The Guangzhou Internet Court has found the defendant liable for copyright infringement in the first copyright infringement ruling involving artificial intelligence–generated content (AIGC). As generative AI evolves, it is set to bring about transformative changes, but it also carries significant risks. Different jurisdictions share concerns about the protection of copyright during the AIGC process.
In this case, the plaintiff, Shanghai Xinchuanghua Culture
Development Co., Ltd., as the authorized licensee of Tsuburaya
Production Co., Ltd., holds the legitimate worldwide right to use
the globally renowned IP character, 
ULTRAMAN. The defendant operates a website
known as Tab, which specializes in providing AI-driven text and
image services, enabling registered users to input requests to
generate images.
The plaintiff alleged that the images generated by these prompts
bear a substantial resemblance to its copyrighted artwork for ULTRAMAN.
Copyright of its renowned IP character, ULTRAMAN. Moreover, the plaintiff alleged
that the defendant operated the Tab website to make illegal
profits. It demanded that the defendant cease all infringing
activities and claimed compensation of RMB 300,000 (about US
$41,420), as well as reimbursement for reasonable expenses.
The defendant contended that the images generated on its Tab platform were contingent upon the customer-provided prompts, which are beyond its capacity to control, but that, once aware of the plaintiff's concerns, it had taken measures, such as promptly disabling the relevant link and clearly communicating the importance of IP protection. These actions, the defendant argued, demonstrated good faith and proved that it had fulfilled its obligations diligently.
After a thorough examination of the case, the court's final judgment, which has now taken legal effect, carefully balances the interests of IP protection and the advancement of generative AI technology.
This case has shown that to mitigate risk of infringement in juridical practice, and to help AI users safeguard IP rights, it is quite crucial for AIGC providers to promptly fulfill the following obligations, namely:
Proactively cease infringement actions and remove implicated materials from the training database to stop infringement in a timely manner;
Conduct keyword filtering actions;
Provide prominent identification notices to prevent infringement; and
Improve complaint and reporting channels.
This article is published on: https://www.inta.org/perspectives/law-practice/china-guangzhou-court-makes-landmark-decision-on-aigc-copyright-infringement/
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