The Guangzhou Internet Court recently decided a first instance decision involving the plaintiff Shanghai Xinchuanghua Cultural Development Co., Ltd. ("Xinchuanghua") and the defendant an AI Company regarding internet infringement (which has been changed to a copyright infringement dispute). The court ordered the AI company to compensate Xinchuanghua for economic losses of RMB 10,000 (USD1,400) (including reasonable expenses). This is the world's first effective judgment recognizing an AIGC platform infringes the copyright of others.
Tsuburaya Production Co., Ltd., the copyright owner of the "Ultraman" series of works, signed a "Certificate of Licensing" with Xinchuanghua, and exclusively authorize the copyright of the Ultraman series images to Xinchuanghua and granting Xinchuanghua the right to defend its rights. The defendant operates the Tab (pseudonym) website, which has AI conversation and AI-generated drawing functions. Xinchuanghua found that when the Tab website was asked to generate Ultraman-related pictures (such as inputting "generate an Ultraman Dyna"), Tab could generate Ultraman pictures that were substantially similar to the plaintiff's Ultraman image. Tab's AI painting function needs to be recharged to use. Xinchuanghua believed that the defendant's action had caused serious damage to it, so it sued the defendant to stop the infringement and claimed compensation of RMB 300,000.
The issues of the case are:
1. Whether the defendant infringed the Xinchuanghua's right of reproduction, adaptation and information network dissemination
The court held that the Ultraman works involved in the case enjoy a high reputation and can be accessed, queried and downloaded on major video websites. In the absence of contrary evidence by the defendant, there is a possibility that the defendant has access to the Ultraman works involved in the case. The pictures involved in the case provided by Xinchuanghua and generated by the Tab website partially or completely reproduced the original expression of the artistic image of "Ultraman" Therefore, the defendant copied the Ultraman work involved in the case without authorization, infringing Xinchuanghua's right to copy. In addition, some of the generated pictures involved in the case formed new features while retaining the original expression of the "Ultraman Tiga Composite" work. The defendant's action constituted an adaptation of the Ultraman work involved in the case, which infringed Xinchuanghu's right to adaptation of Ultraman.
Considering that this case is a new situation of infringement in the context of the development of generative artificial intelligence, and the court has supported Xinchuanghua's claim of infringement of reproduction rights and adaptation rights, the same alleged infringement has been included in the control scope of reproduction rights and adaptation rights, Xinchuanghua's claim that the defendant infringed the right to disseminate information through information networks will not be examined.
2. What civil liability should the defendant bear?
On the issue of stopping the infringement. The court held that the defendant, as a service provider, had infringed Xinchuanghua's copyright in the Ultraman works, and should bear the responsibility to stop the infringement, that is, to stop generating infringing pictures. The defendant should take measures to prevent its service from continuing to generate pictures that are substantially similar to the Ultraman works involved in the case. The prevention measures should be such that users normally use prompt words related to Ultraman will not generate pictures that are substantially similar to the Ultraman works involved in the case. As for Xinchuanghua's request that the defendant delete the Ultraman materials involved in the case from the training data, the defendant did not actually conduct model training, so the request is not supported.
On the issue of compensation for losses. The court held that the Tab website operated by the defendant did not establish a relevant complaint and reporting mechanism, lacked potential risk warnings to users, and did not clearly mark the products it provided. Therefore, the defendant, as an AIGC service provider, failed to fulfill its reasonable duty of care and has subjective fault, should bear the corresponding liability for compensation. After comprehensive consideration of factors such as the high market popularity of the Ultraman works involved in the case, the defendant's active adoption of technical preventive measures after responding to the lawsuit, which had a certain effect, the limited scope of the infringement, and the reasonable necessity of Xinchuanghua's cost to protect its rights, the court used its discretion and ordered the defendant to compensate Xinchuanghua for economic losses of RMB 10,000 (including reasonable expenses).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
