IP Law Archives – Southern California Law Review

Fair Use and Fair Price

July 2025July 2025Roy Baharad* & Gideon Parchomovsky†

In this Article, we present and develop a new justification for the fair use doctrine. The accepted lore among copyright law scholars is that fair use is a means for overcoming a market failure in the form of high transaction costs. According to this view, the doctrine sanctions unauthorized use of copyrighted works in cases where transaction costs hinder voluntary, mutually beneficial exchanges.

Departing from conventional wisdom, we argue that the fair use doctrine serves as an important empowerment even in fully functional markets. Fair use enables users to secure more favorable licensing terms from copyright owners by endowing users with a threat point in their negotiations. Without fair use, users would have to pay the price demanded by copyright owners or not use the work. With fair use, many users can credibly assert that their intended use of copyrighted content is privileged by the fair use doctrine and thus they can use the desired content without authorization. The fair use doctrine, therefore, gives users leverage in their negotiations with copyright owners.

We illustrate our thesis by applying it to the landmark fair use decisions of the Supreme Court, including the recent ruling in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, that determined the bargaining standpoint of users for decades to come. We demonstrate the distributive effects of the Supreme Court’s fair use jurisprudence and explain how the Court must act to preserve and augment the empowering effect of fair use. The theory presented in this Article proves that the reach of fair use goes well beyond market failures and that the impact of the doctrine is much more significant than previously thought.

INTRODUCTION

Considered by many as the most important doctrine in our copyright law system,¹ fair use sanctions certain unauthorized uses of copyrighted works that would otherwise constitute a copyright infringement. Under the fair use doctrine, when a use is considered fair, the user is relieved of liability and need not pay compensation to the copyright owner whose content they used. Therefore, fair use may be conceptualized as a doctrine that confers upon deserving users a private taking power over copyrighted content that can be exercised at a zero price.²

Since its inception in the English common law and equity courts, the fair use doctrine has never ceased to fascinate theorists and students.³ The existence of the doctrine raised two critical challenges for scholars. First, under what circumstances should a use be considered fair? Second, why should fair users be fully relieved of the duty to compensate copyright owners?

The answer to both these questions has been provided by Professor Wendy Gordon. In a pathbreaking article authored almost forty years ago, Gordon conceptualized fair use as a means for overcoming a market failure in the form of high transaction costs.⁴ Gordon persuasively argued that courts should recognize fair use when three cumulative conditions obtain: first, high transaction costs prevent voluntary market exchange between copyright owners and users; second, the allegedly fair use is socially beneficial; and, third, a fair use finding would not unduly undermine incentives to create.⁵ Gordon’s key insight was that when transaction costs are prohibitive, there will be no voluntary trade between copyright owners and users. In this scenario, allowing users to use copyright content for free benefits the user without harming copyright owners, for the latter would not be able to collect payments from users as transaction costs bar voluntary exchanges. Gordon correctly submitted that under these circumstances, allowing users to use copyright content for free, by classifying their use as fair, is welfare enhancing.

By tying fair use to the level of transaction costs, Gordon, at once, provided a cogent defense of the fair use doctrine and exposed its vulnerability. Professor Tom Bell and other scholars pointed out that in an interconnected world, where technological advancements constantly lower transaction costs, there may no longer be a need for fair use, and at a minimum, courts’ willingness to recognize fair uses should diminish.⁶ Importantly, this skeptical view of fair use has not been universally endorsed by other scholars, who advanced other utilitarian and non-utilitarian justifications for fair use.⁷

In this Article, we develop a new justification for fair use that is radically different from prior theorizing. Our theory seeks to complement and reinvigorate the theories of scholars who view fair use as an essential component of our copyright system. Yet, our outlook places fair use on a very different ground from past scholarship. We contend that fair use’s most significant yet overlooked role is to facilitate bargaining between copyright owners and users, even when transaction costs are low. We argue that fair use helps users not only in those unrepresentative and rare cases where transaction costs prevent consensual transactions between copyright owners and users, but also in the more common case where transaction costs are low or nonexistent. Fair use does this by improving the bargaining power of users and giving them leverage or a threat point vis-à-vis copyright owners.

Although fair use has been traditionally considered an open-ended and unpredictable doctrine,⁸ two recent developments have infused a certain level of predictability into this area of the law. First, a close reading of fair use cases uncovers, what we call, two fair use clusters: transformative uses and uses that yield a substantive public benefit.⁹ Second, an empirical study by Professor Barton Beebe established a meaningful positive correlation between two of the statutory factors that courts are instructed to weigh in making fair use determinations—the purpose of the use and the effect of the use on the market for the copyrighted work.¹⁰ This emergence of clusters of uses or activities that have a legitimate claim for fair use is a welcome development for users, as it manifests in increased licensing leverage.

Consider transformativeness. Transformativeness covers a wide range of uses. While the level of transformativeness varies among uses, all users who engage in transformative uses of copyrighted works have a colorable fair use claim. Obviously, not all of them would win a fair use ruling in court, but each can credibly argue in negotiations with copyright owners that their use would be found fair with a certain probability. Since transformativeness, as recently established by the Supreme Court, “is a matter of degree,”¹¹ the level of transformativeness can be represented on a unit interval, essentially reflecting its probability of enjoying a fair use defense. This probability, in turn, immediately translates into licensing leverage when negotiating with a monopolistic rightsholder.

To illustrate, imagine that Anne plans to make a transformative use of a photograph in which Bob owns a copyright. Assume that there is 0.5 probability that Anne’s use would be found fair if she uses Bob’s photograph without his permission and a lawsuit ensues. Assume further that Bob typically demands $100 per license from users who wish to use his photograph. Anne, however, owing to her potential fair use claim, should be able to secure a license for $50—a price that reflects the strength of her fair use claim.

Now consider a different user, Carol, whose planned use of Bob’s work is slightly less transformative than Anne’s. The probability of Carol’s use being fair is only 0.3. Yet, all things being equal, she, too, should be able to receive a license from Bob for a lower price than his original asking price—$70, instead of $100. As we shall demonstrate throughout this Article, these examples are representative.

The same is true for a host of other transformative users—users who can claim that their derivative works bestow a significant benefit on the public, and users who appropriate only a small portion from copyrighted works. All of them have a certain individual probability of succeeding on a fair use claim when sued by the copyright owner. The license price each would be able to negotiate depends on the strength of their fair use claim, as well as on their bargaining power. But critically, each should be able to negotiate a license for a price lower than the asking price of the copyright owner. We use a formal model to demonstrate this result and identify its robustness over a wide range of scenarios. As we will show, even a small probability of obtaining a fair use ruling may well change the bargaining outcome between users and copyright owners.

The Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith decision that was recently issued by the Supreme Court provides a powerful example of our theory.¹² In this case, the Supreme Court had to determine whether fourteen unauthorized silkscreens and two unauthorized pencil drawings that were produced based on a Lynn Goldsmith photograph qualify as fair uses of the photograph.¹³ At the heart of the matter lies the definition of the term “transformativeness.” In rejecting the foundation’s fair use claim, the Court held that a transformative work must have a fundamentally different and new artistic purpose and character.¹⁴ This definition is clearly narrower than that endorsed by the Supreme Court in Campbell v. Acuff-Rose Music, Inc., according to which a transformative work is one that has a different purpose or conveys new message or meaning.¹⁵ The Supreme Court’s adherence to a rather narrow interpretation of transformativeness will carry far-reaching implications not only for the parties to the case, but also for a multitude of users who negotiate with copyright owners.

It bears emphasis that negotiation is often a prelude to litigation. In fact, many of the celebrated fair use cases, including Google LLC v. Oracle America, Inc.,¹⁶ Authors Guild, Inc. v. Google Inc.,¹⁷ and Campbell,¹⁸ were filed only after the parties tried, and failed, to negotiate a consensual agreement. Furthermore, even after a case is brought to court, the litigating parties attempt to negotiate a settlement while the case is pending. Indeed, such was the case in Oracle and Authors Guild. Naturally, not all negotiations result in a successful outcome, and some copyright disputes will inevitably end up in court. But it should be underscored that in any regular case, in which the existence of transaction costs does not hinder trade, the rightsholder-user negotiation becomes the primary apparatus for allocating use of copyrighted content; litigation is nothing but a complementary mechanism. This understanding implies that fair use theory must account for the doctrine’s impact on the negotiation process.

Our analysis shows that irrespective of its actual invocation in court, the fair use doctrine provides considerable benefits to users by improving their bargaining position. In economic parlance, the theory advanced by this Article views fair use as empowering significant categories of users by improving what negotiation theorists call the “best alternative to a negotiated agreement” (“BATNA”).¹⁹ By diminishing the BATNA of copyright holders and bolstering that of users, the fair use doctrine redesigns the licensor-licensee relationship to promote the use and distribution of copyrighted content.

The present Article thus conceptualizes fair use not as a mechanism that overcomes transaction-costs-related market failures, but rather, as a doctrine that rests the foundations for just and efficient bargaining framework. In this regard, we analyze the behavior of relevant economic actors that operate “in the shadow” of the fair use doctrine.²⁰

We develop our argument in accordance with the following structure. In Part I, we explain the fair use doctrine and discuss the theories that have been developed to justify it. In Part II, we introduce a new theory of fair use and explicate how it differs from the extant literature. In Part III, we present the normative attractiveness of our theory by highlighting its positive welfare and distributive implications. A short Conclusion ensues.

I. Fair Use: Law and Theory

A. The Fair Use Doctrine

The fair use doctrine made its first appearance in the U.S. in the 1841 case of Folsom v. Marsh.²¹ According to scholars, however, its origins are far more ancient. Professor Matthew Sag, for example, suggests that the fair use doctrine “predate[d] Folsom v. Marsh by at least 100 years.”²² Professor William Patry went even further and dated the doctrine back to the year 1710 when the Statute of Anne was enacted.²³ Other researchers trace the roots of the fair use doctrine to the common law and natural rights conceptions.²⁴

In 1976, the fair use doctrine was codified and became part of the Copyright Act. 17 U.S.C. § 107 (“section 107”), in which the fair use doctrine is enshrined, opens with a preamble that offers a non-exhaustive list of presumptively fair uses, including, “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.”²⁵ Then, it proceeds to enumerate four factors that courts ought to consider when making fair use determinations: “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; [and] (4) the effect of the use upon the potential market for or value of the copyrighted work.”²⁶

It is important to note that the codification of the fair use doctrine did not purport to change its nature as an equitable doctrine. In the accompanying House Report, Congress referred to the fair use doctrine as “an equitable rule of reason.”²⁷ The statutory formulation of the doctrine, therefore, preserved the flexibility and open-endedness that have become the hallmark of the fair use doctrine. As Judge Pierre Leval wrote in his 1990 classic article on fair use:

What is most curious about this doctrine is that neither the decisions that have applied it for nearly 300 years, nor its eventual statutory formulation, undertook to define or explain its contours or objectives. . . . [They] furnish little guidance on how to recognize fair use. The statute, for example, directs us to examine the “purpose and character” of the secondary use as well as “the nature of the copyrighted work.”²⁸

Even more remarkable was Judge Leval’s admission that although “courts have treated the definition of the doctrine as assumed common ground[, t]he assumption of common ground is mistaken. Judges do not dineshare a consensus on the meaning of fair use.”²⁹ Indeed, the courts’ inability to converge on a common understanding of fair use has frustrated copyright scholars, leading Professor Larry Lessig to conclude that the fair use doctrine amounts to nothing other than “the right to hire a lawyer to defend your right to create.”³⁰

While scholars have bemoaned the uncertainty that shrouds the fair use doctrine³¹ and, over the years, have advanced various proposals in order to cabin the unpredictability of fair use,³² in this Article, we take a different tack. We argue, contrary to conventional wisdom, that the inherent uncertainty of the fair use doctrine might actually help, rather than harm, users. The possibly virtuous effect of uncertainty has been overlooked by theorists as they have focused exclusively on the litigation arena. We, by contrast, are interested in the effect of fair use outside of the courtroom, in negotiations between copyright owners and users. We develop this argument fully in Part II of this Article, as part of our transactional model of fair use. But before elaborating on the potential virtues of uncertainty, it behooves us to complete our discussion of the development of the fair use doctrine and highlight some critical recent developments.

Four years after Judge Leval’s 1990 portrayal of fair use as a helplessly underminable doctrine, the fair use landscape was reshaped. The turning point was the Supreme Court’s 1994 decision in Campbell v. Acuff-Rose Music, Inc.. In finding 2 Live Crew’s version of Roy Orbison’s and Bill Dees’s copyrighted song “Oh Pretty Woman” a fair use, the Court stated that “the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.”³³ As we will show, lower courts were quick to follow the language and spirit of the Campbell opinion. Since Campbell, transformativeness has become the currency of the fair use realm.³⁴

The importance of transformativeness to fair use determinations was highlighted by Judge Leval in his classic article.³⁵ Yet, it was the Supreme Court’s endorsement of transformativeness in Campbell that officially conferred upon it an elevated status.³⁶ Subsequent cases have substantially increased the weight granted to transformativeness in fair use determinations. Among others, courts held that a challenged work is worthy of protection whenever it “contains significant transformative elements,”³⁷ is “sufficiently transformative,”³⁸ or is endowed with a “patently transformative character.”³⁹ It has been further emphasized that a central purpose of fair use investigations is to establish “whether and to what extent the new work is ‘transformative.’ ”⁴⁰ In other instances, courts submitted that copyright infringement, notwithstanding the commercial character of the work in question, may not be determined given that the original work is “used for a transformative purpose.”⁴¹

The effect of the rise of transformativeness can be best seen in the context of fair use cases involving appropriation art. Appropriation art is an art form predicated on the use of existing objects with subtle modifications.⁴² Cases on appropriation art include the Second Circuit’s famous Blanch v. Koons⁴³ and Cariou v. Prince.⁴⁴ In both cases, the court was persuaded of the sufficient transformation that the process of appropriation can embed. In Blanch, the court explained that Jeff Koons’s appropriation of Blanch’s photograph “was intended to be—and appears to be—‘transformative.’ ”⁴⁵ In Cariou, the court was more hesitant but nonetheless concluded that Richard Prince’s appropriating work “could be transformative even without commenting on Cariou’s work or on culture, and even without Prince’s stated intention to do so.”⁴⁶

A closely related development in fair use jurisprudence that can also be traced back to Campbell involves parodies. A parody is defined as a derivative work whose purpose is to criticize or comment on a preexisting copyrighted work.⁴⁷ After classifying 2 Live Crew’s unauthorized rendition of “Oh Pretty Woman” as a parody, the Court likewise ruled that parodic uses are especially transformative and therefore have an especially strong claim for fair use.⁴⁸ The Court added that copyright owners are unlikely to authorize parodies that are of unflattering commentary or mockery to their works,⁴⁹ and thus, the production of parodies critically depends on fair use.

