Market & Regulation
DOJ vs. Judge Chhabria on AI Copyright Fair Use
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Why it matters
- →DOJ’s rejection of market dilution arguments signals a federal push to decouple training from output liability.
- →The clash between DOJ and Judge Chhabria creates conflicting precedents for future fair-use defenses.
- →AI companies face heightened legal risk as the definition of 'market harm' remains unresolved.
The U.S. Department of Justice has filed a Statement of Interest in New York Times v. OpenAI, explicitly criticizing Judge Vince Chhabria’s fair-use analysis in Kadrey v. Meta. While DOJ agrees that LLM training is transformative, it rejects Chhabria’s conclusion that this training causes cognizable market harm through dilution. DOJ contends that training and outputs are distinct uses, whereas Chhabria argued the industrial scale of AI generation creates unique competitive pressures. This disagreement highlights a critical legal uncertainty regarding whether model training itself constitutes infringement under current copyright law.
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