Copyright and Artificial Intelligence - Getty Images (US) Inc and others v Stability AI Ltd

Jane Lambert

 

Chancery Division (Mrs Justice Joanna Smith) Getty Images (US) Inc and others v Stability AI Ltd [2023] EWHC 3090 (Ch) (1 Dec 2023)

The defendant company, Stability AI Ltd., offers to create images to its customers' specifications using a type of artificial intelligence known as "stable diffusion".  The image in Wikipedia of a spaceman on a horse is an example.  The claimants. Getty Images (US) Inc. and its subsidiaries complain that Stability AI reproduces content from their photo libraries to make such images without their licence.  They have brought proceedings for infringement of copyright, database rights and trade marks and passing off.  Stability AI applied for summary judgment or a strike out of the claim under CPR Part 24 and CPR 3.4. It also requested further information of the claim under CPR Part 18.  The Getty companies cross-applied to fix dates for the case management conference, pre-trial review and trial window and permission to amend their particulars of claim.

The Hearing

The applications and cross-applications came on before Mrs Justce Joanna Smith on 31 Oct and 1 Nov 2023.  During the hearing, Getty agreed to give examples of the copyright works that they alleged to have been infringed with safeguards to prevent disclosure of confidential information.  The claimants also clarified their trade mark and passing off claims which prompted the defendant to drop its summary judgment and strike out applications in respect of those causes of action.  The learned judge handed down her judgment on 1 Dec 2023 (see Getty Images (US) Inc and others v Stability AI Ltd [2023] EWHC 3090 (Ch) (1 Dec 2023).  She dismissed the summary judgment and strike-out applications and allowed the cross-application for permission to amend. 

Summary Judgment

Mrs Justice Joanna Smith referred to CPR 24.3 and para [15] the judgment of Mr Justice Lewison in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) as approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2010] Lloyd's Rep IR 301, [2009] EWCA Civ 1098:

"i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 1 All ER 91;
ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel  [2003] EWCA Civ 472, [2003] CPLR 384, [2003] CP Rep 51 at [8];
iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman;
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10];
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] Lloyd's Rep PN 526, [2001] EWCA Civ 550, [2001] BLR 297;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661, [2007] FSR 63, [2006] ETMR 65;
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725".

Her ladyship summarized those principles as follows at para [35] of her judgment:

"The overall burden of proof on a summary judgment application rests on the applicant to establish that there are grounds to believe that the respondent has no real prospect of success and that there is no other compelling reason for trial. Once the applicant adduces credible evidence in support of her application, the respondent becomes subject to an evidential burden of proving a real prospect of success. However, the standard of proof by way of rebuttal is not high - the respondent's case must be more than merely arguable; it must carry some degree of conviction (Easyair at 15(ii) above)."

She also considered para [18] of Lord Justice Popplewell's judgment in Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] EWCA Civ 33, [2021] 3 All ER 978, [2021] 2 All ER (Comm) 1102 and paras [41] and [42] of Lady Justice Asplin's judgment in Elite Property Holdings Ltd v Barclays Bank Plc [2019] EWCA Civ 204.  In the learned judge's view, those passages seemed to reformulate and restate the test as set out in Easyair. She noted in particular that it is not enough to plead allegations which, if true, would establish a claim.  There must be evidential material which establishes a sufficiently arguable case that the allegations are correct. That will include a sufficiently arguable case as to the drawing of an inference by reference to the facts.

The judge referred to para [13] of Lord Justice Moore Bick's judgment in ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725 where he said

"It is the responsibility of the respondent to an application of this kind to place before the court, in the form of a witness statement, whatever evidence he thinks necessary to support his case."

Emphasizing the words "application of this kind" her ladyship noted that the case before the Court of Appeal involved a short point of construction.  She paused to observe that the training and development claim did not give rise to a short point on construction.  Nor was it a case in which she was invited to "grasp the nettle" and decide a short point of law. In her judgment, one must be careful not to import propositions which are relevant to the situation in which the court is being asked to decide a discrete point of law, into situations where the court is being asked to grant summary judgment on the grounds that there is no evidential material which establishes a sufficiently arguable case and no real expectation of any such material being available at trial. In the latter case, there is certainly no requirement for a respondent to place before the court all the factual evidence on which he wishes to rely at trial. As Lord Justice Lewison said in Easyair, the court must take into account not only the evidence actually placed before it on the application for summary judgment, "but also the evidence that can reasonably be expected to be available at trial".

