In this article I'll be talking about a very controversial exception in Intellectual property law, mainly in Copyright law i.e Fair use and Fair dealing. This article provides information about the works that can be done under this exception, commercial and non-profit. A landmark Judgment has been discussed regarding the fair use exception under copyright law in this article for the sake of understanding of a certain topic.

What is Fair use?

This doctrine of fair use enables the user to reuse and reproduce the copyrighted works without the permission of the Copyright owner. Although the condition here is that the work which has been reproduced should not be beneficial in monetary terms to the user, the reproduced work should be for educational purposes, should be a criticism of the copyrighted work, news reporting. The question that the reproduced work comes under the fair use exception or not often depends on the four factors:

1. The reason behind the usage of the copyrighted work
2. The nature of the copyrighted work
3. How much of the portion of the copyrighted work has been used in the reproduced work
4. What will be the effect upon the use of the work in the market (will that generate monetary benefit to the user or not)

When can Fair dealing commercially benefit the user?

In simple terms if the copyrighted work is been used for non-profit reasons, then the user is not likely infringing the right of the copyright owner and will be considered as fair use. But again, it is not as if the user can't commercially benefit from the copyrighted work in its entirety. If the user qualifies in creating something different and unique from the copyrighted work which does not entirely reflect the copyrighted work, then the user can benefit commercially from the work.

This is where parody comes in, parody is a satirical play or act created by taking the base of the copyrighted work. It is created in a unique way that it does not in its entirety reflect the copyrighted work rather uses it as its base to create a comedy or satirical work for the entertainment of the audience. It is viewed in a complete opposition of the copyrighted work because the satirical work stirs up different emotions (usually comedy) than that which was originally projected or intended by the copyright owner in their work.

Let us understand this with an example. In the year 2006 a movie was released called "300". The movie was packed with intense action, filled with the emotions of rage, sadness and it turned out to be a blockbuster. After two years a parody of this blockbuster movie came out called as "Meet the Spartans". It used the base of the movie "300" i.e the war between Spartans and Xerxes but presented it in a different way. It contradicted the genre and emotions which was intended in the movie "300" and presented it in a comedic and satirical way to the public. Hence it passed the Fair dealing test.

Development of Generative AI in Copyright Law:

The dynamic trend of Generative AI and its relation in the copyright law has been in talks lately. The question here comes that whether the practice of the companies to use copyrighted works for training the AI models should be called fair dealing or does it infringe the rights of the copyright owner? Technically the copyrighted works that are used to train the AI models are for training purposes which makes copies of the copyrighted works in a way, teaching the AI model. In majority cases, the end result will not be similar or be exactly as the copies of the copyrighted works that are used in training the AI model.

So does it come under the fair dealing exception? Well, the companies are making the copies of the copyrighted works but they are not showing those copies to the public, hence no human being is seeing these copies of the copyrighted works which are used in training the AI model.

By doing this, the companies are creating a new product which didn't exist before. In my view, the whole back end of copying the copyrighted works to train the AI model is likely to be considered as fair dealing by the court authorities. Significant amount of legal experts have different opinions about using copyrighted works to train the AI models as fair dealing. Some are of the opinion that it does not infringe the right of the copyright user as the copies that are used for training the models are not shown to public, hence it is fair dealing while some are of the opinion that it does infringe the rights of the copyright owners.

A leading landmark judgment similar to this situation but not particularly of Generative AI can be taken into consideration for understanding point of view, Sega Entertainment Ltd Vs Accolade Inc.

In the United States there is no different concept of Fair dealings. Fair use in itself has a very wider scope in the US and it covers commercial work. The judgment is very crucial for understanding the training of models of AI and how they can come under fair use/fair dealings.

Brief facts: Sega Entertainment developed a gaming console Also known as genesis, which can run games that are created by Sega entertainment only. Accolade inc. used reverse engineering and learned how to run their own games on the genesis console, they succeeded. For this purpose, "Accolade used an industry-wide process of disassembling Sega's object code (in order to abstract ideas and functionality) such that Accolade's own game programs could run on Sega's video game console"

Accolade obtained a few of Sega's publicly available game cartridges lawfully by purchasing them on open market. Through the disassembly process, Accolade created a human readable assembly language version of the object code which itself is in the form of ones and zeros, which is referred to as machine language or binary code. Accolade disassembled Sega's machine readable object code into assembly language code which humans can understand

The Court of Appeal held: The reverse engineering by Accolade is fair use and does not infringe the right of Sega Entertainment. It fairly reverse engineered Sega's object code through study and analysis of the concepts, techniques and organization embodied in Sega's object code to develop compatible game cartridges to run their own games on the Sega's console.