Introduction
On September 25, 2024 [3], the Hangzhou Internet Court issued a landmark ruling on copyright infringement involving a Chinese AI platform. This case is significant as it marks the first time an AI service in China has been held directly accountable for generating infringing content. The court’s decision highlights the responsibilities of AI platforms in monitoring and preventing unauthorized use of copyrighted material.
Description
On September 25, 2024 [3], the Hangzhou Internet Court delivered a landmark ruling regarding copyright infringement involving a Chinese AI platform that generated unauthorized content resembling the copyrighted “Ultraman” character. This case marked the first instance in China where an AI service was held directly accountable for infringing outputs [1]. The court found that the platform committed contributory copyright infringement by facilitating the creation of infringing images for commercial purposes, while dismissing claims of direct infringement and unfair competition. The platform was ordered to cease these activities and pay damages of RMB 30,000 (approximately USD 4,200) [2].
The case centered on an AI service utilizing Low-Rank Adaptation (LoRA) models [2], which allowed users to create images and train models [2]. The claimant [2], a character-licensing company [1], alleged that the platform infringed its copyrights and engaged in unfair competition by distributing infringing Ultraman LoRA models and images [2], seeking an injunction and RMB 300,000 (approximately USD 42,000) in damages [2].
The court emphasized the platform’s responsibility to exercise a reasonable duty of care [3], despite its argument that it merely acted as a network service provider integrating third-party open-source models without providing original training data or images [2]. The ruling underscored that the AI service violated new generative AI regulations by failing to prevent misuse and lacking adequate intellectual property complaint mechanisms [1]. As a commercial AI service provider [2], the platform had a duty to monitor user-generated content and implement effective complaint and reporting mechanisms to prevent the spread of infringing material.
The court noted the widespread recognition of the Ultraman series [2], making infringement easily identifiable [2], and highlighted the platform’s failure to adequately oversee user behavior [2]. The platform’s revenue model [2], which included user memberships and rewards for publishing training models [2], indicated that it benefited economically from the infringing activities [2]. Consequently [2] [3], the court concluded that the platform could not claim the “safe harbor” exemption [2], as it should have been aware of the copyright infringements and failed to take necessary preventive measures [2].
Additionally, the court clarified that data training activities could be considered reasonable use under specific conditions [3], underscoring the need to balance technological innovation with intellectual property rights [3]. This case reflects an emerging judicial doctrine in China that recognizes and enforces rights in AI-generated works [1], particularly when human creativity is involved [1], while also holding AI companies responsible for unauthorized reproductions [1]. As a result, AI platforms are urged to ensure the legality of data usage and adopt technical measures to mitigate the generation and distribution of infringing content [3]. The Hangzhou Intermediate People’s Court subsequently upheld the initial ruling, reinforcing the established legal framework for AI-generated content platforms.
Conclusion
This ruling has significant implications for AI platforms, emphasizing their responsibility to prevent copyright infringement and ensure compliance with intellectual property laws. It sets a precedent for holding AI services accountable for the content they generate and distribute, urging them to implement robust monitoring and complaint mechanisms. The decision also highlights the need to balance technological advancement with the protection of intellectual property rights, shaping the future legal landscape for AI-generated content in China.
References
[1] https://medium.com/@adnanmasood/intellectual-property-rights-and-ai-generated-content-issues-in-human-authorship-fair-use-8c7ec9d6fdc3
[2] https://www.jdsupra.com/legalnews/when-ai-and-copyright-clash-chinese-9901913/
[3] https://www.lexology.com/library/detail.aspx?g=9a34a38b-d979-47f8-9125-f7bc70e68523