In HRH Emere Godwin Bebe Okpabi v Royal Dutch Shell plc [2021] 2 BCLC 1, [2021] BCC 512, [2021] 1 CLC 402, [2021] WLR 1294, [2021] Bus LR 332, [2021] 1 WLR 1294, [2021] BLR 237, [2021] UKSC 3, [2021] 3 All ER 191, [2021] WLR(D) 93, [2021] Env LR 25, [2021] 2 All ER (Comm) 465 where the Supreme Court had  to consider the summary judgment test of real prospect of success, Lord Hamblen said at para [127]:

"As Lord Briggs JSC stated in Vedanta [202] AC 1045, para 45: 'the court cannot ignore reasonable grounds which may be disclosed at the summary judgment stage for believing that a fuller investigation of the facts may add to or alter the evidence relevant to the issue'". 

Lord Hamblen formulated the question to be posed at [128] as follows:

 "…are there reasonable grounds for believing that disclosure may materially add to or alter the evidence relevant to whether the claim has a real prospect of success"

On the "compelling reason" issue, the judge observed that it may be inappropriate to grant summary judgment where similar issues would remain to be determined at a full trial and extensive factual and expert evidence would have to be called because there would be much less in terms of saving costs and court time than is normal.   For that proposition, she referred to paras [71] to [73] of Lord Justice Jackson's judgment in Iliffe v Feltham Construction Ltd  [2015] CP Rep 41, [2015] EWCA Civ 7. However, she reminded herself that the mere existence of other arguable claims which must go to trial cannot, of itself, be a compelling reason why an unarguable claim should proceed to trial.

Strike Out

Reading  CPR 3.4 (2) (a) with CPR 3.4 (1) her ladyship said that a court may strike out a statement of case or part of a statement of case on the grounds that it "discloses no reasonable grounds for bringing the…claim". When considering a strike-out application, the court must assume that the facts pleaded in the relevant statement of case are true. It must then ask itself whether the claim advanced on the basis of those facts has a real prospect of success.  She added that Practice Direction 3A provides some guidance as to when it may be appropriate to strike out particulars of claim pursuant to CPR 3.4 (2) (a), including claims "which are incoherent and make no sense" and claims "which contain a coherent set of facts but those facts, even if true, do not disclose any legally recognisable claim against the defendant.

She referred to paras [22] to [24] of Lord Justice Coulson's judgment in Begum v Maran (UK) Ltd. [2021] EWCA Civ 326:

"[22] As to the applicable test itself:

(a) The court must consider whether the claimant has a 'realistic' as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 1 All ER 91. A realistic claim is one that carries some degree of conviction: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472. But that should not be carried too far: in essence, the court is determining whether or not the claim is "bound to fail": Altimo Holdings v Kyrgyz Mobil Tel Ltd : [2012] 1 WLR 1804, [2012] WLR 1804, [2011] 1 CLC 205, [2011] UKPC 7, [2012] 1 All ER (Comm) 319, [2011] 4 All ER 1027 at [80] and [82].
(b) The court must not conduct a mini-trial: Three Rivers District Council v Governor and Company of the Bank of England (No 3)  (2001) 3 LGLR 36, [2001] 2 All ER 513, [2003] 2 AC 1, [2001] Lloyds Rep Bank 125, [2001] UKHL 16, [2001] Lloyd's Rep Bank 125 in particular paragraph 95. Although the court should not automatically accept what the claimant says at face value, it will ordinarily do so unless its factual assertions are demonstrably unsupportable: ED & F Man Liquid Products v Patel; Okpabi and others v Royal Dutch Shell Plc and another  (2001) 3 LGLR 36, [2001] 2 All ER 513, [2003] 2 AC 1, [2001] Lloyds Rep Bank 125, [2001] UKHL 16, [2001] Lloyd's Rep Bank 125, at paragraph 110. The court should also allow for the possibility that further facts may emerge on discovery or at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [ [2001] EWCA Civ 550, [2001] Lloyd's Rep PN 526, [2001] BLR 297; Sutradhar v Natural Environmental Research Council [2006] UKHL 33, [2006] 4 All ER 490 at [6]; and Okpabi at paragraphs 127-128.

