Return to Answer

AI-generated content comparable to Midjourney or ChatGPT in their current dramatically new versions is only a year or two old so far. At this point, we have opinion letters and policy statements from the U.S. Copyright Registrar's office, and a handful of trial court order and/or rulings on requests for preliminary injunctions pending appeals. There is a solid argument that these AI engines are different in kind in legally relevant ways from earlier automated technologies like motion activated cameras, or cameras on timers, or cameras operated by monkeys or other animals.

For example, it is usually legal to print copies of an out of copyright book, sell it to consumers at a profit, and enter into non-competition agreements with firms that are distributing that book that prohibits them from printing their own copies of the same out of copyright book and selling it to their buyers at a price lower than your product's price. The justification for a non-competition clause like this isn't that you own the rights to the out of copyright book. Instead, it is the business justification that someone you are hiring to do something for you (i.e. distributing the book) shouldn't also be competing with you in the same line of business that you are hiring them to do work for you in. You shouldn't have to be subsidizing your very own competition by given them profits from your business dealing with them.

There are times when licensing restrictions can go to far and raise anti-trust concerns.

But these kinds of restrictions are the exception and not the law and implicated legal doctrines far afield from the contract and copyright oriented issues raised in the question.

AI-generated content comparable to Midjourney or ChatGPT in their current dramatically new versions is only a year or two old so far. At this point, we have opinion letters and policy statements from the U.S. Copyright Registrar's office, and a handful of trial court orders, and perhaps one or two rulings on requests for preliminary injunctions pending appeals.

But, there is still a legitimate argument that these AI engines are different in kind in legally relevant ways from earlier automated technologies like motion activated cameras, or cameras on timers, or cameras operated by monkeys or other animals. This argument has not yet been definitively foreclosed by existing law.

For example, it is usually legal to print copies of an out of copyright book, sell it to consumers at a profit, and enter into non-competition agreements with firms that are distributing that book that prohibits them from printing their own copies of the same out of copyright book and selling it to their buyers at a price lower than your product's price. The justification for a non-competition clause like this isn't that you own the rights to the out of copyright book. Instead, it is the business justification that someone you are hiring to do something for you (i.e. distributing the book) shouldn't also be competing with you in the same line of business that you are hiring them to do work for you in. You shouldn't have to be subsidizing your very own competition by giving them profits from your business dealings with them.

There are times when licensing restrictions can go too far and raise anti-trust concerns.

But these kinds of restrictions are the exception and not the rule. This kind of analysis also implicates legal doctrines far afield from the contract and copyright oriented issues raised in the question.

AI-generated content comparable to Midjourney or ChatGPT in their current dramatically new versions is only a year or two old so far. At this point, we have opinion letters and police statements from the U.S. Copyright Registrar's office, and a handful of trial court order and/or rulings on requests for preliminary injunctions pending appeals. There is a solid argument that these AI engines are different in kind in legally relevant ways from earlier automated technologies like motion activated cameras, or cameras on timers, or cameras operated by monkeys or other animals.

So, the fact that there are provisions about licensing in an agreement isn't inherently unlawful even if the underlying material isn't actually protected by copyright as the ToS implicitly and explicitly assumes.

AI-generated content comparable to Midjourney or ChatGPT in their current dramatically new versions is only a year or two old so far. At this point, we have opinion letters and policy statements from the U.S. Copyright Registrar's office, and a handful of trial court order and/or rulings on requests for preliminary injunctions pending appeals. There is a solid argument that these AI engines are different in kind in legally relevant ways from earlier automated technologies like motion activated cameras, or cameras on timers, or cameras operated by monkeys or other animals.

So, the fact that there are provisions about licensing in an agreement isn't inherently unlawful even if the underlying material isn't actually protected by copyright as the ToS implicitly and explicitly assumes.

There are times when licensing restrictions can go to far and raise anti-trust concerns.

For example, there is a duty in some cases to license legally protected intellectual property that is necessary for any other firm to participate in an industry like, e.g., cell phones, on an equitable basis under anti-trust law in some cases, so that the IP dependent industry doesn't become a natural monopoly, and so that the IP owner gets paid but doesn't pick winners or losers in the competitive marketplace for improper reasons.

But these kinds of restrictions are the exception and not the law and implicated legal doctrines far afield from the contract and copyright oriented issues raised in the question.

For example, it is perfectly legal to print copies of an out of copyright book, sell it to consumers at a profit, and enter into non-competition agreements with firms that are distributing that book that prohibits them from printing their own copies of the same out of copyright book and selling it to their buyers at a price lower than your product's price.

Similarly, it is perfectly legal to sell customer lists or other compilations of "sweat of the brow" data that is not protected by copyright law (e.g. conveniently packaged complete packages of U.S. government documents that are inconvenient to get directly from the agencies in question) in a contract with the buyer (the "first sale doctrine" limits somewhat what restrictions on use of the purchased item can be imposed on a buyer, but doesn't completely limit all contractual arrangements of this kind).

For example, it is usually legal to print copies of an out of copyright book, sell it to consumers at a profit, and enter into non-competition agreements with firms that are distributing that book that prohibits them from printing their own copies of the same out of copyright book and selling it to their buyers at a price lower than your product's price. The justification for a non-competition clause like this isn't that you own the rights to the out of copyright book. Instead, it is the business justification that someone you are hiring to do something for you (i.e. distributing the book) shouldn't also be competing with you in the same line of business that you are hiring them to do work for you in. You shouldn't have to be subsidizing your very own competition by given them profits from your business dealing with them.

Similarly, it is legal to sell customer lists or other compilations of "sweat of the brow" data that is not protected by copyright law (e.g. conveniently packaged complete packages of U.S. government documents that are inconvenient to get directly from the agencies in question) in a contract with the buyer (the "first sale doctrine" limits somewhat what restrictions on use of the purchased item can be imposed on a buyer, but doesn't completely limit all contractual arrangements of this kind).