The Supreme Court’s ruling in Campbell has been understood by lower courts and commentators to create something of a safe harbor for parodies.⁵⁰ As Professor Pamela Samuelson observed, “[n]otwithstanding the Court’s unwillingness in Campbell to presume that parodies are fair, every subsequent parody case has been adjudged a fair use.”⁵¹ For example, in Suntrust Bank v. Houghton Mifflin Co., the Eleventh Circuit ruled that Alice Randall’s “The Wind Done Gone,” a critical literary account of Margaret Mitchell’s “Gone With the Wind,” was a parody of the original and was therefore a fair use of it.⁵² Likewise, in Burnett v. Twentieth Century Fox Film Corp., the Court ruled that an audiovisual work produced by the creators of Family Guy, which poked fun at the figure of Carol Burnett, constituted a fair use on account of its parodic nature.⁵³ Similarly, in Brownmark Films, LLC v. Comedy Partners, the Seventh Circuit held that a music video by the creators of South Park which parodied the plaintiff’s music video has “obvious transformative value.”⁵⁴ Recently, the Second Circuit openly acknowledged that in the aftermath of Campbell, “parody, which ‘needs to mimic an original to make its point,’ . . . is routinely held transformative.”⁵⁵

Another line of cases, beginning with Kelly v. Arriba Soft Corp.,⁵⁶ highlighted another key determinant of fair use: social benefit. Importantly, this category, too, grew out of the Supreme Court’s Campbell decision, with its emphasis on transformativeness. In Campbell, the Court suggested that a “parody has an obvious claim to transformative value” because “it can provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one.”⁵⁷ The fair use cases that thrust public benefit to the forefront of the fair use analysis predominantly involved users from the technology sector. In Kelly, the Ninth Circuit ruled that the public display of photographs in the form of thumbnails as part of the operation of a visual search engine constituted fair use.⁵⁸ In reaching this conclusion, the court mentioned the benefit conferred on the public by the appellee’s search engine.⁵⁹ Approximately four years later, in 2007, in Perfect 10, Inc. v. Amazon.com, Inc., the Ninth Circuit was asked to revisit the issue, when an adult content company sued Google, alleging that its authorized display of its copyrighted photos as thumbnails in response to users’ searches constituted copyright infringement.⁶⁰ Finding that Google’s use was fair, the Ninth Circuit emphasized the “significant public benefit” of Google’s search system, explaining:

[A] search engine provides social benefit by incorporating an original work into a new work, namely, an electronic reference tool. Indeed, a search engine may be more transformative than a parody because a search engine provides an entirely new use for the original work, while a parody typically has the same entertainment purpose as the original work.⁶¹

The social benefit factor quickly found its way to the decisions of other circuits.⁶² It played an important role in the Second Circuit’s ruling in Authors Guild v. Google, Inc..⁶³ The case was brought after Google decided to establish a large, searchable digital repository of literary works by scanning the books in several libraries around the world, including the libraries of Harvard University, The University of California, Stanford University, The University of Michigan, Columbia University, Princeton University and the New York Public Library.⁶⁴ The goal was to allow users to search the content of the books, yet the content of books could not be copied and only snippets from books were displayed to users in response to their searches.⁶⁵ Nonetheless, after prolonged negotiations between the parties failed to yield a settlement, the Authors Guild sued Google for copious copyright infringements.⁶⁶ In reaching the conclusion that Google’s use was fair, the district court dedicated a full section of its decision to a discussion of the myriad public benefits arising from Google’s use.⁶⁷ On appeal, the Second Circuit affirmed the district court’s decision, awarding Google an important legal victory, but toned down the importance of the public benefits provided by Google.⁶⁸

The final imprimatur of public benefit as a key determinant of fair use was given by the Supreme Court in its 2021 decision in Google LLC v. Oracle America, Inc.⁶⁹ In a 6-2 decision, the Supreme Court ruled that Google’s unauthorized appropriation of 11,500 lines of Oracle’s Java Application Programming Interface (“API”) for the Android operating system constitutes fair use.⁷⁰ Writing for the majority, Justice Breyer noted the added value created by Google’s use for third parties:

Here Google’s use of the Sun Java API seeks to create new products. It seeks to expand the use and usefulness of Android-based smartphones. Its new product offers programmers a highly creative and innovative tool for a smartphone environment. To the extent that Google used parts of the Sun Java API to create a new platform that could be readily used by programmers, its use was consistent with that creative “progress” that is the basic constitutional objective of copyright itself.⁷¹

Importantly, it was not only the courts that helped dispel some of the doctrinal mist that enveloped the fair use doctrine for centuries. Academics, too, have managed to point to overarching principles that affect fair use determinations. Two such efforts are worthy of special note.

In two separate projects, the first published in 2008⁷² and the second in 2020,⁷³ Professor Barton Beebe empirically examined fair use case law to find correlations between various fair use factors and case results. His method allowed him to pierce the judicial rhetoric and examine which statutory factors are outcome determinative in fair use cases. In his 2008 article, which surveyed the opinions from all fair use cases issued between 1978 and 2005, Beebe noted that “[i]t appears . . . that courts and commentators have exaggerated the influence of transformativeness doctrine on our fair use case law.”⁷⁴ However, in his 2020 article that analyzed the opinions from all fair use cases issued between 2005 and 2019, Beebe reports that “while the transformativeness test appeared to be waning in influence by 2005, it has since recovered its previous level of influence, even in the lower-profile, workaday fair use opinions that make up the majority of the data.”⁷⁵ Along similar lines, Clark Asay, Arielle Sloan and Dean Sobczak have empirically established that if courts perceive a certain use as transformative, it would almost invariably qualify for fair use protection, which implies that transformativeness is essentially a sufficient condition for enjoying the fair use defense.⁷⁶ These recent findings suggest an important confluence between judicial rhetoric and reality.

The Supreme Court’s recent decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith⁷⁷ unfolded the most recent development in fair use jurisprudence. Issued in May 2023, the ruling is the first application of fair use in the arts and entertainment industry since the 1994 Campbell ruling. The Warhol case involves a series of Prince’s photos taken by photographer Lynn Goldsmith in 1981 to accompany a Vanity Fair article concerning Prince.⁷⁸ Unbeknownst to Goldsmith, the magazine solicited Andy Warhol to create a stylized painted version of the photograph that became known as the “Orange Prince” silkscreen.⁷⁹ Vanity Fair published the Orange Prince portrait in its November 1984 edition, and Goldsmith was co-credited for this work.⁸⁰ Orange Prince, however, was only one of sixteen painted versions created by Warhol, collectively known as Warhol’s “Prince Series.”⁸¹ Pursuant to its completion, the Prince Series has been routinely displayed in museums and galleries.⁸² After Prince’s passing in 2016, Condé Nast, the official publisher of Vanity Fair, published a commemorative magazine entitled “The Genius of Prince,” with the Orange Prince portrait embellishing its cover.⁸³ Alleging copyright infringement, Goldsmith argued that notwithstanding her initial 1984 licensing agreement with Condé Nast to use her photo one time as an “artistic reference,” she was unaware of the Orange Prince silkscreen—as well as of the Prince Series at large—until its reintroduction as part of the commemorative 2016 edition.⁸⁴

Once Goldsmith learned of the aforementioned facts, she brought an infringement suit against the foundation. The Southern District of New York granted the foundation’s motion for a preliminary ruling that Warhol’s work, though it incorporated Goldsmith’s photograph, was sufficiently transformative to qualify as a fair use.⁸⁵ The ruling was then overturned by the Second Circuit.⁸⁶ Finding that Warhol’s portrait incorporated no significant addition or alteration upon Goldsmith’s original photograph, the court concluded that the portrait was infringing.⁸⁷ In a 7-2 decision, the Supreme Court elected to affirm the Second Circuit’s conservative interpretation of transformativeness, thus rejecting the appeal and siding with Goldsmith.⁸⁸ The Warhol case thus marks a potential deviation from status quo interpretation of the fair use doctrine. We analyze the implications of the rulings to our theory in Part II, below.

The preceding discussion teaches that the Supreme Court’s approach to fair use has interjected a certain degree of certainty and predictability into the doctrine. This is not to say that fair use has become a clear doctrine—far from it—but it can be generally stated that in the aftermath of Campbell, parodic uses, sufficiently transformative uses, and uses that produce significant public benefits are likely to be found fair. As we will explain in Part II, the creation of these fair use clusters, or silos, is of vital importance to our theory of fair use. But before introducing our own theory of fair use, we must give credit to prior theorists and discuss their contributions. It is to this task that we next turn.

B. Theoretical Justifications of the Fair Use Doctrine

As befits a doctrine of its significance, scholars have advanced several theories to justify fair use. In this Section, we review the leading theoretical justifications of fair use. It should be emphasized at the outset that our goal is not to discredit other theories or even criticize them. As we will show, our theory of fair use complements existing theories by elucidating a central function of fair use that has hitherto evaded other scholars. The goal of the proceeding discussion is twofold: first, we wish to map the theoretical landscape of fair use, so we can precisely locate our own theory within it. Second, we seek to show how our justification of fair use interacts with the extant theoretic literature.

The most dominant theory has been put forth by Wendy Gordon.⁸⁹ In an immensely influential article, Gordon argued that the fair use doctrine is a mechanism for allowing the use of copyrighted content when voluntary transactions between copyright owners and users are barred by high transaction costs.⁹⁰ Specifically, Gordon postulated that fair use should be recognized when three cumulative conditions are met: (1) high transaction costs prevent consensual bargaining between copyright owners and users; (2) the unauthorized use is socially desirable; and (3) legitimizing the disputed use would not undermine incentives to create.⁹¹

To illustrate the operation of Gordon’s theory, imagine a student who wishes to quote a copyrighted manuscript. Assume that the author of the manuscript charges $20 for the requested use and that is also the maximum price that the student is willing to pay. However, transaction costs—defined as the cost of identifying the counterparty to the transaction, negotiating and formalizing an agreement with them, and enforcing the agreement—would bar the exchange from taking place. Under these circumstances, allowing the student to quote the manuscript without permission would make them (and society at large) better off without harming the author. The author, in our example, could not receive payment from the student, not because they refused to pay, but rather owing to the fact that the level of transaction costs made payment impossible. Hence, the author stands to lose nothing if the student’s use is considered fair and the student receives a benefit of $20. Society, too, is benefitted by the award of fair use to the student since the realm of creativity is enriched, while incentives to create future works are not harmed.

Gordon’s approach grounded fair use in economic theory, proving that the doctrine can be welfare enhancing when applied properly. However, the tie Gordon created between fair use and high transaction costs has proven to be a double-edged sword. As the title of her article, Fair Use as a Market Failure suggests, Gordon justified fair use as a means of overcoming a market failure in the form of high transaction costs. This was a great strength of Gordon’s theory, but also a potential weakness. Critically, Gordon’s theory established a direct correlation between the level of transaction costs and the cases in which fair use should be recognized. The problem is that improvements in telecommunications and computer technologies have dramatically lowered transaction costs since Gordon published her article in 1982, putting a lot of strain on Gordon’s theory. Critics of Gordon’s theory suggested that in an interconnected world, fair use has outlived its “raison d’être” and all uses must be secured via payment.⁹² It bears emphasis that Gordon responded to her critics by broadening and sharpening the role of market failure in her account. Yet, Gordon’s account remains inextricably related to the concept of market failure, and it conceives fair use as a mechanism that operates in non-transactional settings, i.e., settings in which voluntary transactions are vitiated.⁹³

A slightly different justification of fair use that complements Gordon’s original justification has been offered by Ben Depoorter and Francesco Parisi. Depoorter and Parisi correctly pointed out that technological advancements do not lower all transaction costs.⁹⁴ The problem of strategic holdouts remains, even in the face of technological advancements. The holdout problem is especially acute for users, such as creators of documentary works, who need to secure permission from multiple copyright owners. In such cases, each copyright owner possesses veto power over the planned use and may strategically exercise it to the detriment of users. The fair use doctrine allows users to carry out their creative projects despite strategic attempts by copyright owners to hamper the enterprise.⁹⁵ Depoorter’s and Parisi’s account is both persuasive and elegant, but “it potentially limits the usefulness of the market-failure theory to only cases in which a user must clear multiple rights and has no other alternatives.”⁹⁶

Two additional justifications of fair use focus on allocative efficiency. The first, associated with William Fisher, calls on courts to use fair use to promote the goals of copyright protections.⁹⁷ To this end, Fisher asks courts to think of all possible uses of copyrighted works. Then, for each use, he calls on courts to design what can be called an “efficiency ratio,” with the numerator representing the profit an author could realize if fair use is denied and the denominator representing the loss to society if the copyright owner refuses to license the work.⁹⁸ A high efficiency ratio suggests, per Fisher, that the use is probably unfair, while a low one indicates that the use is fair.⁹⁹ Fisher sets the cutoff at the use with the highest marginal aggregate social gain (gain to society from creation minus loss to society from monopoly control over uses).¹⁰⁰ As Fisher himself admits, his approach to analyzing fair use, at least with respect to some sorts of works, “is nearly coterminus [sic] with economic analysis of the copyright system as a whole.”¹⁰¹ Fisher likewise acknowledges that his approach is probably impractical in light of the informational burden it imposes on judges.¹⁰²

A different allocative justification, termed the “dual-grant theory” of fair use, was constructed by Professor Abraham Bell together with one of this article’s authors.¹⁰³ The dual-grant theory maintains that in designing our copyright system, Congress created two blocs of uses, allocating one to authors and the other to the public. Each group was given the uses which it values most. Accordingly, authors received “standard commercial uses,” while the public received “uses of highly dispersed social value,”¹⁰⁴ such as political speech, and uses that promote the pursuit of science, knowledge and truth.¹⁰⁵ By contrast to Fisher’s theory of fair use, which requires courts to make individual case-by-case determinations of fair use, the dual-grant theory calls on courts to make fair use determinations based on the category of uses to which the challenged use belongs. This, in turn, renders the approach a lot more practical but less precise compared to Fisher’s framework of analysis.

II. Fair Use as Licensing Leverage

As our discussion in Part I demonstrates, extant theories of fair use perceive it as a mechanism for bypassing the market and a substitute to owner-user bargaining. Importantly for the purpose of our analysis, all existing justifications of fair use focus exclusively on the courts. The underlying assumption in all four accounts is that fair use serves users exclusively in litigation or as a tool for overcoming negotiation breakdowns or high transaction costs that prevent negotiations from occurring ab initio.

The justification we develop in this Part focuses on the effect of fair use on enabling voluntary transactions between copyright owners and users. By contrast to prior justifications of fair use, we show that the main function of fair use is to facilitate bargaining, rather than replace it. We call this effect “the hidden function of fair use.” As we demonstrate, the fair use doctrine allows users to secure more favorable licensing terms from copyright owners. Importantly, our theory does not compete with any of the prior theories. Rather, it complements all four of them. This complementarity suggests that the effect of fair use is broader and deeper than previously believed.

A. The Theory

In their acclaimed bestseller on negotiation theory, Getting to Yes, Professors Roger Fisher and William Ury famously stress that “the relative negotiating power of two parties depends primarily upon how attractive to each is the option of not reaching agreement.”¹⁰⁶ They therefore submit that a sine qua non¹⁰⁷ for A’s bargaining advantage is that their benefit from a state of disagreement exceeds B’s, since, in such case, B would be willing to sacrifice more in order to reach an agreement, which diverts the terms of agreement formation in A’s favor. Normally, the party with the upper hand in a bargaining setting is the one who possesses a stronger BATNA.¹⁰⁸ To exemplify, suppose that A is interested in selling B a used car, which B values at $10,000. Realizing this, A can require up to $10,000 to secure an agreement between the two. Assume now that C offers a similar car for sale, in exchange for only $5,000. C’s entry affects the negotiations between A and B: the maximum price that B would be willing to pay for A’s car now drops to $5,000. C’s entry, by providing B with an alternative to negotiating with A, enhances B’s BATNA.

The fair use doctrine has a similar effect to that of C’s entry in the previous example: it elevates users’ BATNA and thereby confers upon them significant leverage in negotiations with copyright owners. A helpful way to see this effect of fair use is to think of it as a call option the law gives to users over copyrighted content with a strike price of zero if their use is found fair. Recall that a fair use finding means that a user is not only free to use copyrighted content without permission, but also that they are allowed to do so free of charge.

To illustrate, suppose that Ella, an artist, is interested in using Francine’s copyrighted work for a transformative purpose and contacts her to acquire authorization. Assume that Ella values Francine’s work at $8,000 and is willing to pay Francine up to this sum in order to secure authorization. If Ella were to use Francine’s work without permission, she would be sued for copyright infringement and a court would order her to pay Francine $10,000 in damages.¹⁰⁹

To see the effect of fair use on negotiation dynamics, consider first a world without fair use. In this world, users can only use copyrighted content permissively. Any attempt at bypassing the market would be remedied by damages, an injunction, or both. Under a legal regime that does not recognize fair uses, Ella has no feasible alternative to negotiating with Francine. Using the work without authorization is not a viable option from Ella’s perspective, as it represents a negative net value (-$2,000): while Ella would receive a benefit of $8,000 from her use, she ought to pay $10,000 in damages. Therefore, in economic parlance, Ella has no credible threat of using without authorization: both parties know that if negotiations fail, Ella will just have to forgo her planned use. Consequently, Ella is willing to pay any price up to $8,000 (her valuation of Francine’s work), eliciting a positive benefit, instead of zero. Francine, in turn, would take advantage of her monopolistic status as an exclusive rightsholder and accord by setting up an asking price of $8,000—the maximum Ella is willing to pay.¹¹⁰ In such a world, therefore, Ella confronts an asking price of $8,000, which means that Francine gets to pocket the entire bargaining surplus.