[23] The other principle relevant to the present appeal is that it is not generally appropriate to strike out a claim on assumed facts in an area of developing jurisprudence. Decisions as to novel points of law should be based on actual findings of fact: see Farah v British Airways (The Times 26 January 2000, CA). In that case, the Court of Appeal referred back to the decision of the House of Lords in Barrett v Enfield DC [1999] 3 All ER 193, [1999] 2 FCR 434, (1999) 2 CCL Rep 203, [1999] Ed CR 833, [1999] PIQR P272, [1999] WLR 79, [1999] Fam Law 622, [1999] 2 FLR 426, [1999] BLGR 473, [1999] UKHL 25, (1999) 11 Admin LR 839, [1999] 3 WLR 79, (1999) 1 LGLR 829, [2001] 2 AC 550, (1999) 49 BMLR 1where Lord Browne-Wilkinson said at 557e-g:

'In my speech in the Bedfordshire case [1995] 2 FLR 276, [1995] 3 FCR 337, [1995] 3 WLR 152, (1995) 7 Admin LR 705, [1995] Fam Law 537, [1995] 3 All ER 353, [1995] 2 AC 633, [1995] UKHL 9, 94 LGR 313, 740 – 741 with which the other members of House agreed, I pointed out that unless it was possible to give a certain answer to the question whether the plaintiff's claim would succeed, the case was inappropriate for striking out. I further said that in an area of the law which was uncertain and developing (such as the circumstances in which a person can be held liable in negligence for the exercise of a statutory duty or power) it is not normally appropriate to strike out. In my judgment it is of great importance that such developments should be on the basis of actual facts found at trial not on hypothetical facts assumed (possibly wrongly) to be true for the purposes of the strike out'....

[24]. The same point arose more recently in Vedanta Resources PLC & Another v Lungowe and Others [2019] : [2019] UKSC 20, [2019] BLR 327, [2019] 2 WLR 1051, [2019] 1 CLC 619, [2019] 2 All ER (Comm) 559, [2019] WLR(D) 241, [2020] AC 1045, [2019] Env LR 32, [2019] BCC 520, [2019] 2 Lloyd's Rep 399, [2019] 3 All ER 1013. That was a case where the underlying duty of care was alleged against a parent company, rather than the company involved in the day–to–day running of the mine said to have caused the pollution. Lord Briggs said:

'48. It might be thought that an assertion that the claim against Vedanta raised a novel and controversial issue in the common law of negligence made it inherently unsuitable for summary determination. It is well settled that difficult issues of law of that kind are best resolved once all the facts have been ascertained at a trial, rather than upon the necessarily abbreviated and hypothetical basis of pleadings or assumed facts.'"

Finally, Ms Justice Joanna Smith said in para [42] of her judgment:

"Where the strike out plea is based on the nature of the pleading and there is also a summary judgment application made in the alternative which depends purely upon the way in which the case is pleaded, "there is no difference between the tests to be applied by the court under the two rules" (Begum at [20])."

Copyright - Primary Infringement

Stability AI argued that the claim should fail because there was no evidence that any part of the training and development of its artificial intelligence system had taken place in the UK. The judge noted at para [43] of her judgment that it was common ground that copyright and database rights are territorial which confer protection on their holder only within the United Kingdom.

In their particulars of claim, the Getty companies alleged that it was likely that at least some of the works in which they claimed copyright had been infringed by downloading and processing them in the UK as a significant number of members of Stability AI's development team lived and worked here. In rebutting that inference, the defendant filed witness statements from its founder and chief executive and from its chief financial officer.  The judge said that if the proceedings before her were a trial the evidence of those witnesses would provide strong support for a finding that no development or training of the AI system had taken place in the UK. 

However, those proceedings were not the trial of the action. If she was to grant summary judgment her ladyship had to be satisfied that there was no real prospect of the claimants being able, to refute that evidence and to establish grounds for the inference that they had invited the court to draw in their particulars of claim. Having examined with care all the evidence before her, the judge was not so satisfied. There seemed to be contrary evidence on the location issue, evidence raising unanswered questions and inconsistencies relevant to that determination and reasonable grounds for believing that disclosure might add to or alter the evidence relevant to the question of where the training and development had taken place. All of that clearly supported the proposition that the training and development claim had a real prospect of success and should go to trial. It was certainly not an issue on which her ladyship could say that the claim was hopeless.

The court could not conduct a mini-trial on an application of that sort. It would have been inappropriate for the judge to conduct a detailed analysis of the evidence because there were materials that conflicted with that evidence. They consisted of YouTube videos, a statement to the court in the USA in which a similar action has been brought against Stability AI and Getty's analysis of Stability's computing resources that suggested that the evidence in the CEO and CFI's statements might be incomplete. For all those reasons, Mrs Justice Joanna Smith was unable to conclude that the training and development claim carried no degree of conviction and so had no real prospect of success. She dismissed the summary judgment application in relation to that claim.

