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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Global | Publication | August 2024
The case of Robert Kneschke v. LAION e.V. marks a significant milestone in the legal landscape concerning the use of copyright works for AI training.
As the first of its kind in Germany, the outcome of the case has the potential to reshape the intersection of AI development and copyright law, setting a precedent with broad implications for the AI industry and intellectual property protection.
With many stakeholders tracking the case closely, the decision in the case could influence similar legal battles across Europe and beyond.
Robert Kneschke, a seasoned German photographer, has initiated legal proceedings against LAION e.V. (“Large-scale Artificial Intelligence Open Network”), a non-profit organisation known for creating vast datasets used in AI training.
Kneschke claims that LAION included his photographic images in their "LAION 5B" dataset without his consent. This dataset has been instrumental in training popular AI models like Stable Diffusion. The lawsuit, filed on 27 April 2023 in the Hamburg Regional Court, challenges the legality of using copyright works in this manner and demands the removal of his images from the dataset.
The German Copyright Act, updated by the EU Directive on Copyright in the Digital Single Market in 2021, introduced provisions for text and data mining, allowing such activities for commercial purposes under specific conditions. LAION argues that their use of metadata, text data, and URLs falls within these exceptions. However, the court's decision could redefine how AI companies handle copyright material, potentially necessitating new licences and compensation models.
The first hearing on 11 July 2024 highlighted the complexities of the case. The court meticulously examined the legalities surrounding text and data mining rights, historical context, and the newly enacted EU AI Act (see our blog, The EU AI Act – the countdown begins).
Critical issues discussed included:
The Kneschke v. LAION case:
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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Artificial intelligence (AI) raises many intellectual property (IP) issues.
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