Now consider a world with fair use. Assume that, given the high transformativeness of Ella’s intended use, there is a 0.5 probability that a court will find the use fair. This means that if negotiations fail, Ella is better off using Francine’s work without authorization than with forgoing the use: using the work without permission provides her with a benefit of $8,000 while the expected costs are only $5,000 (0.5 × $10,000 = $5,000). Critically, the introduction of fair use changes the expected value of unauthorized use from -$2,000 to $3,000 ($8,000 – $5,000). The existence of the fair use doctrine, thus, dramatically empowers users vis-à-vis copyright owners. This implies that Ella’s threat of using Francine’s work without permission becomes credible: if Francine’s asking price would exceed $5,000, Ella would walk off the negotiation table and use the work without authorization. This is because any asking price that crosses this threshold makes her benefit from authorization less than $3,000, which should lead her to refuse to pay this amount and, instead, use the work without authorization. In such a world, therefore, Ella confronts an asking price of $5,000.¹¹¹ We summarize the results of our examples in Table 1, below.

Table 1. The Effect of Fair Use on Users’ Licensing Leverage
World	Ella’s Benefit from Using	Expected Cost of Unauthorized Use	Expected Value of Unauthorized Use	Ella’s Value of Not Using	Ella’s BATNA	Francine’s Asking Price
Without Fair Use	$8,000	$10,000	-$2,000	0	Non-existent	$8,000
With Fair Use	$8,000	$5,000	$3,000	0	Increased	$5,000

Assume next that Ella’s desired use is not only highly transformative, but a clear parody, thus representing a 0.8 probability of a fair use finding by a court. In that case, there is only a 0.2 probability that a court will find Ella liable for copyright infringement and award Francine damages. This, in turn, renders the expected value of unauthorized use for Ella even higher: $8,000 – 0.2 × $10,000 = $6,000. In light of this fact, Ella will never accept any asking price that surpasses $2,000. Realizing this, Francine would agree to license the work to Ella for $2,000. The results are summarized in Table 2.

Table 2. The Effect of Increased Fair Use on Users’ Licensing Leverage
World	Ella’s Benefit from Using	Expected Cost of Unauthorized Use	Expected Value of Unauthorized Use	Ella’s Value of Not Using	Ella’s BATNA	Francine’s Asking Price
With Increased Fair Use Probability	$8,000	$2,000	$6,000	0	Further increased	$2,000

The logic that underlies this finding is as follows. When facing a copyrighted work, any user entertains a trichotomous choice: (1) they may pay a licensing fee and use the work unhinderedly; (2) they may avoid using it altogether; or (3) they may refrain from licensing, use the work without acquiring authorization, and face the expected costs of a copyright infringement lawsuit. Users’ BATNA essentially depends on the feasibility of the third alternative. Herein lies the significance of fair use. Fair use bestows upon users the power to credibly threat to use copyrighted content without authorization and thereby leads rightsholders to adjust their asking price downwards. A world without fair use, by contrast, would allow any rightsholder to prevail in an infringement suit against any unauthorized user, which obviates the user’s third alternative. In such a world, users are left with options (1) and (2): they can either pay copyright owners the licensing fees they post or refrain from using the work altogether.

The fair use doctrine not only engenders alternative (3) but also makes it viable. As in the example discussed above, knowing that Ella reaps a positive expected value of $3,000 from unauthorized use, Francine realizes that for any asking price that exceeds $5,000 (leaving Ella with a benefit of less than $3,000), Ella has a credible threat of not taking the deal and using the work without permission.

B. The Model

Our theory can be generalized in a simple formal fashion. Let v denote a given user’s valuation of a given copyrighted work. Let A denote the owner’s asking price. A is the maximum licensing fee that the user finds attractive, i.e., the maximum price under which the user does not have a credible threat to engage in unauthorized use as a substitute for acquiring authorization. Denote by p the probability that a court will find that the user’s unauthorized use is protected by the fair use doctrine, and denote by D the damages the court is expected to award the rightsholder if fair use protection is not granted.

The owner’s asking price is given either by the user’s valuation of the work, v, or, if the user obtains a positive expected value from an unauthorized use (namely, if v – (1 –p)D > 0), by deducting this sum from v:

Note that in a world without fair use, p = 0. This means that if v < D, namely, as long as the court is expected to award damages that exceed the user’s valuation of the copyrighted work, unauthorized use is never a worthwhile alternative to licensing. The user thus possesses no leverage vis-à-vis the owner, and the latter will therefore require payment of v, the user’s valuation of the work, in order to grant authorization.

The fair use doctrine invariably increases the expected value of unauthorized use: raising the value of p from p = 0 to p > 0, which results in a higher p – (1 –p)D. Furthermore, for some threshold values of and , it increases v – (1 –p)Dto satisfy v – (1 –p)D > 0, and in such case, the existence of the fair use doctrine results in positive expected value from unauthorized use. From the user’s perspective, this means that v > (v – (1 –p)D), and thus A, their negotiated authorization price, decreases. Figure 1 exemplifies the relationship between A, the asking price, and p, the probability of fair use, for given values of v and D that uphold D > v.

Figure 1. The Effect of Fair Use on Copyright Pricing

This stylized model unfolds the technical bargaining mechanism that underlies our theory. Thus far, the accepted lore perceived fair use as offering users an effective bypass from licensing negotiations—but this statement can be confidently made only when fair use is granted with certainty (p = 1), which is hardly the regular case. The model emphasizes that even under the conventional setting where a fair use ruling is uncertain, the doctrine plays a critical role in the market for copyrighted content—the uncertainty translates into decreased asking price by monopolistic rightsholders, hence advantaging users’ bargaining standpoint.

We now turn to introduce evidence from licensing practices that supports our theory, and then we discuss the normative implications.

C. Illustrations

Our theoretical exposition of the hidden function of fair use finds support in real world cases. In this Section, we provide various examples that substantiate our theoretical predictions. These cases show that users are aware of the bargaining leverage they can get from the fair use doctrine and take advantage of its more favorable licensing terms.

Oracle and the Future of Licensing in Technologies

As noted, our theory likewise applies to providers of technological applications that generate a benefit to the public. A case in point can be found in Justice Thomas’s dissenting opinion in Google LLC v. Oracle America, Inc..¹¹² In support of his view that Google’s use of Oracle’s code was not fair, he noted that Google’s use created a reality where “device manufacturers no longer saw much reason to pay to embed the Java platform.”¹¹³ Justice Thomas proceeded to emphasize that:

[B]efore Google released Android, Amazon paid for a license to embed the Java platform in Kindle devices. But after Google released Android, Amazon used the cost-free availability of Android to negotiate a 97.5% discount on its license fee with Oracle. Evidence at trial similarly showed that right after Google released Android, Samsung’s contract with Oracle dropped from $40 million to about $1 million.¹¹⁴

The sharp decline in Oracle’s revenues from licensing its Java code provides a powerful illustration of the impact of fair use on market transactions. As the figures show, the bargaining leverage of Oracle in all of its licensing transactions critically depended on the licensees’ assessment of the strength of Google’s actual fair use claim and their own hypothetical fair use claims. For although Google was at the forefront of this legal battle, many other technology companies were similarly situated to Google insofar as their status as fair users.¹¹⁵ As the sentiment that Google would prevail gained purchase among technology companies, the revenues of Oracle sharply decreased, precisely as our theory predicts.

In analyzing the Supreme Court’s decision, commentators have noted that “[i]n the future, this decision may prompt more disrupters to use fair use as a shield in releasing new products or services that build off of older functional technologies, or otherwise influence negotiations as some potential licensees may find the value of certain functional code to be devalued by the Oracle.”¹¹⁶

Documentary Filmmakers

Copyright scholars tend to refer to the documentary filmmakers’ population as a primary beneficiary of fair use. Documentary filmmakers must incorporate prior works, many of which are subject to copyright protection. Hence, the fair use doctrine is critical to the operation of the industry. It may come as no surprise, therefore, that documentary filmmakers are cognizant of their ability to leverage on fair use in negotiations with copyright owners. A 2020 study by the Center for Media and Social Impact (“CMSI”) concerning the state of the documentary field¹¹⁷ indicates that 76% of all participating U.S. documentary directors and producers have utilized or leveraged the fair use doctrine in the making of their most recent film.¹¹⁸ This corresponds to other surveys, wherein 70% of the filmmakers have rated their understanding of fair use as “good or excellent,”¹¹⁹ while 73% of those with more than a decade of experience found fair use a “very useful” doctrine.¹²⁰ Likewise, an elaborate manual published by the Archive Valley company, which provides archival services for documentarists, introduces the underlying strands of fair use by explaining to authors that “if you meet the fair use guidelines . . . you can use footage for free,” but complements this straightforward statement by informing authors that “[e]ven if you know that you do want to license footage, knowing your rights about fair use can put you in a stronger negotiating position.”¹²¹

Finally, it seems that the leverage fair use bestows upon filmmakers changes the boundaries of the bilateral owner-user bargaining. Crucially, a strong fair use claim appears to pave authors’ way to efficiently negotiate with relevant third parties, too. In this regard, 95% of filmmakers have reported to persuade broadcasters regarding the applicability of fair use to their case when equipped with a lawyer’s letter.¹²² 99% responded identically when asked about negotiations with insurers.¹²³ This means that fair use not only leverages users when bargaining with rightsholders, but, as importantly, alleviates the entire chain of negotiations necessary for pursuing one’s artistic vision.

Parodies and Satires

The story of the musician “Weird Al” Yankovic, who is known for his humoristic commercial adaptations of popular music, provides yet another real-world example of the effect of ambiguity on broadening the population of users that can enjoy increased licensing leverage in light of fair use. Whether Yankovic’s spoof songs are in fact parodies¹²⁴ or satires¹²⁵ is a controversy that has never been, and probably never will be, settled, as Yankovic always acquires authorization from the owners of the rights to the original songs¹²⁶—be it because of industry norms¹²⁷ or in order to be on the “safe side” of copyright law. Interestingly, however, Yankovic’s practice has been described as “[l]icensing [w]ith [l]everage.”¹²⁸

Yankovic, whose parodic use adjoins satire, bargains for authorization under a fairly reasonable possibility of fair use protection. And Yankovic is not alone. Other artists who produce adaptations of copyrighted works have the same leverage that he does: they possess a colorable fair use claim.

It should be underscored that this broadening effect is not limited to musical adaptations. Rather, it applies to copyrighted subject matter categories, from videoclips to literary works. As importantly, the effect is not confined to adaptations that straddle the line separating parodies and satires. In the case of transformative uses, the effect is much broader. Consider, for example, the case of Gregg Gillis, better known as the popular D.J. Girl Talk, whose foremost artistic contribution has been described as “mak[ing] danceable musical collages out of short clips from other people’s songs.”¹²⁹ Gillis insists that his sampling work is protected by the fair use doctrine, and therefore, as opposed to Yankovic, he consistently refuses to solicit authorization from rightsholders to the original works.¹³⁰ Markedly, while many have accused Gillis of infringing upon their exclusive rights, a lawsuit has yet to be filed.¹³¹ In short, thus, it appears that both Gillis and his accusers believe that the musician enjoys a solid case, garnering a sufficiently high fair use probability that in turn nullifies the credibility of threats to sue. This translates into a reservation price of zero.

Warhol and the Future of Transformativeness

Another exemplification of the utilization of the transformativeness threshold into licensing leverage can be driven from Cariou v. Prince, in which the Second Circuit defined transformativeness as any alteration of the original’s “expression, meaning, or message,” finding that even appropriation art can be considered fair use.¹³² Under this expansive definition of fair use, any user who adapts a work can raise a fair use defense. Obviously, not every adaptation would be ruled fair. Similarly, not every appropriation artist will meet the same faith as Richard Prince. But every transformative user has bargaining leverage thanks to this broad definition.

As noted, however, the Supreme Court’s recent decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith diverges from preceding rulings on transformativeness that advantaged users, and it seems to reallocate bargaining power between users and rightsholders.¹³³ Owing to Warhol, we might confront a shift toward a new era that introduces a new equilibrium in the market for copyrighted content.

Notwithstanding their absence from both popular discourse and academic scholarship on fair use, the Justices—both members of the majority and dissenters—were far from oblivious to this outcome. First, this understanding manifests in Justice Sotomayor’s articulation of the majority opinion. Justice Sotomayor first warns us that the broad interpretation of transformativeness would favor users with utterly disproportionate leverage over the original rightsholder. Upon recognizing that transformativeness “is a matter of degree,”¹³⁴ Justice Sotomayor maintains that:

[Holding for the Plaintiff] would potentially authorize a range of commercial copying of photographs, to be used for purposes that are substantially the same as those of the originals. As long as the user somehow portrays the subject of the photograph differently, he could make modest alterations to the original . . . and claim transformative use.¹³⁵

Justice Sotomayor’s words implicitly capture our theory, acknowledging the simple fact that the degree of transformativeness that suffices for the Court to bestow a fair use defense would shape market interactions between owners and users. Determining that changes reminiscent to those made by Andy Warhol are not significant enough to meet this threshold, particularly when the use is of commercial nature, Justice Sotomayor precludes users from leveraging a fair use claim and consequently—when viewed via an economic lens—submitting that their intended use does not deserve a reduced licensing fee.

More explicit are the statements made in Justice Kagan’s dissenting opinion. Justice Kagan distinctly highlights the pivotal role of the Supreme Court in allocating bargaining surplus between owners and users, noting that by refusing to side with Warhol’s deeds, the Court would frustrate users’ ability to license under favorable terms:

Still more troubling are the consequences of today’s ruling for other artists. If Warhol does not get credit for transformative copying, who will? And when artists less famous than Warhol cannot benefit from fair use, it will matter even more. . . . [A]s our precedents show, licensors sometimes place stringent limits on follow-on uses, especially to prevent kinds of expression they disapprove. And licensors may charge fees that prevent many or most artists from gaining access to original works.¹³⁶

The transactional role of the fair use doctrine and its effect on licensing negotiations has been properly identified and adequately considered. Despite that, the Court has upset the longstanding understanding of market actors, potentially requiring the market to form a new equilibrium that is less favorable to users. This leads us to conclude that the reallocation of bargaining power that we expect to witness in the near future—together with the inevitable increase of copyright pricing—is the Court’s fully conscious decision, rather than an unforeseen economic side effect.

III. Normative Implications

In this Part, we explain how the licensing leverage created by fair use ameliorates the efficiency losses and inequities associated with copyright protection. In particular, we demonstrate the doctrine’s ability to increase the number of voluntary transactions between copyright owners and users and to redistribute wealth from rightsholders to users.

A. Countervailing Allocative Inefficiencies

Being quintessential public goods, intellectual works cannot be supplied efficiently by the free market.¹³⁷ In the absence of a legal prohibition on copying, users would be able to copy expressive works with impunity. In such a world, the market price of copyrighted works would rapidly drop to zero, and so would the incentives to create and supply intellectual goods. Unable to recoup their initial investment in the creation of original content, authors may well decide to put their creative skills to rest. The need to maintain authors’ incentives to create warrants legal intervention that would grant them exclusive control over the distribution of their works.¹³⁸

Yet, the legal exclusivity copyright law bestows upon authors creates several costs. Chief among them is monopolistic pricing.¹³⁹ Two major effects are customarily attributed to monopolistic pricing: allocative inefficiency and distributional inequity.

The allocative inefficiency arising from exclusivity is well established.¹⁴⁰ Monopolistic pricing invariably creates a deadweight loss.¹⁴¹ This loss emanates from the fact that some consumers who were willing to pay the competitive price for the good or service would not be able to pay the higher, monopolistic price, and would simply forgo the good or service. As a result, certain welfare-enhancing transactions that would have occurred in a competitive market would not take place under monopolistic pricing.¹⁴² To illustrate, suppose that a good is offered by a monopolistic manufacturer for $20. Assume, however, that had the production process been perfectly competitive, the same good would have been offered for a price of $12. In this example, the deadweight loss is represented by the foregone transactions of the buyers who value the good at more than $12 but less than $20. As economist William McEachern points out, this phenomenon “is called the deadweight loss of monopoly because it is a loss to consumers but a gain to nobody.”¹⁴³

Perhaps even more worrisome than its adverse effect on allocative efficiency is the distributional inequities imposed by monopolistic pricing. Since the monopolistic price is higher than the competitive price, it works to transfer wealth from consumers to the monopolist. Monopolistic pricing, in other words, allows monopolists to capture consumer surplus.¹⁴⁴ To see this, let’s return to the above example, and consider a consumer who values the good at $22. Recall that the monopolist sets the price at $20, whereas in a competitive market, the price of the good would be $12. Under perfect competition the consumer would have paid $12 for the good, thus deriving a surplus of $10 ($22 – $12) from the transaction. Under monopolistic pricing the surplus of the consumer shrinks to $2 ($22 – $20), with the $8 lost to the consumer being transferred to the monopolist—all relative to a competitive market.