Copyright - Secondary Infringement

Stability AI also applied to strike out the following paragraphs of the particulars of claim:

"52.4 As regards the acts identified above at paragraphs 44 to 46, importing into the United Kingdom, otherwise than for private and domestic use, an article, namely Stable Diffusion, which is and which the Defendant knows or has reason to believe is, an infringing copy of the Copyright Works or each or any of them, contrary to section 22 of the CDPA; and/or
52.5 As regards the acts identified above at paragraphs 44 to 46, possessing in the course of a business, selling or letting for hire, or offering or exposing for sale or hire, an article, namely Stable Diffusion, which is and which the Defendant knows or has reason to believe is, an infringing copy of the Copyright Works or each or any of them, contrary to section 23 of the CDPA".

The defendant company argued that Stable Diffusion could not be an "infringing copy" because it was not an "article" within the meaning of s.27 (2) of the Copyright, Designs and Patents Act 1988.  It argued that an article had to be tangible because s.22  required it to be capable of being imported, s.23 required it to be capable of being possessed and distributed and s.27 required it to be capable of being made. Moreover, all the authorities on s.22 and s.23 had concerned tangible articles such as shoes as in LA Gear Inc v Hi-Tec Sports plc [1992] FSR 121, compact discs as in Springsteen v Flute International Ltd and others 1999] EMLR 180, [1998] EWHC Patents 277 and football sticker albums as in Football Association Premier League Ltd. and others v Panini UK Ltd. [2004] WLR 1147, [2004] 1 WLR 1147, [2003] EWCA Civ 995.

Stability AI further contended that it was settled law that abstract information is not property and cannot be the subject of a claim for detinue or conversion.  It referred to  para [42] of Lord Justice Floyd's judgment in Your Response Limited v Datateam Business Media Limited  [2014] WLR(D) 131, [2014] 4 All ER 928, [2014] 3 WLR 887, [2014] EWCA Civ 281, [2014] 2 All ER (Comm) 899, [2015] QB 41, [2014] CP Rep 31, [2015] 1 QB 41:

"An electronic database consists of structured information. Although information may give rise to intellectual property rights, such as database right and copyright, the law has been reluctant to treat information itself as property. When information is created and recorded there are sharp distinctions between the information itself, the physical medium on which the information is recorded and the rights to which the information gives rise. Whilst the physical medium and the rights are treated as property, the information itself has never been."

It also cited para [125] of Lord Justice Arnold's judgment in Thaler v Comptroller General of Patents, Trade Marks and Designs [2021] EWCA Civ 1374:

"There are good reasons of principle and policy for this rule: it would have alarming consequences if there was property in information".

It submitted that although those cases do not relate directly to the interpretation of s.22 or s.23 of the Copyright, Designs and Patents Act 1988 it was necessary to look to dealings in tangible property such as goods or merchandise which embody information when assessing the "article" for the purposes of secondary infringement.   In support of that contention, it cited Sony Computer Entertainment Inc v Ball [2005] FSR 9 and Wheat v Google LLC [2018] EWHC 550 (Ch).   It concluded that this was a straightforward question of statutory construction, The claimants had no real prospect of establishing that "article" includes intangible things.  The point should be determined whether in its favour or not at that hearing.

The judge declined to take the course suggested by the defendant because she considered that there were good reasons to postpone to trial a decision on the statutory interpretation of the word "article".  Two of the cases on which Stability AI relied, Sony Computer Entertainment Inc v Ball and  Wheat v Google LLC, were not entirely on point and were certainly not determinative of the issue.  Also, s.17 of the 1988 Act suggested that a copy could be intangible. The Court of Justice of the European Union had held in C-433/20, Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte GmbH v Strato AG  EU: C:2022:217, [2022] EUECJ C-433/20, ECLI:EU: C:2022:217, [2022] WLR(D) 145, [2022] Bus LR 552 that storage in a medium by electronic means can include cloud storage.   The claimants raised an issue on the meaning of s.27 (6) in their oral submissions to which the defendant could not respond fully.   The judge decided that it would be unsafe to decide an important point of statutory construction in those circumstances. 

The defendant's argument appeared to raise a novel question that had not previously been determined.  It would be better resolved once all the facts have been ascertained at trial rather than upon the necessarily abbreviated and hypothetical basis of pleadings or assumed facts.   For all these reasons her ladyship dismissed the application.

