744 F.Supp.3d 956
N.D. Cal.2024Background
- Plaintiffs, a group of artists, filed a putative class action against Stability AI, Midjourney, DeviantArt, and Runway AI, alleging unauthorized use of their copyrighted works to train AI image generation models, including Stable Diffusion.
- Plaintiffs claim their artwork was scraped into LAION datasets, which were then used to train these AI models, resulting in outputs mimicking or reproducing their styles or works.
- The First Amended Complaint added new plaintiffs and claims, as well as a new defendant (Runway AI), without prior court leave after a previous dismissal with leave to amend.
- Claims asserted include direct and induced copyright infringement, violations of the Digital Millennium Copyright Act (DMCA), unjust enrichment, breach of contract, and trademark/false endorsement under the Lanham Act.
- The court considers defendants' motions to dismiss, addressing whether the amended complaint sufficiently pleads these claims and if some are preempted by copyright law.
- The court partially grants and partially denies the motions: copyright claims may proceed, but DMCA, breach of contract, and unjust enrichment claims (as pleaded) are dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Addition of new plaintiffs/claims | Leave to amend was broad and allowed additions | Leave was specific; required court permission for new claims | Allowed—will not dismiss on this ground |
| Direct copyright infringement | Defendants copied works for training & outputs mimic works | Products have non-infringing uses; allegations insufficient | Denied—to be litigated further |
| Induced copyright infringement | Defendants distributed models knowing they enable copying | No proof of intent or active steps to foster infringement | Denied—plausibly alleged, discovery needed |
| DMCA violation (removal of CMI) | Model training removes/omits CMI/watermarks/etc. | Outputs are not identical; DMCA only applies to identical copies | Dismissed with prejudice—no identical output alleged |
| Unjust enrichment (state law) | Defendants unjustly benefitted from use of works | Claim is preempted by Copyright Act, no extra element alleged | Dismissed, but leave to amend for new theory if possible |
| Breach of contract (DeviantArt ToS) | DeviantArt breached ToS by using member works in DreamUp | ToS does not prohibit this; no link between conduct and ToS terms | Dismissed with prejudice—no viable claim |
| Lanham Act (false endorsement/trade dress) | Use of names/styles confuses public as to endorsement | No falsity, artistic use protected, elements overly broad | Denied—claims plausibly stated, to be resolved at merits |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6) dismissal)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility and specificity in pleadings)
- Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (secondary copyright liability—inducement requires affirmative conduct)
- Authors Guild v. Google, Inc., 804 F.3d 202 (fair use and substantial similarity in copyright infringement)
- Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190 (Lanham Act, ownership, and likelihood of confusion)
- Walker & Zanger, Inc. v. Paragon Indus., Inc., 549 F. Supp. 2d 1168 (requirements for trade dress protection)