To understand how fair use remedies the allocative inefficiencies resulting from the exclusivity granted by copyright protection, consider a copyright owner who offers their work for a fixed license fee, which represents the profit-maximizing amount for them. As opposed to the general analysis unfolded in Part II, we now assume that, for whatever reason, price differentiation is impracticable from the rightsholder’s perspective.¹⁴⁵ Our theory submits that under such circumstances, the mere existence of fair use for certain users creates a positive externality for other users who have no fair use claim.¹⁴⁶ In this respect, the number of voluntary transactions may increase, decline, or remain unchanged, but what bears emphasis is that fair use avails the entire universe of users, including those users who would never persuade the court that their use is considered fair.

To see this counterintuitive outcome, suppose that the relevant users are five parodists and two satirists. For this example, assume that the parodists’ valuation of using the work is $10,000, while the satirists’ valuation is, say, $6,000.¹⁴⁷ For simplicity’s sake, assume that the damages in case of infringement are likewise $10,000. It is easy to see that if the monopolist has to determine a fixed, undifferentiated asking price, this price will be either $10,000 (thus authorizing only parodists) or $6,000 (thus authorizing all users, satirists included). The profit-maximizing price in that case is $10,000, since 5 × $10,000 > 7 × $6,000. Therefore, only parodists manage to obtain authorization from the owner, while satirists are precluded from using the work in light of their unwillingness to pay $10,000, neither as licensing fees nor as damage awards.

Things change dramatically, however, in a world with fair use. To begin, suppose any parodist holds 0.5 probability of obtaining a fair use ruling in their favor, whereas satirists have no chance of convincing the court that they are entitled to a fair use ruling. But note, while satirists will rarely enjoy a fair use ruling in their favor, they in fact manage to obtain user authorization in a world in which the fair use doctrine exists. In this world, the owner can never sell at $10,000: if they were to stick to this asking price, all parodists are incentivized to use the work without permission, as the expected value of using without authorization is $5,000 (0.5 probability multiplied by $10,000 in damages). Therefore, the two relevant pricing schemes are either $6,000 (authorizing only satirists) or $5,000 (authorizing all users). The

rightsholder is expected to set an asking price of $5,000 since 7 × $5,000 > 2 × $6,000.¹⁴⁸

If, on the other hand, any parodist holds 0.9 probability of obtaining fair use, this increased probability simply results in the rightsholder focusing exclusively on negotiations with satirists, setting an asking price of $6,000 as 7 × $1,000 < 2 × $6,000.

Interestingly enough, this example illustrates not our primary argument that fair use bolsters users’ bargaining power, but rather, that if rightsholders are subject to a fixed licensing fee, the doctrine may avail even users with zero probability of obtaining fair use protection. The hitherto undiscussed impact of fair use on copyright pricing allows them to enjoy copyrighted content they would not have in a world without fair use.

It should be noted that while parodists in the latter example will not be willing to pay the fixed price required by the rightsholder for authorization, they will manage to reach a favorable settlement if the copyright owner decides to sue them for infringement. Due to their enhanced probability of enjoying a fair use ruling, a settlement agreement is expected to feature extremely low payment on their behalf.¹⁴⁹

B. Redistributing Bargaining Surplus

In addition to improving allocative efficiency by increasing the number of users who enjoy owner authorization, fair use also has the effect of ameliorating the distributive distortions arising from copyright protection. As already noted, without fair use, rightsholders are positioned to capture the lion’s share of the users’ bargaining surplus by setting up prices that approximate users’ maximal valuations. In our previous example, even the five parodists who are willing to pay $10,000 for the right to use a work would have to fork over to the copyright owner—who sets an asking price of $10,000—all of their bargaining surplus.

This unfortunate outcome exemplifies monopolistic holdout. More specifically, monopolistic rightsholders manage to extract increased payments particularly from those users who consider the work extremely valuable. Pertinent examples include young technological entrepreneurs who are in need of particular copyrighted software in order to advance their startup initiative, or documentary filmmakers at the dawn of their career who are required to negotiate with a myriad of rightsholders in order to actualize their cinematic vision.

These users, and others, confront a significant barrier erected by copyright owners, who strategically hold out to extract exorbitant licensing fees. On our theory, the fair use doctrine counterbalances such strategic behavior. In addition to improving licensing terms for all users who possess a fair use claim (and, as exemplified earlier, even for those who do not), the doctrine helps reduce monopolistic holdouts in negotiations. This insight is not merely theoretical. It can be seen at work in the aftermath of the Supreme Court’s recent decision in Google LLC v. Oracle America, Inc..¹⁵⁰ The ruling has won commentators’ accolades for lowering entry barriers for smaller startup initiatives: consistent with our analysis, the ruling eroded the strategic incentive of powerful software owners to prevent smaller competitors, seeking interoperability with industry standards, from entering the market.¹⁵¹ Smaller developers can currently draw on the Google decision to acquire what is needed from a preexisting application programing interface, to provide consumers an innovative, transformative technological program.¹⁵²

The Warhol decision withheld the user-advantaging trend that bestows fair use protection even on mildly transformative users. Ample criticism has been directed against the Court since the decision was handed, primarily spotlighting the confinement of artistic freedom inevitably imposed by their ruling.¹⁵³ But one crucial aspect keeps eluding the commentators. As our analysis shows, the Court’s decision not only restricts artistic expression, but also diminishes the bargaining power of users in negotiations with rightsholders and thereby increases the price of copyrighted content. A narrow view of fair use makes one miss this aspect.

C. The Role of Damage Awards

To equip users with the full force of fair use, it is imperative to ensure that other copyright law doctrines may chill the effect this Article identifies. In particular, exaggerated damage awards may undesirably offset the economic virtues of the fair use doctrine. This is an especially grave concern in the copyright domain, as copyright owners typically sue for statutory damages. As Ben Depoorter noted, “[o]nce infringement has been established, a plaintiff may elect a statutory damage award. In doing so, 17 U.S.C. § 504(c) of the 1976 Copyright Act relieves the copyright holder from the burden of providing any evidence whatsoever of actual harm. Among developed Western democracies, the U.S. copyright statutory framework is exceptional.”¹⁵⁴ Indeed, under the current regime, statutory damages for watching an illegal livestream may amount to $150,000.¹⁵⁵ Oren Bracha and Talha Syed have similarly pointed out that “[t]he most troubling [aspects of statutory damages] are those cases in which massive supracompensatory damages are inflicted on ordinary individuals who are unable to spread the impact of such awards through limited liability or dispersed ownership.”¹⁵⁶

Apart from the usual pitfalls scholars associate with excessive copyright damages—namely, overdeterrence and suboptimal use of copyrighted works—we wish to emphasize its adverse impact on the licensing leverage that fair use provides to users. To see this, return to the main example on which we draw to convey our conception of fair use. Assume that rather than $10,000, Francine is expected to enjoy $50,000 in damages if she prevails in court. In this scenario, as in the case in a world without fair use, Ella is devoid of any feasible alternative to negotiations: the value of unauthorized use to her is 0.5 × (-$50,000) + $8,000 = -$17,000, which means that even in a world with fair use, she has no credible threat of using Francine’s work without authorization. Under these circumstances, the fair use doctrine does not bestow upon Ella a credible threat (and licensing leverage thereof) as long as her probability of prevailing in court falls short of 0.84.

By the same token, courts’ commitment to relatively modest awards is expected to significantly enhance the impact of fair use on users’ bargaining standpoint. Modest awards imply that even a user with a low probability of persuading the court of their entitlement to fair use will enjoy licensing leverage in negotiations with copyright owners. Taking this idea to the extreme, suppose that Francine is expected to be awarded $5,000 if she prevails in court. Recall that Ella values the use of Francine’s work at $8,000. In this case, Francine’s a-priori asking price is reduced irrespective of fair use: even without the doctrine, Ella will not be willing to pay any licensing fee that surpasses $5,000, since this would make unauthorized use more beneficial. Under the fair use doctrine, this price will drop even further.

Excessive damage awards imply that even users with a strong fair use claim might rationally refrain from an unauthorized use to avoid the insurmountable expected loss in future copyright litigation. We, therefore, call upon judges and legislators to determine damages in copyright cases when accounting for the possible erosion of users’ negotiation standpoint. In other words, we submit that by exhibiting restraint in the determination of damages, decisionmakers can bolster the hidden function of fair use; yet, by superfluously awarding damages to rightsholders, they might nullify this function in its entirety.

D. The Latent Virtue of Ambiguity

Our theory of fair use also puts ambiguity in a different light. A recurring criticism of the fair use jurisprudence concerns its uncertainty. The ambiguity of the fair use doctrine has been accused of overdeterring individuals from using copyrighted content. As James Gibson argued, even users with a strong fair use claim may rationally elect to license copyrighted content or refrain from using it altogether in order to avoid the inherent uncertainty that attends the fair use doctrine.¹⁵⁷ Losing on a fair use claim comes at a high price: a court may order the unlucky defendant to pay high statutory damages. Anticipating this, users may rationally choose not to assert their fair use claim in court, and instead, buy a license from the copyright owner. Gibson termed this dynamic “rights accretion.”¹⁵⁸ Furthermore, he described it as an ongoing process by which copyright holders broaden the scope of their protection.¹⁵⁹

Our theory points to a potentially countervailing effect. The uncertainty that characterizes the fair use doctrine may actually help users in negotiations with copyright owners. This is because the inherent ambiguity embedded in the fair use doctrine enhances the licensing leverage of users, relative to a bright-line-rule fair use doctrine. To demonstrate the argument, we first provide a brief description of the ambiguity inherent in extant fair use jurisprudence, and then we point out its advantages compared to a world in which the fair use ambiguity does not exist.

In its current form, the fair use doctrine is an open-ended standard, rather than a rule.¹⁶⁰ As the time-honored distinction suggests, rules are well-defined legal commands that offer a precise definition of a proscribed action or conduct. Conversely, standards are legal provisions that employ a more general, obscure description, thus subjecting the lawfulness of a particular behavior to judicial discretion ex post. While standards allow the legal system to function with greater flexibility, rules provide actors with a greater degree of clarity and certainty. As has been noted before:

[T]he ex post guidance provided by courts is often confined to the specifics of the case at hand and does little to clarify the realm of legitimate behavior for other actors. The unpredictability associated with standards affects not only wrongdoers, but also law-abiding citizens who wish to act in accordance with the law but cannot readily discern what acts are permissible.¹⁶¹

As noted above, fair use is a prototypical standard.¹⁶² Fair use jurisprudence is ridden with terms that may purport to be synonymous to fair use, but in fact provide little or no ex ante clarity with respect to their applicability to a given case. Parodic use, for example, was tautologically defined by the Supreme Court as anything that may be reasonably perceived as a parody.¹⁶³ The concept of transformative use has likewise eluded any consistent definition,¹⁶⁴ and the “public benefit” test, to which courts increasingly reference, is inherently uninformative.¹⁶⁵ All of this implies that even when the user possesses a strong claim, fair use protection is hardly guaranteed. Nor can it be completely ruled out even in the presence of users with relatively weak claims. In its current conception as a quintessential standard, therefore, the user and the owner confront a given probability that fair use will be recognized. But as noted earlier, this probability—created by the malleable, open-ended environment in which fair use determinations are being made—may render a user’s threat of resorting to unauthorized use credible, which in turn creates a favorable bargaining framework that allows them to secure authorization with reduced licensing fees.

To see this, compare the current fair use regime with an alternative hypothetical regime in which fair use is governed by rules, namely, all permitted uses are well-defined on an ex ante basis. This alternative design leaves no room for uncertainty as to the defense’s applicability: the probability that fair use will be recognized in a given case is either zero or one. While allowing clarity and complete reliance, we wish to stress the adverse effect that such dichotomy carries on parties’ bargaining. Begin with cases wherein fair use will be conferred upon users with complete certainty. It is evident that whenever a fair use ruling is guaranteed, users are unwilling to pay for licensing, and negotiations will never take place. On the other hand, if there is no chance for a user to enjoy a fair use judgment, they are essentially confronting a world without fair use, hence the doctrine fails to bestow licensing leverage upon them.

This comparison of a standard-based versus rule-based fair use illuminates the surprising virtue of the current design of the fair use doctrine. To be sure, each user individually, if asked, would say they prefer to obtain fair use with certainty, but the actual comparison that needs to be considered here is whether, behind a veil of ignorance, the right to use copyrighted content without permission should be allocated with certainty to a distinct, small class of users, or with uncertainty to a class of a broader scope. Users may reasonably subscribe to the latter. As noted earlier, a well-defined fair use doctrine not only allows fewer users to invoke the right in court, but more importantly, it also deprives all the rest from the licensing leverage they would have enjoyed under uncertain fair use, thereby subjecting them to the choice of paying the monopolistic asking price or avoid using.

Indeed, the current design of fair use facilitates a bargaining framework in which users enjoy discounts in asking prices on account of the possibility of a future fair use judgment in their favor. Conversely, a clearly and fully specified fair use doctrine will have no effect on owner-user bargaining: it advances fair use as a mere substitute to negotiations, rather than a complement. If parties foresee a fair use ruling with probability 1, bargaining will not take place; if a fair use judgment is not feasible, then parties essentially reside in a world without fair use, and the doctrine does not therefore impact their negotiated licensing terms. Either way, predicating the fair use doctrine as a system of well-defined bright line rules precludes its function in assisting users.

This insight corresponds to a handful of scholarly works that have stressed the merit of standards, compared to rules, at facilitating trade. The 1995 works of Jason Scott Johnston,¹⁶⁶ and Ian Ayres and Eric Talley,¹⁶⁷ have independently demonstrated that when it comes to bargaining over an entitlement, uncertainty is bliss. Both articles showed that standards have the effect of splitting entitlements between parties, which thereby enhance bargaining and negotiations. When entitlements are split, each party can buy or sell their share of the entitlement to the other.¹⁶⁸ The same is true of fair use. Fair use has the effect of splitting rights in expressive content between rightsholders and potential fair users.¹⁶⁹ Accordingly, in negotiations between them, the copyright owner sells to the potential fair user the right to use the work while the potential fair user sells away their privilege to assert fair use.

Interestingly, fair use’s ambiguity not only aids users with a strong fair use claim, but it also broadens the scope of user population that enjoys licensing leverage. To see this, consider the widely accepted distinction between parodies and satires, which prevails since Campbell.¹⁷⁰ Traditionally, it has been argued that this distinction favors parodists by exempting them from any authorization requirements, while disadvantaging satirists who enjoy no similar privilege.¹⁷¹ But this argument, too, overlooks the hidden benefit that users at large—parodists and satirists alike—can reap from fair use. To see this, it is necessary to take a step back and picture a world without fair use protection granted to parodies. In such a world, the author of the original work holds the upper hand by exercising complete control over the licensing process and can exclusively decide which subsequent works to authorize. The vestment of fair use privileges on parodies spills over to hybrid works that combine critical commentary on the original work as well as more general statements that amount to satire.¹⁷² This, in turn, means that satirists, too, reap some benefit from fair use. The effect of fair use on satirists is never zero. Because there is no clear distinction between parodies and satires, the fair use doctrine—on account of this very ambiguity—bestows bargaining leverage not only on parodists, but also on satirists.

Conclusion

In this Article, we uncovered a crucial, yet overlooked, function of the fair use doctrine: the empowerment of users in negotiations with copyright owners. The fair use doctrine endows users with a credible threat to leave the negotiation table and use the work without permission. This credible threat allows users to force copyright owners to lower their licensing fees, thus enhancing the total number of uses and increasing the share of the bargaining surplus kept by users. Our theory maintains that the principal effect of fair use is to facilitate market transactions involving copyrighted content, and not to bypass them as other theorists have suggested. Our analysis thus shows that the impact of fair use in the copyright domain is far greater than previously thought. Importantly, our theory of fair use is fully consistent with preexisting scholarly contributions; it complements them, not competes them. The addition of our theory to the existing literature on fair use demonstrates the full prowess of fair use in protecting users interests and needs in the copyright world.

