If I wrote and published an novelization of the new Avatar movie, I would absolutely be sued for copyright infringement, even though all the elements I used were, individually, uncopyrightable (e.g. character names, plot points). Every copyrightable thing is made up of smaller, uncopyrightable parts.
You can technically be sued for anything. Whether you win or lose is something different. What you’re describing is a trademark violation, not a copyright violation. Sure, Disney probably would sue for copyright infringement and a jury might be impressed by Disney’s expensive lawyers, but that’s not a strong argument.
To argue that it is not, the defendants would need to argue that the model is transformative fair use, not derivative. This might seem an easy claim. After all, an art generating program is very different from a picture, right?
They don’t have to argue that at all, actually. They only have to argue that the use of the works in training the model is fair use. The model itself doesn’t use the original works when generating a new image.
All four factors of fair use are on the side of the artists here.
The problem is that you’re weighing the result against the four factors, not the training, which is the only part where the original works are used.
- The nature of the use is commercial, and it is not transformative in the sense that it “adds something new, with a further purpose or different character, altering the first with new expression, meaning or message.”
The use isn’t all commercial. Stable Diffusion can be downloaded and run on your own computer for free. The result is absolutely transformative. It creates new images that no one has ever rendered before.
- The entire image is used in the production of the new work.
Except it’s not. The entire image is used in training the model and no part of any image is used in the production of the new work. The entire image would have to be present in the model and none of them are.
- The effect on the market is obviously bad for the copyrighted work.
Not necessarily. Some of the copyrighted works used in the training weren’t being sold, so the market effect would be negligible. But you also can’t reproduce the original works well from the models, so how would the market for that particular work be affected except through competition by different works? By that logic, nobody but certain movie studios can film action movies because other studios making action movies would affect the market for their films.
We also need to point out that this factor includes hypothetical derivative works. There’s no reason an artist couldn’t license their work for an ML model.
This is literally the only viable argument that could be made right now. If an artist were already licensing their work for use in AI models and someone else used them without the license, then they’d actually have an argument, but even though, it hasn’t been determined if training on an AI model is a fair use or not, so that might be a right not granted to the artist by copyright law. You’d have a better chance arguing this in Europe with moral rights involved in copyright laws.