This year marked a turning point as courts, businesses, and lawmakers grappled with how copyright law applies to generative AI systems trained on vast datasets of copyrighted content.

Key Legal Developments:

• Court decisions emerged on fair use defenses for AI training, with mixed results depending on how the AI output is used
• Transformative use finding: Some courts ruled that training AI systems qualifies as fair use when the purpose is sufficiently transformative
• Direct competition problems: Courts found infringement when AI outputs directly compete with original copyrighted works
• Growing litigation: Copyright owners filed dozens of lawsuits, many proceeding as class actions

Business Solutions Take Shape:

• Major licensing deals: Disney licensed hundreds of characters to OpenAI; tech companies struck agreements with publishers for model training and revenue sharing
• Industry adaptation: Companies increasingly pursuing licensed content rather than risking fair use arguments

Government Weighing In:

• U.S. Copyright Office issued guidance on infringement and fair use issues
• Congressional scrutiny: Lawmakers called generative AI training “the largest intellectual property theft in American history”
• Executive action: Recent executive order promised both “minimally burdensome” standards and copyright protection

The Bigger Picture: This follows copyright law’s historical pattern of adapting to new technologies—from broadcasting to the internet. We’re currently in an “awkward developmental phase” where technology advances faster than legal frameworks, but 2025 showed early signs of workable solutions emerging through both litigation outcomes and business partnerships.

While comprehensive legal solutions remain elusive, the year demonstrated that generative AI is moving from legal uncertainty toward established precedents and industry practices. The read the full article, visit: The Indiana Lawyer