98 S. Cal. L. Rev. 761

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Roy Baharad *

* Doctoral Candidate, University of Chicago Law School.

Gideon Parchomovsky†

Robert G. Fuller, Jr. Professor of Law, University of Pennsylvania Law School; Edward Silver Professor, Faculty of Law, The Hebrew University of Jerusalem. We thank Shiri Alon, Clark Asay, Ian Ayres, Shyamkrishna Balganesh, Oren Bar-Gill, Stefan Bechtold, Abraham Bell, Bari Britvan, Mala Chatterjee, Melissa Eckhause, Shira Ephron, Kristelia Garcia, Yehonatan Givati, Ehud Guttel, Thomas Haley, Lital Helman, Laura Heymann, Justin Hughes, Adi Libson, Peter Menell, David Nimmer, Shmuel Nitzan, Sarah Polcz, Matthew Sag, Peter Siegelman, Christopher Sprigman, Alex Stein, Alfred Yen, Eyal Zamir, and participants at the American Law and Economics Association Annual Conference and at the Seventh Copyright Scholarship Roundtable at Columbia Law School, for valuable comments and suggestions. We are especially indebted to Joseph Fishman for his enlightening remarks. For excellent research assistance, we thank Ron Bechar, Guy Cohen, Rachel Hujsa, Ruoyu Ji, Noam Kozlov, Ariel Melitz, Jeremy Rapaport-Stein, Ido Schlesinger, Yoav Stoler, Jude Taragin, Amir Tzur and Miriam Weinstock. Parchomovsky thanks the Israel Science Foundation for research support.

“Fake Drake”: Vindicating Copyright Ownership in the Advent of Generative AI Music

April 2025April 2025Melissa Schneider*

INTRODUCTION

In April 2023, “Heart on My Sleeve” almost instantly went viral on TikTok, grabbing the attention of millions of viewers who were intrigued by what seemed to be an unreleased collaboration between Drake and The Weeknd.¹ The song not only sounded extremely similar to its alleged vocalists and their music styles, but the lyrics also reflected events and people relevant to their lives, resulting in a very convincing piece of music. But it quickly became clear that this song was not, in fact, created nor sung by Drake and The Weeknd; instead, it was the product of artificial intelligence (“AI”) music-generating programs used by Ghostwriter977, the poster of the video.² After amassing millions of views across various platforms in just a few days, streaming services pulled the song,³ and those searching for it on YouTube were met with a message stating the video was “no longer available due to a copyright claim by Universal Music Group.”⁴

While concerns about this particular song seem to have been adequately addressed by streaming services quickly pulling it from their platforms, the impact of Ghostwriter977’s video was profound and widespread. While generative AI had already aroused questions and concerns generally, ⁵ “Heart on My Sleeve” directed the world’s attention to the music context. While this is not the first instance of a controversial AI-generated musical work,⁶ the nature and quality of the song revealed just how advanced generative AI technology has become, sparking strong responses ranging from excited curiosity to extreme outrage.⁷

The key question that the world is now more intently wondering, as artists, labels, and music representatives wave the flag of “copyright infringement,” is whether U.S. copyright law, as it stands today, can be a source of recourse for artists to take legal action in response to AI-generated music. Due to the novelty of the technology and the nuances of copyright law in the music context, we are without the legal precedent one would usually look at to find a more definitive answer. Because copyright holders’ concerns are pressing and nothing suggests that copyright law will soon be amended to address them, analogizing to similar cases and drawing on the fundamental principles of, and rationales for, copyright protection is necessary to develop predictions as to how courts will rule in a copyright case of Artist v. AI User.

Copyright is concerned with protecting the rights of creators and encouraging innovation, meaning that there remains an additional concern about being overly restrictive and inhibiting creativity and progress. In the context of AI-generated music and copyright infringement, we are placed at what some deem a crossroads,⁸ left to decide whether we value human artists’ creativity and resulting work more or less than we value technological innovation and its potential for important advancements. On one side of this policy debate is the music industry, which generated $15.9 billion in revenue in 2022 in the United States alone,⁹ and represents an art form that has brought humans together since the beginning of time. There is a high barrier to achieving conventional success in the music industry, which some interpret to mean that only the very best succeed as a result of their hard work and dedication. But the other side of the debate takes these same ideas to highlight how innovative generative AI music should be encouraged. Unlike the music industry, which is extremely difficult to break into, there is a very low barrier to entry for generative AI use, as it is largely accessible and there are many tools one can use to learn how to harness the technology.¹⁰ Some see this as an opportunity to diversify music and the people making it, which has many benefits. There are strong opinions on both sides, placing this debate squarely within the realm of what legislators anticipated would be a subject of copyright controversy—how can we balance protecting existing creations and encouraging future innovations? ¹¹

Absent both a clear answer to this question and any indications that existing copyright law will soon be amended to specifically address the issue of potential copyright infringement by generative AI music outputs, we must look to the interpretation of current copyright law in similar situations. This Note will use case law to shed light on how courts might treat copyright infringement suits involving AI-generated music. To illustrate how current copyright law will apply to real AI-generated music, two hypothetical songs will be used as examples, both based on songs that could be created using existing generative AI music systems.¹²

Sample Song A is a rap song created by User A using Uberduck.ai (“Uberduck”). Sample Song A was created using a generic punk rap beat provided by Uberduck. The voice used to create Sample Song A is an option specifically labeled as Kanye West in the era of Yeezus, West’s provocative 2013 album. The lyrics are generated by Uberduck, using the prompt “rebellion, slavery, superiority, unapologetic, perseverance, individuality, and power,” all of which are words that have been used to describe West’s reputation, as well as the themes of Yeezus and particularly, the hit song “Black Skinhead.”¹³ The resulting rap sounds nearly identical to West, with lyrics closely tied to themes he has focused on. The unsuspecting listener may very likely mistake the song for a new release by West himself. While the song sounds like it would fit in with West’s discography, the actual music and lyrics are completely different from any of his prior releases.

Sample Song B is an emotional ballad, and User B created the musical composition using MuseNet. In creating Sample Song B, they selected Adele as the vocal style for the song, and the selected instrument was limited to piano. The introduction to Sample Song B uses the well-known piano phrase that functions as a melodic hook throughout Adele’s “Someone Like You,” an option provided by MuseNet. This piano segment is arguably the most distinctive musical feature of “Someone Like You,” and is known as an arpeggio, which melodizes chords.¹⁴ The exact piano chords and resulting melody are used—just slightly sped up—but after the introduction, the chords begin to differ. However, the song returns to the piano phrase after the chorus, resulting in a song that is musically similar to “Someone Like You.” User B added lyrics using an outside platform after MuseNet finalized the composition. Sample Song B’s lyrics were written to evoke feelings of both love and despair, and the words themselves speak to a failed relationship, regret, and a longing for love; thus, the song, both lyrically and musically, bears a notable resemblance to “Someone Like You” and Adele’s music generally.¹⁵ The lyrics are sung in a feminine, mezzo-soprano voice, but unlike Sample Song A, the voice does not directly imitate its style inspiration.

Before applying copyright law to the sample songs, this Note provides relevant background information. Part I introduces generative AI, providing an overview of how the technology works and details on how the systems used to make the sample songs produce musical works. Additionally, the U.S. Copyright Office’s statements about AI are discussed. Part II focuses on current copyright law—what it requires, what it protects, and how infringement actions work. Music occupies a unique area of copyright law because of the separation between the composition and the sound recording, so limitations and exclusions are discussed in detail. Because courts have not specifically addressed AI on many occasions, analogizing to other cases involving technology helps anticipate the judicial response to this novel technology. Part III applies copyright law to the sample songs and predicts likely outcomes. This includes an analysis of how the songs may fare in all steps of an infringement action, from defenses to statutorily imposed limitations on what can be the basis of a lawsuit. This analysis reveals how copyright law might help artists and how it may hurt them. While artists may potentially find support in trademark law or the right of publicity, this Note will focus solely on copyright law as a vehicle for attempting to vindicate their rights. Finally, Part IV discusses policy implications associated with trying to fit AI-generated music into our developed system of copyright law, highlights the key concerns for artists, and points to gray areas that warrant clarification. The conclusion of this Note summarizes anticipated outcomes and the complicated nature of fitting new technology into the current framework of copyright law.

I. BACKGROUND: GENERATIVE ARTIFICIAL INTELLIGENCE

A. How the Technology Works

AI is “a science and a set of computational techniques that are inspired by the way in which human beings use their nervous system and their body to feel, learn, reason, and act.”¹⁶ More simply, AI can be thought of as “a man-made object with thinking power.”¹⁷ At the foundation of any program is data input, a starting point akin to the intaking of information that constitutes the first step of the human learning process; the difference between AI and human learning in this respect, however, is that AI systems require massive amounts of data to be effective.¹⁸ How exactly systems use data and produce desired results depends on the learning approach. The most prominent systems are machine learning (“ML”) and deep learning (“DL”).

ML is the “most promising and most relevant domain” to apply AI.¹⁹ ML is a way of learning from big data, and its algorithm is self-adaptive, meaning that through experience, it can get new patterns and improve “perception, knowledge, decisions, or actions.”²⁰ The key feature that distinguishes ML is that the goal is for the algorithm to learn to find its own solutions, as opposed to learning to follow human-defined rules.²¹ DL uses “large multi-layer (artificial) neural networks”²² (“ANNs”) to carry out tasks. ²³ DL algorithms “filter[] the input through many layers,” resulting in the ability to “classify and predict the data.”²⁴ “Computational nodes” are created and trained, and ultimately make decisions through a filtering process that is similar to the human brain.²⁵

This Note will focus specifically on generative AI applications, which are created using generative modeling.²⁶ Generative AI models have a “machine learning architecture” and use learned patterns to generate new data samples.²⁷ There are various generative AI systems, each tailored to a desired output goal; for example, ChatGPT is a generative AI system that generates text and is based on an “X-to-text” model.²⁸ Because generative AI is a subset of ML, the training process requires substantial amounts of data. How models are trained can vary greatly, so this Note will focus on the training used for the specific systems that generate music.

B. Generative AI in the Music Context

There are important nuances to note when discussing generative AI systems that create music as opposed to other output domains. Systems that generate music have attracted a lot of attention purely because the output is something we have long considered to be an “innate pursuit of human beings,” as music is viewed as a human expression that encompasses both “creativity” and “collaboration.”²⁹ While many people remain very opposed to generative AI music,³⁰ it is undeniable that the technology has advanced rapidly in ways that have vastly improved the output quality; many generative AI music systems are now able to account for the subtle but important nuances in recorded music and generate output accordingly.³¹

Most music-generating systems involve combinations of ML, DL, and ANNs. The sample songs guiding this Note’s application of copyright law to AI-generated music used the following two noteworthy systems: Uberduck.ai and MuseNet, both of which exist on different ends of the technology spectrum. While these systems are different in relevant ways that will be discussed, it is important to note a key similarity is that they are trained on existing music, so it is almost guaranteed that at least some of the input includes copyrighted songs that train the model to invoke a sound or style.

Uberduck, used for Sample Song A, is a speech synthesis system powered by DL that generates “high-quality and expressive voice output.”³² Uberduck utilizes several models for speech synthesis, including SO-VITS-SVC, HiFi-GAN, and other text-to-speech models.³³ SO-VITS-SVC is a DL model, trained using audio files to convert recordings into singing voices.³⁴ SO-VITS-SVC references “SoftVC,” “[c]onditional [v]ariational [a]utoencoder with [a]dversarial [l]earning,” and “singing voice conversion.”³⁵ Using a source audio, SoftVC, or “soft voice conversion” separates a singer’s voice into “frequency bands,” which are encoded to analyze “distinct characteristics” of a voice.³⁶ A conditional variational autoencoder with adversarial learning uses adversarial training aimed at enabling text-to-speech models to handle more varied data.³⁷ Lastly, singing voice conversion, which can be thought of like a voice cloner, converts one singing voice into another while maintaining features like pitch, rhythm, and notes from the original input.³⁸ Uberduck also uses HiFi-GAN, which is a specialized variant of the generative model Generative Adversarial Network (“GAN”).³⁹ GANs use generators and discriminators, which work together in a repeated feedback process to help the generator produce results that pass the discriminator’s authenticity test.⁴⁰ The discriminator is trained to determine whether an audio sample is real or fake, which aids the generator in “better approximat[ing] the distribution of real data,” resulting in more realistic-sounding outputs.⁴¹ Through its “loss function,” the generator improves its output by incorporating feedback from the error in results, which is the difference between actual and predicted outputs.⁴² This process is illustrated in Figure 1 below. The difference with HiFi-GAN, specifically, is that it is tailored to “transform recorded speech to sound as though it had been recorded in a studio.”⁴³ The use of HiFi-GAN is an important component of making the resulting song sound believable. Together, these technologies and the other text-to-speech models work to mimic the voice of an input audio and make it sound as authentic as possible.

Figure 1. The HiFi-GAN Process

While both systems use DL, MuseNet, used for Sample Song B, is not a text-to-speech system, and is instead a music composition generator that uses a transformer model, which is illustrated in Figure 2 below. MuseNet uses MIDI files encompassing a wide variety of musical styles as its training data.⁴⁴ In training the system, sequential data is provided in the form of sets of notes, and it is asked to predict what the next note will be.⁴⁵ Data is encoded in a way that “combines expressivity with conciseness.”⁴⁶ Similar to the adversarial elements of Uberduck, MuseNet has an “inner critic” during training which asks the model if a sample was generated by the model or from the dataset.⁴⁷ Additionally, MuseNet created composer and instrumentation tokens which are used during training to teach the model to utilize such information when making predictions; the result is that the model can be conditioned to generate output in a certain style using prompts.⁴⁸ Essentially, MuseNet uses the music styles and MIDI files it has been trained on to generate note sequences that sound realistic, as if human-generated.⁴⁹

Figure 2. Transformer Model Training

With the internal side of the technology having been established, the next component is the user side. When using Uberduck—specifically the “AI Generated Rap” feature used to create Sample Song A—the user is able to select a beat from a list of premade generic beats.⁵⁰ After that is chosen, users have a choice to input custom lyrics or utilize Uberduck’s AI lyric generator, which requires entering a detailed “description of what you want your rap to be about.”⁵¹ Finally, the user selects an artist from a list of “[r]appers” to be the voice of their song.⁵² The end result is a complete rap song. As for MuseNet, the initial prompts include style, introduction, instruments, and number of tokens.⁵³ Style options range from Mozart to Lady Gaga to Disney.⁵⁴ Similarly, the introduction options cover a wide range, including the intro from “Someone Like You” by Adele, which is used in Sample Song B.⁵⁵ The number of tokens used corresponds to the length of the song. The end product is a musical composition, to which lyrics can be added outside the platform.⁵⁶

C. Copyright Office on AI

In August 2023, the U.S. Copyright Office (“Office”) published a notice of inquiry on copyright and AI, which followed the March 2023 launch of the Office’s AI Initiative.⁵⁷ This inquiry specifically focused on policy issues relating to copyrighted works being used to train models, the copyrightability of AI-generated works, potential liability for AI-generated work that infringes on a copyright, and how to treat AI-generated works that imitate artists.⁵⁸ In July 2024, the Office published Part 1 of the Report on Copyright and Artificial Intelligence (“Report”), which addresses the topic of digital replicas.⁵⁹ Specifically referencing “Heart on My Sleeve,” the Office ultimately concluded that it believes the time has come for a new federal law to address unauthorized digital replicas.⁶⁰ With respect to copyright law specifically, the Office broadly indicated that a victim of a digital replica in the form of a musical work may have a claim for infringement of the copyrighted work, but clarified that a replica of one’s voice alone does not seem to constitute copyright infringement.⁶¹ Because Part 1 of the Report provides little insight with respect to the potential vitality of such copyright claims and primarily focuses on legislative suggestions, the Office’s previous statements and approaches in similar technology-related contexts remain potentially revelatory.

