Five things to know about the Kadrey et al. v. Meta Platforms, Inc. fair use decision

Issue 37 

Two fair use decisions were issued last week in AI copyright infringement lawsuits in the United States District Court for the Northern District of California. The first opinion, in Bartz et al. v. Anthropic PBC, was the subject of last week’s newsletter. This week, we are digging into the 40-page fair use ruling in Kadrey et al. v. Meta Platforms, Inc. 

In Kadrey, the Court ruled for Meta on its fair use defense to plaintiffs’ copyright infringement claim.[i] The Hon. Vince Chhabria summarized his ruling as follows:  

* * * plaintiffs offer two primary theories for how the markets for their works are affected by Meta’s copying. They contend that Llama is capable of reproducing small snippets of text from their books. And they contend that Meta, by using their works for training without permission, has diminished the authors’ ability to license their works for the purpose of training large language models. As explained below, both of these arguments are clear losers. Llama is not capable of generating enough text from the plaintiffs’ books to matter, and the plaintiffs are not entitled to the market for licensing their works as AI training data. As for the potentially winning argument—that Meta has copied their works to create a product that will likely flood the market with similar works, causing market dilution—the plaintiffs barely give this issue lip service, and they present no evidence about how the current or expected outputs from Meta’s models would dilute the market for their own works.    

Given the state of the record, the Court has no choice but to grant summary judgment to Meta on the plaintiffs’ claim that the company violated copyright law by training its models with their books. But in the grand scheme of things, the consequences of this ruling are limited. This is not a class action, so the ruling only affects the rights of these thirteen authors—not the countless others whose works Meta used to train its models. And, as should now be clear, this ruling does not stand for the proposition that Meta’s use of copyrighted materials to train its language models is lawful. It stands only for the proposition that these plaintiffs made the wrong arguments and failed to develop a record in support of the right one.[ii]  

Below is some background on the lawsuit and five takeaways from the Kadrey order on fair use, starting off with how the Bartz and Kadrey opinions differ on the fair use analysis for AI model training.   

Background of the Kadrey Lawsuit  

On July 7, 2023, authors Richard Kadrey, Sarah Silverman, and Christopher Golden filed a class action lawsuit against Meta Platforms, Inc., alleging claims of direct and vicarious copyright infringement, removal of copyright management information pursuant to the Digital Millenium Copyright Act, unfair competition and negligence under California law, and unjust enrichment on the basis that plaintiffs and the class members did not consent to Meta’s use of their copyrighted books to train Meta’s large language models.[iii] All of plaintiffs’ claims other than direct copyright infringement were later dismissed.[iv] Plaintiffs amended the complaint to add new allegations to their direct copyright infringement claim and to add claims under the Digital Millennium Copyright Act and the California Comprehensive Computer Data Access and Fraud Act (“CDAFA”), and the CDAFA claim was subsequently dismissed.[v] The lawsuit was also consolidated with Chabon et al. v. Meta Platforms, Inc., No. 3:23-cv-04663 (N.D. Cal. filed Sept. 12, 2023), Huckabee et al. v. Meta Platforms, Inc. et al., No. 4:23-cv-06663 (N.D. Cal transferred Dec. 29, 2023), and Farnsworth v. Meta Platforms, Inc., No. 24-cv-06893 (N.D. Cal. filed Oct. 1, 2024).[vi]  

Five Things to Know About the Kadrey Order on Fair Use  

1. The Bartz and Kadrey opinions disagree on AI training fair use analysis. 

The Kadrey decision agreed with the Bartz decision that the purpose and character of using plaintiffs’ books to train AI models was “highly transformative,” and both decisions ultimately found that the use was a fair use.[vii]  

However, the Hon. Vince Chhabria, author of the Kadrey decision, disagreed with how the Hon. William Alsup weighed the fair use factors in the Bartz decision on AI model training, stating:  

But as the Supreme Court has emphasized, the fair use inquiry is highly fact dependent, and there are few bright-line rules. There is certainly no rule that when your use of a protected work is “transformative,” this automatically inoculates you from a claim of copyright infringement. And here, copying the protected works, however transformative, involves the creation of a product with the ability to severely harm the market for the works being copied, and thus severely undermine the incentive for human beings to create. Under the fair use doctrine, harm to the market for the copyrighted work is more important than the purpose for which the copies are made.  