The Cross-Application

The Getty companies sought permission to amend their particulars of claim by adding the following paragraphs:

"50A. From a date unknown but since at least in or around March 2023 the Defendant introduced an image-to-image feature which enables Stable Diffusion to generate a synthetic image output in response to an image uploaded by a user (either via Dream Studio or via a copy of Stable Diffusion downloaded from GitHub or via commercial offerings using Stable Diffusion), either with or without a text command. The user is able to determine how closely the synthetic image output matches the image prompt by the use of an 'image strength' slider, with the maximum image strength and/or values approaching the maximum image strength providing images which comprise the whole or a substantial part of the image prompt.
50B. Accordingly, when a user provides an image prompt (either via Dream Studio or via a copy of Stable Diffusion downloaded from GitHub or via commercial offerings using Stable Diffusion) comprising one of the Copyright Works or the Visual Assets and uses the maximum image strength or a value approaching the maximum image strength (the precise value to be identified by way of disclosure and/or evidence), the synthetic image output comprises the whole or a substantial part of the Copyright Work or Visual Asset. Pending the provision of disclosure and/or evidence, the Claimants rely upon the following facts and matters:
50B.1. In the case of Stable Diffusion downloaded from GitHub, the image strength is a value between 0.0 and 1.0 that controls the amount of noise that is added to the image prompt. As explained in the guidance on the GitHub website (a copy of which is attached hereto at Annex 8A) values that approach 1.0 allow for lots of variations in the synthetic image output by removing all pixel-based information. By contrast, values that approach 0.0 (i.e. the maximum image strength) result in a synthetic image output that reproduces the whole or a substantial part of the image prompt.
50B.2. When an image is uploaded by a user, it is first converted into noise, and this noise pattern is used as an input to the image synthesis process. Thus, the image-to-image feature uses both Stable Diffusion and the pixels of the user-supplied, uploaded image.
50B.3. Copies of synthetic images that were generated in response to image prompts comprising a Copyright Work or Visual Asset, together with the image strength indicated, uploaded via a copy of Stable Diffusion downloaded from GitHub are attached hereto at Annex 8B".

Cross-references to those paragraphs and consequential amendments appeared elsewhere in the draft particulars.

Stability AI opposed the application on the grounds that they had no real prospect of success and they had been inadequately particularized.

Referring to CPR 17.3, the learned judge noted that the court had a broad discretionary power to grant permission to amend.  The relevant principles had been set out by Mrs Justice Carr in paras [36] to [39] of her judgment in Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) and by Mrs Justice Lambert in para [10] of her judgment in Pearce v East and North Hertfordshire NHS Trust [2020] EWHC 1504 (QB).  If amendments are to be permitted they must have a realistic prospect of success and carry a degree of conviction.   As Lord Justice Popplewell said in Kawasaki Kisen Kaisha Ltd v James Kemball Limited [2021] EWCA Civ 33  at para [18 (1)] of his judgment, it is not enough that the amendment is merely arguable. The court is entitled to refuse an amendment which raises a version of events "which is inherently implausible, self-contradictory or is not supported by contemporaneous documentation" (per Collier v P&MJ Wright (Holdings) Ltd [2007] EWCA Civ 1329). The pleading must be coherent and properly particularised (per Kawasaki at [18(2)]).  Mrs Justice Joanna Smith added at [101] of her judgment:

"The overriding objective is of "central importance"; thus amendment applications will always involve the court striking a balance between injustice to the applicant if the amendment is refused and injustice to the opposing party and other litigants in general if the amendment is permitted."

After hearing argument from the parties, her ladyship considered that the image-to-image claim as pleaded had a real prospect of success and that, having regard to the balancing exercise referred to above, it was plainly a claim that should go to trial.   

Comment

In his note on this case, Dr Andrés Guadamuz opined that an application to have the claims struck was never going to succeed (see High Court rules that Getty v Stability AI case can proceed in Techno Llama 5 Dec 2023).   Looking at the case without the benefit of hindsight, I am not sure that it was quite so hopeless.  The claim relied heavily on inference and the claimants agreed to provide further information.  If the claim succeeds it will have alarming consequences for the development of artificial intelligence in this country.  I can quite understand why Stability AI would want to challenge this claim at the earliest possible opportunity.

Anyone wishing to discuss this case note is welcome to call me on 020 7404 5252 during UK office hours or send me a message through my contact form.