While this inquiry is the Office’s most comprehensive look into AI, it is not the first time it has addressed AI. The Office addressed concerns about technology-generated works in 1965, especially after receiving an application for registration of a “musical composition created by a computer.”⁶² Although the issues posed by AI today are, in many respects, far more complex given the vast technological advancements in recent years, the general questions about how non-human-generated works fit or do not fit into copyright have been pondered for nearly six decades. The Office, in operating a copyright registration system, necessarily adjusts its practices according to shifts in technology.⁶³ In deciding whether to register a claim, a “registration specialist” is tasked with determining whether a work qualifies as copyrightable subject matter and satisfies the formal and legal requirements of the copyright statutes and the Office’s practices.⁶⁴ As such, the Office’s practices regarding what is registered generally reflect contemporary understandings of the scope of copyright law in light of modern developments.

The question of copyright protection for AI-generated works has notably been addressed in three recent situations. The first situation, which ripened into litigation, involved the Office’s denial of registration for “A Recent Entrance to Paradise,” an artwork created by an AI system, the “Creativity Machine,” which was listed as the author. The Office cited the lack of human authorship as its basis for denial, a requirement that derives from the statutory criteria that protection is extended only to “original works of authorship.”⁶⁵ While “original work of authorship” is not defined statutorily, courts have uniformly interpreted it to limit protection to human authors,⁶⁶ and the Office has adhered to that.⁶⁷ The Office also rejected the argument that AI can be an author under a “work-for-hire” theory.⁶⁸ The user challenged the denial as an “arbitrary, capricious, . . . abuse of discretion . . . not in accordance with the law, . . . and in excess of [the Office’s] statutory authority.”⁶⁹ The court upheld the denial, stating the lack of human involvement pointed to the “clear and straightforward answer” that it does not give rise to copyright.⁷⁰ This situation differs from a second scenario in which the Office registered “Zarya of the Dawn,” a comic book created using an AI system known as Midjourney.⁷¹ The images in the book were created by Midjourney in response to the user’s text prompts, but the user did not control the creation process; as such, the images themselves were not protectable based on the human authorship requirement, so copyright extended only to the text she wrote herself and the selection and arrangement of the elements of the book, including the images.⁷² The third situation involved the denial of copyright registration for an AI-generated artwork entitled “Théâtre D’opéra Spatial” based on the Office’s conclusion that it contained “more than a de minimis amount of content generated by [AI].”⁷³ The Office offered to register the work if the user would exclude AI-generated features, as there were some elements of human creation, but he refused and challenged that requirement; nonetheless, the Office stood by the requirement of disclosing AI-generation.⁷⁴

Due to situations like these,⁷⁵ the Office clarified how AI-generated works are examined and registered in a recent statement.⁷⁶ In the statement, the Office explains that in making registration decisions about works created using AI, the first question is whether the work is “basically one of human authorship, with the computer [or other device] merely being an assisting instrument,” or if a machine conceived and executed the traditional elements of human authorship.⁷⁷ The Office notes that when AI systems receive prompts from humans that enable the generation of “complex . . . musical works,” the author is the technology, not the prompt-writing human, so it would not be registered.⁷⁸ The Office states that there are cases in which AI is used in conjunction with sufficient human effort to permit registration. In such situations, copyright protects only human-authored elements.⁷⁹ While AI adds nuance to registration inquiries, an important takeaway is that the Office stands firmly behind the human authorship requirement.

II. LEGAL BACKGROUND: COPYRIGHT LAW

Codified in Title 17 of the United States Code, the Copyright Act of 1976 (“Copyright Act”), including its subsequent amendments, is the governing source of copyright law.⁸⁰ Congressional authority to enact such legislation arises from the “Copyright Clause” in the U.S. Constitution, which vests in Congress the power to “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”⁸¹ In the time since the enactment of the Copyright Act, there have been many amendments, resulting in a large body of law that simultaneously outlines rules and requirements with specificity and leaves considerable room for judicial interpretation.

A. Requirements for Protection

Under the Copyright Act, copyright “subsists . . . in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”⁸² Copyright does not extend to underlying ideas.⁸³ The Copyright Act explicitly includes “musical works, including any accompanying words” and “sound recordings.”⁸⁴ Generally, the requirements for copyright protection break down into four separate but interrelated requirements: (1) work of authorship, (2) tangible fixation, (3) originality, and (4) creativity.

Legislative history indicates that the phrase “work of authorship” is intended to provide flexibility.⁸⁵ The broad categories of works of authorship in § 102 of the Copyright Act are illustrative, not exclusive.⁸⁶ As mentioned, this requirement has been interpreted to require human authorship, but the Office’s recent statement suggests technology can be involved in the “authorship,” so long as there is sufficient human involvement.⁸⁷ A work satisfies the fixation requirement if it is fixed in a “tangible medium of expression” that is “sufficiently permanent or stable.”⁸⁸ Congress has indicated that fixation form does not matter.⁸⁹ A fixed composition may be written sheet music, while a fixed sound recording may be a recording saved onto a compact disc.⁹⁰

Fixed works of authorship must also satisfy the requirements of originality and creativity,⁹¹ which require “independent creation plus a modicum of creativity.”⁹² Therefore, so long as the work is independently created, a lack of novelty does not preclude copyright protection.⁹³ The “modicum of creativity” standard is a relatively low threshold, requiring only that the work goes beyond independent effort⁹⁴ and bears a “spark of distinctiveness in copyrightable expression.”⁹⁵

There are unique considerations with regard to these requirements in the context of musical works because determining the requisite creativity in music can be contentious.⁹⁶ Creativity is said to inhere in one of three key elements of a musical work—harmony, melody, or rhythm.⁹⁷ While the typical source of protection for compositions is melody, courts vary in this regard, with sufficient creativity being found and denied on each basis.⁹⁸ Protection for musical works includes “accompanying words” or lyrics;⁹⁹ when lyrics and musical elements are integrated into one work, they are protected together and on their own.¹⁰⁰ Lyrics must also satisfy the requirements for protection, and whether lyrics qualify for protection is very situation-dependent.¹⁰¹

B. Rights Conferred by Copyright Ownership

Section 106 of the Copyright Act outlines the exclusive rights of a copyright holder, which broadly include reproduction, distribution, adaptation, performance, and display rights.¹⁰² Actionable copying may pertain to infringement of any of these exclusive rights but must include infringement of at least one.¹⁰³ AI-generated music is most likely to implicate the reproduction, adaptation, and distribution rights.

Reproduction Right

The first exclusive right relevant to AI music is the right to “reproduce the copyrighted work in copies or phonorecords.”¹⁰⁴ In the music context, a USB with a sound recording would qualify as a phonorecord, while a written composition of the song, like sheet music, would be considered a copy.¹⁰⁵ To infringe on the reproduction right, the subsequent work must be a tangible, material, fixed object. An important music-specific caveat in 17 U.S.C. § 114 (“section 114”) is that the reproduction right in recordings is “limited to the right to duplicate the sound recording in . . . phonorecords or copies that directly or indirectly recapture the actual sounds fixed in the recording.”¹⁰⁶ This means that phonorecords with sounds that merely imitate the original sound, as opposed to actually recapturing the original sounds, do not infringe on the reproduction right, “even though such sounds imitate or simulate those in the copyrighted sound recording.”¹⁰⁷ This has been interpreted as precluding liability for substantially similar imitations of a recording absent any exact copying; this is important in the context of music sampling, as it requires proof of exact duplication.¹⁰⁸

Adaptation Right

Copyright owners also have the exclusive right to “prepare derivative works based upon the copyrighted work,” as well as to authorize others to do so.¹⁰⁹ A derivative work is one that must be “based upon one or more pre-existing works,” which is interpreted to mean that a latter work incorporates a sufficient amount of the original work to go beyond mere inspiration.¹¹⁰ The adaptation right is closely tied to the other exclusive rights, namely the reproduction and performance rights. When a work is deemed to be a derivative, there is a necessary implication that the reproduction or performance right was also infringed because the second work is substantially similar.¹¹¹ With respect to sound recordings, the right to produce derivative works is limited to those in which “actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality.”¹¹² The independent fixation exclusion to the reproduction right also applies to the adaptation right.¹¹³ As with the reproduction right, this limitation finds notable importance in the realm of music sampling and licensing.¹¹⁴

Distribution Right

The third exclusive right relevant to music is the right to “distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership.”¹¹⁵ To violate the distribution right, there must be a tangible product, whether a phonorecord or a copy. The distribution right in the music context involves the right to sell copies, like sheet music, and phonorecords, such as CDs, of the musical work to the public. In the context of Internet platforms, specifically music platforms for sharing sound recordings, there are questions as to whether making copyrighted works available to the public constitutes a violation of this right. Although courts have not unanimously agreed on the answer, it seems clear that making sound recordings available for download by the public on file sharing networks is likely sufficient to demonstrate infringement.¹¹⁶ Unlike the reproduction and adaptation rights, section 114 does not explicitly name the distribution right in limiting exclusive rights in a recording to exact copies; however, this is likely immaterial because a mere imitation of sounds in the original would seemingly fall outside the definition of the right as applying to distributing copies or phonorecords of the original work.¹¹⁷

C. Additional Music-Specific Considerations

1. Musical Composition Versus Sound Recordings

One unique aspect of music copyright is that there are two sources of protection in a song: the musical composition and the sound recording.¹¹⁸ These are considered distinct elements of a musical work, with each being independently copyrightable.¹¹⁹ While both elements are subject to the same requirements for protection, it is important to distinguish between the two, as the law applies differently to each in certain respects. This distinction plays an overall significant role in infringement actions, from whether something is actionable to what royalties are owed for a use.

While some cases have blurred the line between the composition and recording,¹²⁰ others reflect the importance of keeping them separate, as it is clear that determining applicable case law and potential arguments depends on whether the claim is based on recording or composition. Cases are also revelatory of how outcomes differ based on which element is allegedly infringed.¹²¹ Pertinent to this Note’s discussion, it is both possible and not necessarily uncommon for a work to infringe on the rights of ownership of the composition, but not the recording. Because infringement of the recording has been read to require actual duplication of sounds, a work that recreates but does not directly sample a guitar solo can infringe on the composition but give rise to no cause of action for infringement of the sound recording. Thus, this Note will continue to emphasize the line between these two elements, and how AI-generated music may or may not infringe on each.

Licensing and Sampling

Licensing and sampling are unique considerations in the music context. Licensing, whether it is compulsory and imposed by the Copyright Act or voluntarily negotiated,¹²² functions as a means of ensuring that owners are compensated for the use of their work. How licenses are obtained and what they allow a licensee to do depends on what aspect of the musical work is involved and who is seeking to license it. Central to the discussion in this Note, however, is the royalty aspect of licensing. Because the hypothetical uses analyzed in this Note did not involve licensing the songs, the artists did not receive compensation in royalty payments for these uses.

A very common practice in the music industry that potentially implicates the need for obtaining a license is sampling. “Sampling” refers to the practice of incorporating short segments of sound recordings into new recordings.¹²³ Typically, when the word sampling is used, it means there is a literal duplication of some portion of the original work, not merely an imitation.¹²⁴ Because sampling involves using a clip in an identical sounding way or with limited alterations, the issues presented by sampling usually fall under the substantial similarity inquiry.¹²⁵ Courts are divided on how to approach sampling, particularly with regard to whether applying the de minimis doctrine is appropriate. On one end of the spectrum, the Sixth Circuit in Bridgeport Music, Inc. v. Dimension Films held that sound recording owners have exclusive rights to sample their own recordings, which led to the strong recommendation to “[g]et a license or do not sample.”¹²⁶ This indicated a bright-line rule that any unauthorized use of the recording constitutes infringement, dispensing of the substantial similarity requirement as it pertains to sound recordings.¹²⁷ This view has been sharply criticized by many courts on the other end of the spectrum. Rejecting the Bridgeport view, the Ninth Circuit in VMG Salsoul, LLC v. Ciccone held that the de minimis doctrine extends to sound recordings, thereby necessitating the usual substantial similarity inquiry.¹²⁸ As such, the assessment of sampling in AI-generated music will differ based upon whether the court applies a sampling friendly or unfriendly approach.

D. Copyright Infringement Actions

To establish an actionable copyright infringement claim, the owner must prove the following: (1) they own a valid copyright and (2) there has been copying of the original expression contained therein.¹²⁹

Ownership of a Valid Copyright

As to the first requirement, valid copyright exists when an original work falls within the protectable subject matter of copyright law and adheres to statutory formalities, including fixation, duration, and national origin.¹³⁰ Additionally, registration of the work with the Office is typically a prerequisite for an infringement claim and serves as prima facie evidence of both a valid copyright and ownership thereof.¹³¹ The second prong, ownership, is a legal conclusion based on relevant facts;¹³² ownership is particularly important in the music context given the separation of the composition and recording. Once this is established, one can draw a conclusion as to which exclusive rights the owner has, which then form the basis of an infringement claim.

Copying

Despite extensive similarity, there can be no infringement without copying. Actionable copying must relate to protectable elements of the original work.¹³³ This requirement is best understood as consisting of two elements: factual copying and legal copying.¹³⁴ Factual copying poses a purely factual question: did the defendant know of the protected work, have access to it, and use it in some way in the production of their work?¹³⁵ To establish that the defendant actually copied the original, direct or indirect evidence may be used.¹³⁶ Absent direct proof, copying can be established circumstantially if the plaintiff can show the defendant “had access to the copyrighted material,”¹³⁷ and similarities exist between the works that are “probative of copying.”¹³⁸

Legal copying is often referred to as “improper appropriation” or “substantial similarity.”¹³⁹ Copying does not require verbatim replication of the original work, rather it requires that copying result in the production of a substantially similar work.¹⁴⁰ Experts describe the question of when similarity rises to the level of “substantial” as one of the toughest questions in copyright law.¹⁴¹ Similarity exists on a spectrum, spanning from the most trivial similarities, which are not actionable, to absolute, literal similarity that renders a second work identical. One approach to similarity divides it into two types: “comprehensive nonliteral similarity” and “fragmented literal similarity.”¹⁴² Comprehensive nonliteral similarity speaks to similarity in the “fundamental essence or structure” of a work. Fragmented literal similarity refers to duplication of literal elements of an original, but only in a fragmented manner, such as the exact duplication of only three lines of text. Fragmented literal similarity is often described as a de minimis doctrine, as the question gets at whether a use is de minimis or not.¹⁴³

Regardless of the type of similarity involved, courts imposed one additional barrier for copying of protected elements to be actionable: the copying must not be de minimis.¹⁴⁴ In the context of copyright, “de minimis copying” can be understood as the opposite of substantial similarity.¹⁴⁵ While the idea of de minimis copying sounds simple, its application is not necessarily straightforward because it is highly fact dependent. A de minimis determination pertains both to the quantity and quality of the use, therefore a “simple word count” is not alone enough to determine infringement.¹⁴⁶ In the music context, whether uses are deemed de minimis can vary greatly; in one instance, a six-second segment of a four-and-a-half-minute song was deemed a de minimis use,¹⁴⁷ but in another, a three-second orchestra sequence was not.¹⁴⁸

Courts have developed a wide variety of approaches to determine when similarity rises to the level of substantial in these types of cases. The three test categories that are most commonly used in similar music-related cases are the extrinsic-intrinsic, ordinary observer, and fragmented literal similarity tests.¹⁴⁹ While they each take slightly different approaches to determining the presence of substantial similarity, they are all ultimately rooted in the foundational question of whether there is similarity in those elements to which copyright protection would extend.

Fair Use Defense

Section 107 carves out a limitation on exclusive rights, commonly known as the fair use defense. Four factors are considered in determining whether a use is a fair use:

(1) [T]he purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.¹⁵⁰

While the Copyright Act dictates that these four factors “shall” be considered, how they have actually factored in has developed over time through judicial interpretation. The seminal case that guides all applications of the fair use defense is Campbell v. Acuff-Rose Music, Inc., a 1994 Supreme Court case that addressed a musical parody.¹⁵¹ The Court cautioned against simplifying the analysis to bright-line rules, emphasizing that fair use determinations must be done on a case-by-case basis, weighing each factor together.¹⁵² While the general principles from Campbell remain, the Supreme Court recently addressed fair use again in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, in which the Court limited the fair use defense with regard to the first factor’s transformation inquiry.¹⁵³ This will likely have particular salience in infringement cases involving AI because AI is inherently transformative; however, this type of transformation may not hold as much weight under the new understanding of the first factor post-Goldsmith.

