Judge in Meta case warns AI could 'obliterate' market for original works

CNA

01-05-2025

A skeptical federal judge in San Francisco on Thursday questioned Meta Platforms' argument that it can legally use copyrighted works without permission to train its artificial intelligence models.
In the first court hearing on a key question for the AI industry, U.S. District Judge Vince Chhabria grilled lawyers for both sides over Meta's request for a ruling that it made "fair use" of books by Junot Diaz, comedian Sarah Silverman and others to train its Llama large language model.
"You have companies using copyright-protected material to create a product that is capable of producing an infinite number of competing products," Chhabria told Meta's attorneys. "You are dramatically changing, you might even say obliterating, the market for that person's work, and you're saying that you don't even have to pay a license to that person."
"I just don't understand how that can be fair use," Chhabria said.
The fair use question hangs over lawsuits brought by authors, news outlets and other copyright owners against companies including Meta, OpenAI and Anthropic. The legal doctrine allows for the use of copyrighted work without the copyright owner's permission under some circumstances.
The authors in the Meta case sued in 2023, arguing the company used pirated versions of their books to train Llama without permission or compensation.
Technology companies have said that being forced to pay copyright holders for their content could hamstring the burgeoning, multi-billion dollar AI industry. The defendants say their AI systems make fair use of copyrighted material by studying it to learn to create new, transformative content.
Plaintiffs counter that AI companies unlawfully copy their work to generate competing content that threatens their livelihoods.
Chhabria on Thursday acknowledged that Meta's use may have been transformative, but said it still may not have been fair.
"This seems like a highly unusual case in the sense that though the copying is for a highly transformative purpose, the copying has the high likelihood of leading to the flooding of the markets for the copyrighted works," Chhabria said.
Meta attorney Kannon Shanmugam said copyright owners are not entitled to "protection from competition in the marketplace of ideas."
"But if I'm going to steal things from the marketplace of ideas in order to develop my own ideas, that's copyright infringement, right?," Chhabria responded.
Chhabria also told the plaintiffs' attorney David Boies that the lawsuit may not have adequately addressed the potential market impacts of Meta's conduct.
"I think it is taken away by fair use unless a plaintiff can show that the market for their actual copyrighted work is going to be dramatically affected," Chhabria said.
Chhabria prodded Boies for evidence that Llama's creations would affect the market for the authors' books specifically.
"It seems like you're asking me to speculate that the market for Sarah Silverman's memoir will be affected by the billions of things that Llama will ultimately be capable of producing," Chhabria said. "And it's just not obvious to me that that's the case."