In a groundbreaking decision, a Chinese court has ruled on a case involving copyright infringement by an AI generated service, marking the first effective ruling of its kind globally. This ruling provides a crucial legal precedent for addressing the complex issue of whether content generated by AI service providers constitutes copyright infringement, according to reports from the 21st Century Business Herald on Monday.
The Guangzhou Internet Court concluded that an AI company had infringed on the plaintiff’s copyright and adaptation rights related to the Ultraman series during the provision of generative AI services, holding the company accountable for relevant civil liability.
At the center of the case was the iconic intellectual property, Ultraman. The plaintiff, who exclusively owned the copyright to the series images, discovered that the defendant’s AI-generated images closely resembled the plaintiff’s Ultraman artwork. Moreover, the defendant offered an AI drawing function as a member-exclusive service, charging additional fees for access.
The court determined that the defendant’s generated images not only partially or completely replicated the original artwork but also incorporated new features based on the original expression, thereby infringing on the plaintiff’s reproduction and adaptation rights.
Zhou Chengxiong, deputy director of the Consultation and Research Center for Strategic Issues at the Chinese Academy of Sciences, highlighted potential implications of the ruling. He expressed concerns that the heightened legal risks may deter some AI companies from investing further in development, potentially hindering technological innovation and widening the gap between China and other leading AI powers.
In addition to the ruling on copyright infringement, the court outlined the duty of care for providers of generative AI services. It emphasized the importance of these providers reminding users of potential copyright risks, establishing complaint reporting mechanisms for rights holders, and clearly labeling AI-generated content to prevent confusion or misidentification among the public.
Recognizing the nascent stage of the generative AI industry, the Guangzhou Internet Court emphasized the need to strike a balance between rights protection and industry development. It called for service providers to fulfill reasonable and affordable duty of care while contributing to the establishment of an AI governance system that promotes security, development, innovation, and protection.
Ultimately, the court ordered the defendant to compensate the plaintiff for economic losses amounting to 10,000 yuan ($1,389). This ruling follows a similar decision by the Beijing Internet Court in November 2023, further solidifying China’s stance on the protection of intellectual property rights in the era of AI technology.
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