Speaking of which, in a recent ruling on this topic, Judge Alsup focused heavily on the transformative nature of generative AI while brushing aside concerns about the harm it can inflict on the market for the works it gets trained on. Such harm would be no different, he reasoned, than the harm caused by using the works for “training schoolchildren to write well,” which could “result in an explosion of competing works.” Order on Fair Use at 28, Bartz v. Anthropic PBC, No. 24-cv-5417 (N.D. Cal. June 23, 2025), Dkt. No. 231. According to Judge Alsup, this “is not the kind of competitive or creative displacement that concerns the Copyright Act.” Id. But when it comes to market effects, using books to teach children to write is not remotely like using books to create a product that a single individual could employ to generate countless competing works with a miniscule fraction of the time and creativity it would otherwise take. This inapt analogy is not a basis for blowing off the most important factor in the fair use analysis.[viii]  

The Hon. Vince Chhabria later elaborated on the importance of the fourth fair use factor, 

Because it “focuses on actual or potential market substitution,” Warhol, 598 U.S. at 536 n.12, the fourth factor is “undoubtedly the single most important element of fair use,” Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 566 (1985). If the law allowed people to copy your creations in a way that would diminish the market for your works, this would diminish your incentive to create more in the future. Thus, the key question in virtually any case where a defendant has copied someone’s original work without permission is whether allowing people to engage in that sort of conduct would substantially diminish the market for the original work. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994).[ix]   

The Hon. Vince Chhabria concluded, “plaintiffs needed to win decisively on the fourth factor to win on fair use[,]” but, 

[T]he plaintiffs presented no meaningful evidence on market dilution at all. Absent such evidence and in light of Meta’s evidence, the fourth factor can only favor Meta. Therefore, on this record, Meta is entitled to summary judgment on its fair use defense to the claim that copying these plaintiffs’ books for use as LLM training data was infringement.[x] 

2. The Bartz and Kadrey opinions disagree on whether downloading the books should be considered separately from training.  

In Bartz, the Court started with the idea, “at the threshold, a court must decide whether a “copyrighted [work] has been used in multiple ways,” then evaluate each.  Warhol, 598 U.S. at 533.”[xi] The Bartz Court identified three uses for plaintiffs’ books, which included as relevant here, both training and downloading pirated copies to build a central library, and concluded that while using plaintiffs’ books for AI model training was a fair use, pirating copies of the books to build a permanent, general-purpose library was not a fair use.[xii]  

In contrast, in the Kadrey opinion, the Court dispensed with plaintiffs’ argument that Meta’s downloading of the books must be considered separately from using the books for AI model training: 

The last issue relating to the character of Meta’s use (and thus the first factor) is the relationship between Meta’s downloading of the plaintiffs’ books and Meta’s use of the books to train Llama. To the extent the plaintiffs suggest that the former must be considered wholly separately from the latter, they are wrong. To be sure, Meta’s downloading is a different use from any copying done in the course of LLM training. But that downloading must still be considered in light of its ultimate, highly transformative purpose: training Llama. See Authors Guild v. Google, Inc. (Google Books), 804 F.3d 202, 216–18 (2d Cir. 2015) (considering the creation of digital copies of books in light of the secondary user’s overall purpose of creating a searchable database); cf. Warhol, 598 U.S. at 533 (noting that different uses must be considered separately, but that “the same copying may be fair when used for one purpose but not another”); contra Order on Fair Use at 18, Bartz, No. 24-cv-5417. Because Meta’s ultimate use of the plaintiffs’ books was transformative, so too was Meta’s downloading of those books.[xiii] 

