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ARTICLE · 21 JULY 2025

From Input To Impact: The Market Harm Standard Emerging In AI Fair Use

Ballard Spahr LLP
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Another federal court recently ruled that using copyrighted books to train artificial intelligence (AI) systems can qualify as fair use under the U.S. Copyright Act.

United StatesTechnology
Steven Winters
Steven Winters
Harlan Mechling
Harlan Mechling
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Summary

Another federal court recently ruled that using copyrighted books to train artificial intelligence (AI) systems can qualify as fair use under the U.S. Copyright Act. This time, the court said that, because the issue of market dilution was so important, authors would have survived summary judgment had they presented any "meaningful evidence on market dilution at all."

The Upshot

  • In Kadrey v. Meta Platforms, Inc., the federal court for the Northern District of California granted partial summary judgment to Meta. The court found that Meta's use of copyrighted books to train its large language model (LLM) was transformative—satisfying a key prong of the fair use analysis.

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