US judge: Art created solely by artificial intelligence cannot be copyrighted

Scenario: The XYZ Algorithm

Let's say you are a software developer working on an extensive library that deals with data processing. You come across a small, but particularly efficient algorithm developed by Company A, which they've shared on their blog. This algorithm, called the XYZ Algorithm, is explicitly mentioned to be freely usable but retains the copyright to Company A.

You decide to use this XYZ Algorithm as a component within your larger library. You integrate it as-is, without modifying the original code of the XYZ Algorithm.

Implications:

Rights on the XYZ Algorithm: Even though you've integrated the XYZ Algorithm into your library, Company A retains the copyright on that specific algorithm. If they've specified particular licensing terms or conditions for use (like attribution), you'd have to abide by them.

Rights on the Entire Library: The rest of your library, which you developed independently, remains your intellectual property. Company A's copyright doesn't extend to the whole library, just the specific portion that constitutes the XYZ Algorithm.

Distribution and Licensing: If you decide to distribute or sell your library:

You'd have to ensure you comply with any licensing terms or conditions attached to the XYZ Algorithm. For the parts of the library you own, you can choose any licensing model you like.

Just because Company A can stop you from commercializing your entire Library, does not mean they own rights to your entire Library.

EG. it's 1998 and the Pokemon Company licenses MadCatz (defunct) to create Pokemon themed N64 controllers. Such a license is limited to N64 controllers; let's say under the terms of the license, MadCatz can't turn around and make a Pokemon themed bag in the style of ugh, Rat Fink. MadCatz can't make N64 controllers, and the Pokemon Company knows this, and really doesn't want them botching up their brand with horrific art, too. Copyright protects brand.

Now legally speaking, I can put a depiction of pikachu on a powerpoint slide in a school report and call it 'fair use'. But the second I sell that art on a bag (regardless of whether I put the words Pokemon on it), I've violated copyright laws, because the purchaser of my bag has deprived our poor Pokemon company of potential income. Womp-womp. Dumb as it is for Nintendo to come after me (as they go after the makers of Pokemon rom hacks, et al), it makes some sense, depending on how I scale up.

Fast forward to 2026 and now we have GPT-8 (flip it sideways for infinity, as we have reached the Singularity by this time). Pokemon is old as the hills and is celebrating its 30th anniversary (Jesus!). I use an AI with the prompt "fat yellow thunder mouse", and it generates a "pikachu but better", uncannily like the iconic character (because it's the only yellow thunder mouse anyone ever draws) but cute in all the ways that our AI knows how to get to humans, and I decide to coin it in an NFT and put it up for sale. Let's say the Pokemon Company is particularly litigious in its old age and is a veritable Disney. Or hell, let's suppose Disney bought the Pokemon Company (and now Misty is a Disney princess, just like Leia).

Given that: I own the NFT (in the sense of your software library example), no-one owns the art (AI-generated), Pokemon owns the brand and the concept of a Pikachu, and this particular depiction is recognized to be pikachu "but kinda better", we live in one of these worlds:

1. Disney is owed money from the proceeds, and can request cease of production / legal remedy 2. It is not owed anything, as the art itself was generated from an AI.

Which makes more sense?

I agree, in that first instance and at first glance, clearly copying. There are plenty of incredible copy artists in China who fabricate like copies of fine art, who approximate the role of our AI here.

There might be something to be said later about the nature of what makes a work transformative and whether the use of an AI is sufficient for it, but setting that thought aside, let's slide the scale from the meatspace to the rasterized space.

For the second: our mockey mouse is the spitting image of mickey mouse. Maybe the lines are a breadth of a hair off the fine print from what was submitted to the USPTO. Maybe it is by all intents and purposes using the same line width for his outlines, etc, but due to some fluke with how AI works, Mockey has three buttons instead of two, or (incredibly) 5 fingers instead of 4. Or maybe Mockey is exactly better proportioned than the cartoon friend we know, appealing more to our gross human sensibilities, but some may still construe him to be Mickey Mouse from a distance.

That image can't be copyrighted (as an AI can't obtain a copyright). Disney can't claim that image as Mickey too, lest they claim every permutation of his characteristics possible, the territory of which is really large.

Still, it stands to reasonable, common law: if its the 90s, and I drew Mockey myself and put him on a bag and made enough money on it that Disney goes after me, it's a sensible outcome that Disney wins this in court, and its primary defense is that this likeness violates their copyright. Yet if an AI made this in 2023, suddenly there is a gray area, as I am selling a likeness that nobody owns (by virtue of a lack of personhood in its creation). I feel that's a bit odd, and something people may try to exploit with this ruling. At the same time, if we give that to Disney, what's the end of the scope of copyright?