3. The Kadrey Court shut down plaintiffs’ infringing outputs arguments. 

As noted above, the Kadrey plaintiffs alleged that Meta’s Llama AI model was able to reproduce snippets of text from their books.[xiv] The Court responded, 

If Llama could be used to generate significant portions of the plaintiffs’ books—or text so similar to their books as to be infringing in its own right—that would threaten the market for the books because people would read those outputs instead. But that theory of harm is not viable in this particular case because, as discussed above, Llama does not allow users to generate any meaningful portion of the plaintiffs’ books. Neither party’s expert opined that Llama was able to regurgitate more than 50 words from any of the plaintiffs’ books, even in response to “adversarial” prompting designed specifically to make LLMs regurgitate. See Pls. Ex. 79 ¶¶ 7172, 82–84, 92. And the plaintiffs’ expert conceded that Llama would not generate “any significant percentage” of their books.[xv] 

4. The Kadrey Court ridiculed the idea that adverse court rulings would halt AI development. 

The Hon. Vince Chhabria took the opportunity to respond to the argument that courts should not try to stand in the way of AI advancement: 

Another argument offered in support of the companies is more rhetorical than legal: Don’t rule against them, or you’ll stop the development of this groundbreaking technology. The technology is certainly groundbreaking. But the suggestion that adverse copyright rulings would stop this technology in its tracks is ridiculous. These products are expected to generate billions, even trillions, of dollars for the companies that are developing them. If using copyrighted works to train the models is as necessary as the companies say, they will figure out a way to compensate copyright holders for it.[xvi]    

5. The Hon. Vince Chhabria extensively laid out his views on winning vs. losing AI copyright infringement cases. 

At the outset of the Kadrey opinion, the Hon Vince. Chhabria stated that “in most cases” AI copyright infringement defendants will not be saved by the affirmative defense of fair use: 

Companies are presently racing to develop generative artificial intelligence models— software products that are capable of generating text, images, videos, or sound based on materials they’ve previously been “trained” on. Because the performance of a generative AI model depends on the amount and quality of data it absorbs as part of its training, companies have been unable to resist the temptation to feed copyright-protected materials into their models—without getting permission from the copyright holders or paying them for the right to use their works for this purpose. This case presents the question whether such conduct is illegal.    

Although the devil is in the details, in most cases the answer will likely be yes. What copyright law cares about, above all else, is preserving the incentive for human beings to create artistic and scientific works. Therefore, it is generally illegal to copy protected works without permission. And the doctrine of “fair use,” which provides a defense to certain claims of copyright infringement, typically doesn’t apply to copying that will significantly diminish the ability of copyright holders to make money from their works (thus significantly diminishing the incentive to create in the future). Generative AI has the potential to flood the market with endless amounts of images, songs, articles, books, and more. People can prompt generative AI models to produce these outputs using a tiny fraction of the time and creativity that would otherwise be required. So by training generative AI models with copyrighted works, companies are creating something that often will dramatically undermine the market for those works, and thus dramatically undermine the incentive for human beings to create things the old-fashioned way.[xvii] 

Later in the Kadrey opinion, the Hon. Vince Chhabria spent a considerable number of pages exploring the landscape of AI copyright infringement cases, and how the harm of market dilution might apply in various circumstances.[xviii] In part, the Hon. Vince Chhabria explained,  

Of course, not all copyrighted works would have their markets diluted equally by AI-generated competitors. It seems unlikely, for instance, that AI-generated books would meaningfully siphon sales away from well-known authors who sell books to people looking for books by those particular authors. But it’s easy to imagine that AI-generated books could successfully crowd out lesser-known works or works by up-and-coming authors. While AI-generated books probably wouldn’t have much of an effect on the market for the works of Agatha Christie, they could very well prevent the next Agatha Christie from getting noticed or selling enough books to keep writing.12   