While fair use is regularly litigated in many copyright cases generally, musicians tend to avoid it.¹⁵⁴ This initially seems odd given that the seminal case for fair use, Campbell, involves music; but Campbell is really a parody case. Outside the context of parody,¹⁵⁵ Estate of Smith v. Cash Money Records, Inc., is the only federal case recognizing a songwriter’s fair use in copying another song.¹⁵⁶ While artist-defendants have pled fair use in their answers to infringement cases, they typically defend their work on other grounds.¹⁵⁷ A 2018 empirical study revealed that, up to that point, no defendant had successfully established a non-parody fair use of another work’s musical notes.¹⁵⁸ Therefore, how fair use will operate in this context will be somewhat speculative.

III. APPLICATION AND ANALYSIS

A. Sample Song A

Sample Song A is highly similar to “Heart on My Sleeve” by “Fake Drake.” While it sounds deceptively like Kanye West, both in the voice and in that it employs lyrics that intentionally evoke similar themes to his recent works, these similarities are highly unlikely to be cognizable under copyright law for several reasons. Rather than being copyright infringement, this Kanye-inspired song is almost certain to be considered what the courts have called a “soundalike.” But because songs like this have already been the source of contention regarding music and copyright, it is helpful to understand the basis for why this is unlikely to be a successful claim.

For the purposes of this application, it is assumed that there are valid copyrights for the songs from Yeezus that were used in creating Sample Song A, including “Black Skinhead.” It is also assumed that West owns the valid copyrights for both the sound recordings and underlying compositions.¹⁵⁹ Thus, the first requirement of a copyright infringement claim, ownership of a valid copyright, is presumed to be satisfied. This means that West is entitled to the exclusive rights outlined in the Copyright Act. Infringement of one of these rights must be the basis of his claim against User A, which presents just one of many road bumps in an attempted lawsuit based on this type of activity: copying as it relates to his voice or style can pertain only to the sound recording. As such, he is limited to claiming infringement on his right to reproduce, adapt, distribute, and perform the sound recording.¹⁶⁰

Factual Copying

Whether or not there is any possibility of an actionable claim will depend on the second requirement of copying, which is divided into two prongs: factual copying and legal copying. West’s claim would most likely have to rest on an infringement of a right associated with “Black Skinhead” specifically because satisfying the copying requirements for an entire album comprised of a variety of types of songs seems very unlikely. Turning first to factual copying, this prong asks the question of whether the defendant knew of, had access to, and in some way used the protected work in the production of their work. This requirement would seemingly be satisfied by the AI system’s owner, as the question could be answered by looking at the songs the system is trained on to produce work that sounds like West. However, it is likely more complicated when the infringer is merely the user who is not responsible for or involved with inputting data. While the prompt used by User A strongly suggests their desire and intent to use Yeezus and “Black Skinhead” in some way, it is not obvious whether this satisfies the factual copying requirement. This inquiry raises two key questions: can the use by Uberduck be imputed onto User A or can indirect evidence be used to sufficiently prove factual copying by User A themselves?

While it can arguably be assumed that Uberduck is trained on Yeezus and “Black Skinhead” given its option of West’s voice in the style of Yeezus, it cannot be verified for certain absent an admission from Uberduck’s programmer. However, this is not detrimental to a claim by West because factual copying can be proven using indirect evidence, which requires only demonstrating that defendant had access to the copyrighted work and that there are substantial similarities between the works that are “probative of copying.”¹⁶¹ While access cannot be demonstrated by showing a bare possibility that the defendant accessed it, a reasonable possibility of access can.¹⁶² Where these two key questions diverge is on how that possibility of access is demonstrated, whether it be access by the system imputed onto User A or access by User A themselves. Starting with the system, the offering of a Yeezus-style voice suggests a reasonable possibility of access to “Black Skinhead” for a few reasons. First, from a technological perspective, Uberduck utilizes DL, which alone requires significant amounts of data input for the system to learn; for a model to be able to replicate West’s voice from a specific album, it can be inferred that the whole album would have been used to provide as much learning material as possible to create the most authentic results. So-VITS-SVC, the specific DL model Uberduck uses to make songs that sound like West, involves a process of using relevant source audios of West to separate out his voice, which is then encoded to analyze and use the distinctive characteristics of his voice from those songs. Additionally, the HiFi-GAN model that Uberduck uses helps to train the generator to recognize authentic versus fake West samples until it can produce highly realistic-sounding speech.

Asserting that the voice can sound specifically like West in Yeezus, together with the technological understanding that this would require as much relevant training data as possible, it seems fair to conclude it is reasonably possible that the system had access to “Black Skinhead,” which is one of only ten songs on the album. Even considering the unlikely possibility that not all ten songs were used to create a Yeezus-inspired voice, it seems very reasonable to conclude that “Black Skinhead” would be used because it was the first single released from the album,¹⁶³ it has since been certified platinum in the United States three times, and West performed it repeatedly,¹⁶⁴ all of which arguably make it a hallmark of the Yeezus era.¹⁶⁵ It is difficult to imagine a Yeezus-style voice could be trained without the use of this song. Technology aside, access can also be shown through a theory of widespread dissemination,¹⁶⁶ and, for the reasons just stated, “Black Skinhead” was clearly widely disseminated. However, this theory of access is likely not applicable to the system itself outside the context of liability for input.

Having established a relatively strong claim of reasonably likely access, the next question turns on whether that access could be imputed onto User A. Courts have held that there was a reasonable possibility of access by the defendant in certain circumstances in which such access is inferred based on an “intermediary.”¹⁶⁷ One iteration of this theory of access is that access can be inferred if the intermediary or third party is connected to the copyright owner and the infringer.¹⁶⁸ Courts that have entertained this argument have varied on the relationship the intermediary must have with both parties, but a key characterization appears to be that it is a “close relationship,” which might be found when the intermediary contributes creative ideas to the infringer, supervises the infringer’s work, or has worked together in the same department as the infringer.¹⁶⁹ There are two wrinkles in trying to apply this argument here. First, most cases involve the intermediary being given the copyrighted work by the owner.¹⁷⁰ This is potentially less damaging because it still seems relevant whether the third party heard the song, as this also factors into the conclusions in addition to whether the intermediary was given a copy.¹⁷¹ Second, the relevant cases involving inferences based on intermediary access have involved a human intermediary.¹⁷² This may be particularly problematic for a plaintiff in a situation like West because it is hard to apply a framework of a close human relationship to the relationship between a computer program, a user, and input data. However, given the novelty of generative AI technology and the unique issues presented by generative AI music, there is a chance courts will not deem this fatal.

One reason to think courts may be flexible here is because of the expanded willingness to hold Internet intermediary sites vicariously or contributorily liable for failing to monitor infringing material available on or through the use of the Internet’s system.¹⁷³ While this speaks more to potential liability of the system as the sole infringer, it may still help convince a court to accept arguments based on non-traditional assistance in infringement, which is required here to first find the technology to have been an intermediary, and then impute liability onto a user. An indication that courts may be less likely to consider an AI system to be an intermediary turns on the assessment of AI in Thaler v. Perlmutter. As discussed, the court in Thaler emphasized the importance of human authorship for copyright protection.¹⁷⁴ The court rejected the plaintiff’s “work-for-hire” argument, which he used to suggest that he had hired the AI system to create the painting for him; the court rejected the argument for several reasons, but most importantly noted that such provisions of the Copyright Act clearly only contemplated the involvement of humans as employees and the contractual relationship outlined in the provision required a meeting of the minds that cannot occur with a non-human entity.¹⁷⁵ While again, this speaks to a different type of imputation onto technology, it nonetheless reflects a hesitancy to treat technology itself like a human. This provides good reason to question whether a court would find an AI system to be a sufficient intermediary to justify an inference of access.

Given that courts have at times expressed the need to be careful in imposing liability when infringement is not done directly,¹⁷⁶ it is worth considering the possibility that a court assessing generative AI may have trepidations about holding a user liable for infringement that may technically be executed through the complex algorithm of an AI system without any input from the user besides a brief prompt.¹⁷⁷ However, case law has consistently indicated that a finding of infringement is not dependent upon finding that the defendant intended to infringe.¹⁷⁸ As such, it seems unlikely that an individual could escape potential imputation of access by simply arguing they intended to use the system to create a new song, not to infringe on the copyright of another.

Assuming the inference of access could not be imputed onto User A by way of an intermediary theory, there remains the question of whether factual copying by User A can be proven through the same indirect evidence approach without any imputation or involvement of the AI system. As mentioned earlier, one avenue for demonstrating a reasonable probability of access is by pointing to widespread dissemination of the song, which certainly seems like an available option here.¹⁷⁹ This assertion is likely bolstered by the fact that User A clearly knew of Yeezus, as they selected the Yeezus style, and had to have been familiar with the album generally because of the themes in their prompt. These facts, in addition to the widespread dissemination of the song and selection of a rap beat and lyrical themes so similar to “Black Skinhead” form a strong basis for concluding there is a reasonable likelihood of access to the song by User A. The potential issue that could arise is that User A may argue that they were not involved in the creation aside from the prompt and the few general selections. They may try to argue that, even if they had heard the song, this would not matter because their awareness was not involved in the actual creation of the song or what it sounds like. Ultimately, this would likely come down to a determination of whether the selections and prompt constitute sufficient involvement in the creation, but it seems possible that it would be enough because User A did in fact direct Uberduck in a very pointed direction, even if they did so through simple or general means. Additionally, this is unlikely to be where West’s case completely crumbles, and User A has stronger, more important arguments in other areas.

Even if access is proven, the factual copying prong remains unsatisfied until West can demonstrate probative similarity. The probative similarity prong is likely much more straightforward in this case than the access prong. The idea behind probative similarity is that, combined with a reasonable probability of access, a level of similarity will give rise to a reasonable inference that the copyrighted work served as the source for the allegedly infringing work.¹⁸⁰ Determining the presence of probative similarity requires an examination of the two works as wholes to assess whether similarities are those which would not be expected to arise independently.¹⁸¹ An important difference between this inquiry and the legal inquiry of substantial similarity is that probative similarity is not limited to protectable elements, meaning the inquiry takes a holistic approach focused on drawing a historical conclusion as to whether the copyrighted work was the basis in some way for the second work.¹⁸² This could give West a small glimmer of hope because the songs may sound sufficiently similar when compared side-by-side, especially given that unprotectable elements of his style and voice can technically be considered. Because the song sounds like West and expresses themes common to “Black Skinhead” and Yeezus more generally, a jury looking holistically at the two songs may find the similarity to be probative of copying. The level of similarity required to satisfy this requirement is lower than that of substantial similarity, as West must show only that Sample Song A overall is similar to “Black Skinhead” in a way that would be unexpected had User A not had access to the original.¹⁸³ But this is an uncertain outcome because it ultimately comes down to the jury’s assessment of how the songs actually sound and is not dependent upon any legal criteria aside from the general rule of what probative similarity is. Although there is a chance West might prevail on factual copying by demonstrating access and probative similarity, it is likely short-lived because the legal copying inquiry remains.

Legal Copying

The end of the road for those like West who seek to vindicate their exclusive rights by legally challenging soundalikes almost certainly comes at the legal copying phase, if the claim even reaches that point. The substantial similarity prong of the copying requirement raises questions that a song like Sample Song A cannot satisfactorily answer. The chief problem here is that we are assuming the only real similarity is that it sounds like West’s voice or is sung in his distinctive style, neither of which are copyrightable elements of his work. The exclusion of voice and style from the scope of copyright protection was confirmed solidly in the well-known case Midler v. Ford Motor Co., in which Bette Midler lost on a claim of infringement based on a soundalike song that mimicked her voice almost exactly; the infringement claim relied solely on her voice, as the user had obtained rights to the song itself.¹⁸⁴ The Ninth Circuit stated bluntly that “voice[s] [are] not copyrightable,” as they are not fixed works of authorship as required by the Copyright Act.¹⁸⁵ While West may try to point to the similar themes, copyright extends only to expression and not ideas. Regardless of what test is used, when a work is substantially similar only in regard to separate, unprotectable elements, there can be no infringement. There are instances in which unprotectable elements together can form the basis of substantial similarity, but that would not be possible when two songs do not sound alike aside from the voice and general genre or theme. Absent some concrete similarity, such as instrumental interludes, phrases, or even lyrics, there can be no actionable substantial similarity. Section 114 of the Copyright Act likely blocks this type of claim, as it states that the reproduction and adaptation rights do not extend to independent fixations, even if the recording imitates a copyrighted recording.¹⁸⁶ Therefore, Sample Song A would not qualify as a derivative work because, as a mere imitation, it cannot infringe on the adaptation right.

While all signs point to dismissal, there are two potential unique considerations that may be worth discussing. First, there is the question of whether Sample Song A should be considered a reproduction and adaptation, even though it is not the exact same, because the exact song was used to train the outputs of the generative AI system. Technically, AI is trained to the point that it can create its own patterns, but ultimately those are still developed using the copyrighted work. In the case of Sample Song A and Uberduck, So-VITS-SVC isolates the artist’s voice, uses that voice to create and encode frequency bands that correspond to the distinctive characteristics of the voice in that audio, and then learns to make audio that uses those frequencies. There is potentially an argument that this is a literal reproduction of sounds in a way that should be separated from the intangible concept of a voice or style, and instead look at it like a remixed sample of audio of West’s voice.¹⁸⁷ Under this theory, not only could the use be an infringement of the reproduction and distribution right, but Sample Song A would also potentially qualify as a derivative work, as it is a new song based on parts of West’s recording in “Black Skinhead.”¹⁸⁸ If this were to be considered a sample, under the Bridgeport view, this would qualify as infringement without even delving into the substantial similarity inquiry.¹⁸⁹ However, this is far from the only approach to sampling. Likely, the question of substantial similarity will remain central to determining whether this use of sampling constitutes infringement. As already discussed, Sample Song A and “Black Skinhead” cannot be substantially similar because their chief “similarity,” West’s voice and style, is not a protectable element of the song, so it would not be able to serve as the sole basis for infringement under any of the judicial tests. The use of West’s vocal frequency bands would likely be deemed a de minimis use, which is a use in which “the average audience would not recognize the appropriation.”¹⁹⁰ It seems very unlikely that the average audience would recognize Sample Song A’s use of vocal frequency bands extracted from “Black Skinhead” and West’s other music, even though they might recognize that the voice generally sounds alike. This is certainly more complicated than an ordinary sampling inquiry because the use involves very small fragments used in very different ways; nonetheless, because the statutory language prohibits only that which is actually duplicated, the substantial similarity inquiry and de minimis interpretation would have to be based solely on those exact duplications of frequency bands. As such, if this is considered sampling, it would nonetheless likely be dismissed as a de minimis use.

However, even if the use is considered sampling, fair use will likely be an issue for West, whether or not the legal copying issue is addressed with a substantial similarity inquiry. If the sets of sounds from the source audio were actually sampled to make Sample Song A, they are fundamentally different because the frequencies inherently change when forming sounds that say different words. Therefore, if that could be considered an exact reproduction and adaptation of those sounds, it seems likely that a court would find that to be a fair use. While Goldsmith instructed the transformation inquiry to be reined in, this type of use is undeniably transformative in a way similar to the code transformed in Google LLC v. Oracle America, Inc.¹⁹¹ While the basis for the sound of West’s voice, the frequencies, were used, they were manipulated and restructured to such a significant degree, as evidenced by the creation of an entirely new set of lyrics rapped. This is comparable to the reverse engineering of object code in Sega Enterprises Ltd. v. Accolade, Inc., in which the Ninth Circuit found reverse engineering in order to transform code into something entirely new to be a fair use.¹⁹² In Sega, the court rejected the argument that a use in order to create competing products precludes a fair use finding, and emphasized the need to focus on several factors, including but not limited to commercial purposes; there, the use of copyrighted code was to understand the program’s mechanisms and then create something entirely new that would be compatible with the program, which outweighed its purpose of creating an ultimately commercial product.¹⁹³ Here, the decoding of songs into frequency bands could be understood as an attempt to understand why West’s voice sounds the way it does, and the subsequent use of such frequency bands to say new words and make an entirely new song is a transformative purpose sufficient to count toward a fair use. While User A likely hoped their song would achieve commercial success, that does not negate the transformative purpose behind their use of frequency bands from West’s music. Thus, the first fair use factor leans strongly in favor of the user.

