AI and the Fair Use Doctrine

June 30, 2023
Sam Cook

In past years, copyright infringement of computer code has garnered serious attention in the nation’s courts. In 2021, the Supreme Court issued an opinion on the longstanding dispute between Google and Oracle, ruling that Google’s use of a portion of Oracle’s code qualified for protection under the fair use doctrine. More recently, several anonymous plaintiffs sued Microsoft, Github, and OpenAI for the unlicensed, uncredited use of their open-source code by Copilot, an artificial intelligence (AI) program.  

The question of whether an AI model can commit copyright infringement may take years to resolve. However, business owners need to know what the fair use doctrine is, how to avoid infringement, and when to take legal action.

What is the fair use doctrine?

The fair use doctrine is a federal statute that provides guidelines for determining whether someone other than the owner of copyrighted material is legally allowed to use that material. According to the statute, courts are to consider four factors when determining whether the use of copyrighted material should be protected as fair use, including:

1) the purpose and character of the new IP,  

2) the nature of the new IP,  

3) the amount and substantiality of the use of the copyrighted material, and  

4) any subsequent commercial impact.

These are the factors that Congress has given the courts to consider when determining fair usage.  

What is transformative use?

While not mentioned in the statute, an important part of how courts apply the fair use doctrine is “transformative use,” which falls under the first factor listed in the statute. For the use of copyrighted material to qualify as transformative, it must add new expression, meaning, or message. For example, sampling other peoples’ music without permission is protected under the fair use doctrine if it parodies the original meaning of the song or changes it in some other way. However, if you use another IP in a work of parody but do not demonstrably alter the expression, meaning, or message of the IP itself, you are committing infringement of copyright. Transformative use plays an important role in most fair use cases today, because “the more transformative, the less will be the significance of other factors.”

Transformative use and code

In 2021, the Supreme Court handed down a key ruling on how code can be transformative in Google LLC v. Oracle Am., Inc. The court determined that, even though Google used verbatim portions of Oracle’s API software, their use of the code qualified for fair use protection because it was used in a way that sufficiently transformed that code’s purpose by placing it in a new system and for a new purpose. In other words, transformative use has been applied broadly to code, allowing for large swathes of copyrighted material to be copied as long as they are applied in a novel way.

Transformative use and AI

But what about the lawsuit against Microsoft and its affiliates last November? The plaintiffs argue that Copilot’s use of their code violates their copyright, as it does not give credit to the writers of the code. They argue that this unauthorized use harms the writers of the code by taking their work, which is free to use, and putting it behind a paywall without their permission. Microsoft, Github, and OpenAI have responded by moving to dismiss the case outright, claiming that they are covered by transformative use doctrine.  

This begs the question: can an algorithm transform IP? There are many similarities between the way Google used Oracle’s code and the way that Copilot uses open-source code, but now the copyrighted code is being used by an AI, instead of a human programmer. The reasoning in Google LLC v. Oracle AM., Inc. relies heavily on the intent of Google’s programmers in using Oracle’s code for a new purpose. But can AI have intent? If so, how would that intent be demonstrated? These are questions that the courts will eventually need to decide, with tremendous implications for the future and fair use doctrine.


The fair use doctrine is an important part of intellectual property law that is subject to change in the near future, due to the rise of artificial intelligence. Here at Sumsion Business Law, we are committed to staying on top of current events to best serve your needs.  

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