pirated software: A holder of a software copy who is unaware and also has no reasonable grounds for knowing that the software is a pirated copy is not liable to pay compensation. But the use of the pirated copy must cease and the pirated copy must be destroyed.
France
Collecting proofs of the infringement: The best option being to proceed with the assistance of a bailiff who will draw up a report.
Seizure of the counterfeit works: With the authorization of a judge (‘saisie-contrefaçon’).
Summary proceedings: To obtain a cessation order.
Civil lawsuit: The copyright holder can file a civil lawsuit against the infringer (it must already have every element to prove the infringement and the damages suffered).
Damages: Besides issuing an injunction to stop the infringement, if a court issues a decision in favor of the copyright holder, it may award damages to compensate for the loss suffered due to the infringement.
Delivery up: Of the infringing works may be ordered, and/or destuctionof any infringing articles or devices used to make infringing works.
Germany
Under German copyright law, the following remedies for copyright infringements are provided:
- Injunction (Section 97 (1) German Copyright Act), but only after prior warning (Section 97a German Copyright Act).
- Compensation for damages (Section 97 (2) German Copyright Act), by choice of the creator:
- Restitution of the actual damages suffered by the author.
- Surrender of the winnings made by the infringer.
- Or damages may be calculated on the basis of the amount that the infringer would have had to pay as reasonable remuneration.
- Information: Any person who unlawfully infringes copyright on a commercial scale may be required to provide immediate information as to the origin and the distribution channel of the infringing copies or other products.
The creator is entitled to require the infringer to:
- Destroy all reproductions of the work in his possession (or, instead, the creator is entitled to have the infringer surrender any reproductions of the work still in the infringer’s possession); and
- Recall back any reproductions of the work that has already been commercially distributed.
Hong Kong
The Hong Kong law on this would follow very closely the UK law position on which the Hong Kong equivalent laws are based. There is no specific Hong Kong case law as at the date of publication.
The Netherlands
The following remedies are available for copyright infringement:
- Injunction.
- Declaration of infringement and/or validity.
- Monetary remedies (surrender of profits or compensation for damages).
- Surrender or destruction of the infringing goods.
- Rectification (for instance, through the publication of a summary of the decision on the infringer’s website).
- A recall of the infringing products.
- Disclosure of information regarding the infringement, including details of the supplier, creator, and resellers as well as financial information (sales and profit figures).
Singapore
A copyright owner can seek:
- Injunctive relief.
- Damages (damages are not available if the defendant did not know and could not reasonably have known that the offending act was infringing).
- An account of profits (but where damages are ordered, an account of profits is only available to the extent that the profits were not accounted for in computing the damages).
- Statutory damages which must not exceed S$10,000 for each individual work or performance that was infringed, and must not exceed S$200,000 in total, unless the claimant proves that its actual loss exceeds S$200,000.
- Orders for delivery up or disposal of the infringing material.
In deciding the amount of statutory damages to award, the court must consider all relevant matters, including:
- The flagrancy of the infringement.
- Any benefit gained by the infringer because of the infringement.
- The nature and purpose of the infringing act, including whether or not it is of a commercial nature.
- Whether the infringer acted in bad faith.
- Any loss that the claimant has suffered or is likely to suffer because of the infringement.
- The conduct of the parties before and during the proceedings.
- The need to deter similar infringements in the future.
If a defendant is sued in the Singapore courts for copyright infringement and found to be liable, the defendant may also be ordered to pay the plaintiff’s legal costs, which may be substantial.
South Africa
- Damages or royalities in lieu of damages. Additonal damages are also available if the infringement is “flagrant.”
- Interdict.
- Delivering of infringing copies or plates used or intended to be used for infringing copies.
UK
Interim injunctive relief to restrain infringement of copyright prior to final hearing taking place. The court must be satisfied that there is a serious question to be tried or a real prospect of success.
The court will consider the balance of convenience, for example, whether the inconvenience to the alleged infringing party (the defendant) outweighs the convenience to the copyright owner (the claimant) in deciding whether to grant interim relief.
Final injunctions following the full hearing to restrain infringement of copyright.
Damages or an account of profits (the copyright owner has to choose between a claim in damages or an account of the infringer’s profits). There are three categories of damages:
- Where the owner exploits its copyright by selling goods, the amount of damages will generally be calculated on the basis of the loss of profits caused to the copyright owner by the infringement.
- Where copyright is exploited by granting licencss in respect of the goods, the court will usually assess damages based on the royalty the infringer would have paid if it had obtained a license.
- In cases where it is not possible to show that there is a normal rate of profit, or a normal royalty rate, the owner must adduce evidence to guide the court on the appropriate measure of loss. In such cases, the royalty may in some cases be assessed on the basis of the notional license fee that would have been payable between a willing licensor and licensee.
Discretionary additional damages based on the flagrancy of the infringement; and any benefit accruing to the defendant by reason of the infringement may be awarded.
Mitigation: With regard to damages for copyright infringement under English law (assuming the Deployer was found to have infringed), if that infringer had taken no steps to determine whether the Output code contains elements of other proprietary code to the extent that the court would see this approach as flagrant, it may suffer additional damages. Taking reasonable steps by way of scanning (so that the Deployer had believed that the code was non-infringing) could assist in defending such claims for additional damages by way of flagrancy, for example.
Other remedies are possible, including an order for delivery up of an infringing article and a declaration that copyright subsists in a work and has been infringed.
USA
Injunctions: A copyright owner may seek a preliminary or permanent injunction to prevent or restrain future or ongoing copyright infringement.
Impoundment and destruction: A court may order the impounding of infringing goods at any time an action is pending and, if liability is established, may order the destruction or any other reasonable disposition of the infringing goods.
Damages: A copyright owner may choose to recover actual damages and profits of the infringer or statutory damages. Statutory damages can range between US$200 and US$150,000 per work infringed. Statutory damages are generally only available to copyright owners who have registered their copyrights prior to infringement.
Court costs and attorneys’ fees: A prevailing party may receive an award of reasonable attorneys’ fees at the discretion of the court.
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