Copyright and AI Case Study

​Copyright & AI
Case Study

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ArtifyAI, a U.S.-based startup, launches an AI image generator.
The model was trained on millions of images scraped from the internet, including copyrighted stock photos, without permission.

Some users generate images that occasionally include distorted stock-photo watermarks.
A stock image company sues ArtifyAI in U.S. federal court for copyright infringement and trademark infringement.

ArtifyAI argues that AI training is fair use and that the outputs are new, transformative works.

Multiple Choice

Under U.S. copyright law, which factor is MOST important when evaluating whether AI training may qualify as fair use?

• Whether the AI model is open source

• Whether the use is transformative

• Whether the original works are creative

• Whether users pay for the AI service

Multiple Choice

If an AI-generated image includes a recognizable stock-photo watermark, what is the STRONGEST legal claim for the plaintiff?

• Fair use violation

• Copyright term extension

• Trademark infringement or false designation of origin

• Public domain misclassification

Multiple Choice

For copyright infringement in the U.S., the plaintiff must generally prove:

• The AI model memorized the training images

• The defendant used copyrighted works

• The output is commercially successful

• Substantial similarity between the output and the original work

Multiple Choice

Which argument BEST supports ArtifyAI’s fair use defense under U.S. law?

• The images were publicly accessible online

• The AI training involved copying entire works

• The training use is transformative and does not replace the market for the originals

• The company did not intend to infringe