Germany: landmark court decision deals with AI training and copyright

Background

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.

Legal basis and implications

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.

Key Issues and the first hearing

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:

1. Applicability of copyright exceptions: the court scrutinised whether LAION's operations could be classified as independent research or if their collaborations with commercial entities, like Stability AI, compromised their non-profit status.
2. Legality of using copyright images for AI training: the judges examined the technicalities of AI training and whether it constitutes a reproduction under copyright law.
3. Opt-out mechanisms for authors: discussions focussed on the feasibility and practicality of allowing authors to exclude their works from AI training datasets.
4. Remuneration models for authors: the court explored potential models for compensating authors whose works are used in AI training.
5. International implications: the potential global impact of the case and the competitiveness of European AI companies were considered.
6. Ethical implications: the judges also pondered the broader societal consequences of their decision on creativity, innovation and intellectual property protection.

A turning point for AI and copyright law?

The Kneschke v. LAION case:

• Exemplifies the challenges at the nexus of technological advancement and copyright law in the AI era. The Hamburg Regional Court's decision, expected on 27 September 2024, will likely serve as a critical precedent, guiding the future use of copyright works in AI training.
• Underscores the urgent need for legal frameworks to balance innovation with the protection of creators' rights, ensuring a fair and sustainable digital future. As AI continues to evolve, so too must our legal and ethical standards, keeping pace with the rapid advancements in technology.