This effect also seems likely to be more pronounced with respect to certain types of works. For instance, an AI model that can generate high-quality images at will might be expected to greatly affect the market for such images, diminishing the incentive for humans to create them. An LLM that could generate accurate information about current events might be expected to greatly harm the print news market. The market for certain nonfiction works—for example, books about how to take care of your garden—could be greatly diminished by the ability of LLMs to produce books on that topic. For fiction works, it might be more dependent on the author or the genre in which that author operates.[xix] 

In the Hon. Vince Chhabria’s view,  

Fair use is a fact-specific doctrine that requires case-by-case analysis that is sensitive to new technologies and their potential consequences. No previous case has involved a use that is both as transformative and as capable of diluting the market for the original works as LLM training is. So no previous case answers the question whether Meta’s copying was fair use. That question must be answered by flexibly applying the fair use factors and considering Meta’s copying in light of the purpose of copyright and fair use: protecting the incentive to create by preventing copiers from creating works that substitute for the originals in the marketplace.   

In cases involving uses like Meta’s, it seems like the plaintiffs will often win, at least where those cases have better-developed records on the market effects of the defendant’s use. No matter how transformative LLM training may be, it’s hard to imagine that it can be fair use to use copyrighted books to develop a tool to make billions or trillions of dollars while enabling the creation of a potentially endless stream of competing works that could significantly harm the market for those books. And some cases might present even stronger arguments against fair use. For instance, as discussed above, it seems that markets for certain types of works (like news articles) might be even more vulnerable to indirect competition from AI outputs. On the other hand, though, tweak some facts and defendants might win. For example, using copyrighted books to train an LLM for nonprofit purposes, like national security or medical research, might be fair use even in the face of some amount of market dilution. See Oracle, 593 U.S. at 32 (“[A] finding that copying was not commercial in nature tips the scales in favor of fair use.”). Or plaintiffs whose works are unlikely to face meaningful competition from AI-generated ones may be unable to defeat a fair use defense.[xx]    

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Thanks for being here. 

Jennifer Ballard 

Good Journey Consulting 

[i] Order Denying the Plaintiffs’ Motion for Partial Summary Judgment and Granting Meta’s Cross-Motion for Partial Summary Judgment at 40, Kadrey et al. v. Meta Platforms, Inc., No. 3:23-cv-03417 (N.D. Cal. filed Jul. 7, 2023). 

[ii] Id. at 4-5. 

[iii] Complaint at 2, 6-10, Kadrey. 

[iv] Order Denying the Plaintiffs’ Motion for Partial Summary Judgment and Granting Meta’s Cross-Motion for Partial Summary Judgment at 14, Kadrey. 

[v] Id. 

[vi] See Third Amended Consolidated Complaint, Kadrey. 

[vii] Order Denying the Plaintiffs’ Motion for Partial Summary Judgment and Granting Meta’s Cross-Motion for Partial Summary Judgment at 16, 40, Kadrey; Order on Fair Use at 9, Bartz et al. v. Anthropic PBC, No. 3:24-cv-05417 (N.D. Cal. filed Aug. 19, 2024).  

[viii] Order Denying the Plaintiffs’ Motion for Partial Summary Judgment and Granting Meta’s Cross-Motion for Partial Summary Judgment at 3, Kadrey. 

[ix] Id. at 6-7. 

[x] Id. at 40. 

[xi] Order on Fair Use at 10, Bartz.  

[xii] Id. at 9. 

[xiii] Order Denying the Plaintiffs’ Motion for Partial Summary Judgment and Granting Meta’s Cross-Motion for Partial Summary Judgment at 21, Kadrey. 

[xiv] Id. at 4. 

[xv] Id. at 26-27. 

[xvi] Id. at 3-4. 

[xvii] Id. at 1-2. 

[xviii] Id. at 28-36. 

[xix] Id. at 28-29. 

[xx] Id. at 39.