As to the second factor, the nature of the work, West’s music is inherently creative, which tends to count against fair use.¹⁹⁴ However, this is often not the most significant factor, and courts have not refused to find a fair use in situations involving creative works.¹⁹⁵ The third factor, amount and substantiality used, counts very strongly in favor of fair use. Vocal frequency bands constitute a very small amount of everything that goes into a song. Considering that all other elements, including instrumentals and lyrics, are entirely different, the use of frequency bands is a minor taking from the original, although West may try to argue that whole songs, presumably including “Black Skinhead,” were encoded. In Sega, in which the entire program was encoded, the court noted that while that fact counts against fair use, the factor is of little weight when the actual use of that information is so limited.¹⁹⁶ Here, certainly not all of that which is encoded is used. What was encoded was a sufficient amount of frequency bands to analyze and understand vocal characteristics for future imitations;¹⁹⁷ while this may have involved a large number of frequency bands, that was what was required to serve the ultimately transformative purpose of creating a high-quality song that did not itself utilize all that was encoded for training purposes.¹⁹⁸ Because the third fair use factor asks about substantiality as well, there is an opening for West to try to argue that, even if frequency bands are one small part of a song, they are nonetheless substantial in relation to the whole work because they are responsible for creating his distinctive voice. This argument would face a few barriers, the first being that it is completely acceptable to make a song that simply sounds like someone else. Additionally, he may have a more compelling argument if those vocal frequencies were placed together and used to rap lyrics from one of his songs. But the frequency bands themselves, isolated from the other bands that together create his voice, are hardly the “heart” of his original work, especially with how they have been changed in Sample Song A.¹⁹⁹

The fourth fair use factor, the effect on the market, has received limited attention in the context of music. However, in Frisby v. Sony Music Entertainment, the court noted that two songs in the similar genres of rap and hip-hop were marketplace competitors.²⁰⁰ As competitors, one copying the other could reasonably be expected to diminish the value and sales of the original.²⁰¹ Here, Sample Song A and “Black Skinhead” are certainly in the same genre, so they may properly be considered competitors in the music market. Following the line of reasoning in Frisby, this means it can be assumed that Sample Song A would have a negative impact on the value of “Black Skinhead” and, further, would harm the market for derivatives because it was used without a license.²⁰² Because sampling is so prevalent in the rap and hip-hop genres, this is particularly relevant here; West may argue that finding this a fair use would set the precedent that following proper sampling procedures is unnecessary. However, the facts here separate this case from that of Frisby because the potential sampling that occurred could have easily gone unnoticed absent the knowledge that it was created using an AI system that had encoded these vocal frequencies. To suggest that this use of “Black Skinhead” would have such a chilling effect on licensing in the industry seems to be taking Frisby’s presumptions too far.

Taking all four factors together, it seems that the highly transformative purpose and minimal amount used may be enough to weigh in favor of finding this to be a fair use, especially in light of the highly speculative arguments about market harm given that this does not involve sampling in the traditional sense. However, because the fourth factor is “undoubtedly the single most important element of fair use,”²⁰³ it is possible that if a court adopts the view that sampling without a license has such an impact on the market for future derivatives, the fourth factor could be enough to compel the finding that this is not fair use. Of course, this would be a judicial determination, so it is not impossible that a court would accept these arguments, but it does not seem overly promising at this point. Given how courts have viewed voice and style thus far, it seems like a stretch to imagine the argument that vocals are really just compilations of protectable sounds would suddenly work because of the technology involved.

The second consideration is that some may believe Williams v. Gaye opened the opportunity to argue style infringement. While the dissenting opinion in Gaye criticized the majority’s conclusion as endorsing the idea of copyright protection for a musical style,²⁰⁴ the bases for infringement included elements like signature phrases, hooks, and structural similarities.²⁰⁵ These were similarities that, although alone may not have been protected, together led to substantial enough similarity that a jury concluded rights had been infringed. While these elements could be considered aspects of the plaintiff-artist’s style, they clearly went beyond sounding like a voice. Additionally, Gaye focused on the composition, whereas Sample Song A’s mimicking of West’s voice could only speak to infringement of the recording because the alleged similarities relate only to what the vocals sound like, which is not fixed on a page like the phrases in Gaye. Putting aside the differences between Sample Song A and the infringing song in Gaye, a key weakness in West’s style argument and whether Gaye made that argument an option is that this idea has not been embraced by other courts. While some courts have embraced a “total concept and feel” test for substantial similarity, both on its own and as part of an “intrinsic” test,²⁰⁶ that test requires at least a claim based on original arrangement of unprotected elements.²⁰⁷ Without some protectable element, whether it be lyrics or a drum beat,²⁰⁸ a similar “feeling” song will not pass a substantial similarity test.²⁰⁹ Here, even if a lay person has an initial reaction that the songs sound similar because the voice mimics West, that, again, is not copyrightable. Given that there are no elements of the instrumental track or lyrics to be the basis of this claim because these are original lyrics and a generic rap beat unlike “Black Skinhead,” the mimicking of his voice is the only thing West could point to and that cannot pass the test. Therefore, even if Gaye introduced a way to litigate style infringement, which is debatable given other courts’ avoidance of such a conclusion, it appears that there must be some sort of protectable expression in that style to base one’s claim on. While West’s voice may evoke a certain aesthetic style and certainly speaks to his creative expression, there is nothing in that expression that can be the source of a successful claim here.

None of this discussion is intended to denigrate the frustration on the part of West and similarly situated artists who understandably want to fight back against AI-generated songs that intentionally mimic their voices and do so in a way that misleads listeners. This certainly reflects Drake’s perspective in response to “Heart on My Sleeve,” which nearly duped the world.²¹⁰ However, these valid concerns do not bear a clear or logical connection to copyright law and its subject matter. Instead, these concerns likely find more coherence in the protections afforded by the laws relating to trademark, unfair competition, and state rights of publicity, which are tailored to protect against the unauthorized use of one’s identity.²¹¹ This is not to suggest that such claims are certain to be successful, or even actionable, but the aims of those laws, which includes protecting identity, are likely more amenable to the concerns of West and others.²¹²

B. Sample Song B

Unlike Sample Song A, Sample Song B presents questions of infringement that, on their face, seem more likely to be answerable with copyright law. While Sample Song B also seems to generally mimic Adele’s style in “Someone Like You,” it importantly incorporates more than that, particularly by way of a nearly identical melodic hook. As with Sample Song A, it is assumed that Adele owns a valid copyright in both the sound recording and the musical composition of “Someone Like You.”²¹³ Accordingly, Adele would have a potential claim for infringement upon her rights of reproduction, adaptation, distribution, and performance. With valid ownership established, the inquiry begins with the copying requirement as it pertains to the composition.

Factual Copying

The trajectory for proving factual copying is much clearer for Sample Song B. On MuseNet, User B specifically selected the introduction from “Someone Like You” by Adele, and that introduction, though slightly modified, is present from the starting note of Sample Song B. If admitted or witnessed, this would constitute direct evidence of factual copying. However, direct proof is often unavailable because “[p]lagiarists rarely work in the open.”²¹⁴ Nonetheless, it seems very likely that indirect evidence would satisfy this requirement. Regarding access, the theory of widespread dissemination would operate well here. When dealing with songs that have gained notable popularity, plaintiffs have tended to invoke a variety of data points to support theories of widespread dissemination including references to airplay frequency and locations, billboard charts, certifications, record sales, nominations and awards, and royalty revenues.²¹⁵ Here, Adele will be able to construct a very convincing claim of widespread dissemination because she can invoke all of these data points with regard to “Someone Like You”: the song has been streamed over two billion times on Spotify alone;²¹⁶ won several awards, including a Grammy;²¹⁷ was certified platinum five times in the United States;²¹⁸ and is the twenty-fifth-best-selling song of all time in the United Kingdom.²¹⁹ Occasionally, widespread dissemination arguments are accompanied by theories of subconscious copying, which speak to the fact that copyright infringement does not have a scienter requirement.²²⁰ User B did, in fact, see on MuseNet that the intro was “Someone Like You,” suggesting this was not subconscious copying. However, the leeway to argue that the use did not need to be with full knowledge of the circumstances may be help Adele’s case; at a minimum, if User B does not admit selecting the intro, they cannot invoke a willful blindness-type argument. Therefore, an attempt to rebut the argument of widespread dissemination is unlikely to be persuasive.

As discussed with Sample Song A, substantial probability of access usually needs to be accompanied by probative similarity to successfully prove factual copying with indirect evidence. However, there are instances in which the probative similarity is convincing enough that it alone can satisfy the copying requirement. This is often referred to as “striking similarity,” and it arises when the similarity is so extensive that it is “effectively impossible for one to have arisen independently of the other.”²²¹ In analyzing striking similarity in music, it has been held that degree of similarity cannot pertain only to the quantity of identical notes, but must also look to the uniqueness and intricateness of the similar aspects and the places in which the two are dissimilar.²²² Oftentimes, because of how high the bar is set for striking similarity, expert testimony is needed when the subject matter is as highly technical as music. Here, while the melodic hook created by the use of an arpeggio is very recognizable and may seem unique to “Someone Like You,” the use of arpeggios generally is common.²²³ While there seems to be a possibility that, with the help of an expert, Sample Song B could be found strikingly similar to “Someone Like You,” the high bar for such a determination, coupled with the infrequency of successful arguments for striking similarity, makes it reasonable to assume that the normal requirements of access and probative similarity will need to be met; this is not damaging for Adele’s claim, as those are almost certainly provable.

Assuming striking similarity is not found, the indirect evidence just needs to show probative similarity. Comparing the two works side-by-side, protected and unprotected elements alike, a factfinder could certainly conclude that “Someone Like You” was the basis, at least in part, for Sample Song B. This holistic comparison would likely highlight the nearly identical melodic hook, which consists of arpeggiated chords and underlies the distinctive harmony, along with the general similarities in terms of the theme and vocal range. While the use of an arpeggio is not itself uncommon and could occur absent copying, the distinctive chord progression, melody, and harmony created in Sample Song B is similar in all the ways that make the instrumental portion of “Someone Like You,” so memorable and impactful. While remaining careful about maintaining the distinction between probative and substantial similarity, there is likely enough similarity to be probative of copying; whether that similarity is substantial in a legal sense remains to be addressed.

Legal Copying

Substantial similarity is thought of as existing on a spectrum, thereby requiring close examination to attempt to identify the line between trivial similarities and actionable improper appropriation. Here, Adele’s infringement action would allege both comprehensive nonliteral and fragmented literal similarity. The most obvious claim is that of literal similarity with regard to the piano phrase, which functions as a melodic hook, because it is reproduced nearly identically in Sample Song B. A potentially important note is that an arpeggio would appear on the sheet music for a composition because it is notated to guide the playing of chord progressions.²²⁴ Further, the use of an arpeggio is key here because it melodizes the chords being used, which tends to then be an important aspect of the resulting harmony; thus, it is potentially very significant to the substantial similarity analysis because arpeggios may take harmony into the protectable range of copyright law.²²⁵ As for nonliteral similarity, this is a situation in which the nonliteral similarity may be characterized as comprehensive; both songs are played in common time, have a somber, emotional sound, and nearly identical lyrical themes, although they are different on a word-for-word basis. As noted, courts use different tests for determining substantial similarity. While these tests are similar in many ways and may yield similar results, the most thorough prediction of how a song like Sample Song B will fare against infringement allegations must consider the nuances of each. Expert testimony is almost always used to help guide complex questions of infringement in music, so any conclusions are subject to elaboration or criticism by a technical expert.

Before applying any of the tests, it is an appropriate moment to address the doctrine of de minimis copying. Because a determination that a use is de minimis negates the need for a full substantial similarity inquiry, courts often address this “defense”²²⁶ at the outset. De minimis copying essentially means there is a lack of substantial similarity, so the conclusion that a use is de minimis generally arises when “the average audience would not recognize the appropriation.”²²⁷ It is important to keep this concept separate from that of characterizing an element as de minimis itself, such as saying that one note is de minimis and not protectable. As the inverse of substantial similarity, the de minimis inquiry similarly must consider the quantitative and qualitative importance of a use because both get at what an ordinary listener would find substantial. Essentially, the inquiry here would follow the same steps as the fragmented literal similarity test, as that test is viewed as a de minimis doctrine.²²⁸ Because the details of those steps will be discussed in detail in applying the fragmented literal similarity test,²²⁹ they need not be laid out here, largely because it seems unlikely that a court would deem the copying here to be de minimis. The focus of this inquiry is on how much of the original was used or copied; the piano phrase is repeated throughout most of “Someone Like You,” so it seems highly likely an audience would recognize the appropriation. Given that the phrase constitutes a quantitatively large part of the original and arguably has significant qualitative importance because the piano is intentionally the only instrument to create a particular feeling, the phrase opens the song instrumentally, and it may be seen as the song’s backbone, a determination that this use is de minimis copying seems unlikely. Thus, it is appropriate to analyze potential outcomes under each of the substantial similarity tests.

i. Extrinsic-Intrinsic Test

The extrinsic-intrinsic test is a two-prong test. The extrinsic prong is the objective prong and requires identifying concrete elements of expression that are similar.²³⁰ Because this test is part of a substantial similarity inquiry, the dissection of elements involves identifying those that are and are not protected by copyright. Music often presents a more complicated case for analysis because, unlike books and films, it cannot easily be classified into a few protectable and unprotectable elements;²³¹ thus, courts applying the extrinsic prong have looked to a wide variety of elements, including title hooks, lyrics, melodies, chord progression, pitch, instrumentation, accents, and basslines.²³² The combination of these expressive elements can be protected by copyright and often form the basis of claims involving instrumental phrases.²³³ Therefore, it can be helpful to think of the first question as relating to separating protectable elements or compilations of elements, and the second question as analyzing those elements to determine whether they are objectively substantially similar. In Skidmore v. Led Zeppelin, the district court concluded on a summary judgment motion that there was sufficient extrinsic similarity for the issue to go to the jury; the basis for such similarity focused on a “repeated A-minor descending chromatic bass lines lasting [thirteen] seconds” that appeared within the first two minutes of both songs and was arguably the “most recognizable and important segments of the respective works.”²³⁴ Additionally, the “harmonic setting” of the sections used the same chords.²³⁵ The court concluded that even though a “descending chromatic four-chord progression” is common, the placement in the song, pitch, and recognizability make it appropriate for analysis under the extrinsic test.²³⁶ Ultimately, however, the jury concluded that, despite the combination of objective similarities, the songs were not extrinsically similar. The jury reached a different conclusion in Three Boys Music Corp. v. Bolton, in which the jury found substantial extrinsic similarity in the compilation of five unprotectable elements.²³⁷

Here, Adele could likely make an argument similar to that of the plaintiffs in both Skidmore and Three Boys Music, arguing that although arpeggiating chords to achieve certain melodic or harmonic goals is not uncommon, the very same chord progression starts both songs without lyrical accompaniment, is repeated several times in both songs at the same pitch, and is “arguably the most recognizable and important”²³⁸ part of each work; invoking the device that made the Three Boys Music plaintiffs successful, Adele would want to emphasize that it is the compilation of expressive elements that form the basis of actionable extrinsic similarity. While the knowledge that MuseNet took the actual intro from “Someone Like You,” and used generative AI to make “predictions” for the rest of the song according to prompts suggests objective similarity of these elements, expert testimony would still be helpful and needed to confirm which elements are really present in Sample Song B; for example, there may be subtle note differences that do not necessarily make the song sound different, but are objective differences, nonetheless.²³⁹ This conclusion is ultimately a question of fact requiring technical breakdown by an expert to evaluate the compilation of expressive elements, including those that are part of the melodic hook, for originality. Based on this analysis, a jury can make an informed determination as to whether these elements are sufficiently original to be protected, and if so, whether Sample Song B is substantially similar with regard to that protected expression. Assuming an expert can corroborate the objective similarity that appears to exist, there seems to be a strong case against User B as it pertains to the extrinsic prong. This is especially true in light of cases in which experts found extrinsic similarity in hooks and signature phrases,²⁴⁰ as well as those that emphasized compilations as sufficient for extrinsic similarity.²⁴¹ Within this framework, the copied melodical hook—consisting of the same or at least similar chord progressions, use of arpeggio, pitch, and harmony—coupled with the prominence and similar repetition in both songs, sets up a strong claim for extrinsic similarity.

Importantly in the context of AI-generated music, Adele may want to point to the fact that the song is “in her style” and that the voice sounds very similar to hers. As discussed with Sample Song A, however, courts have been very reluctant to recognize copyright in a style or someone’s voice. Especially in the case of Sample Song B—which is even closer to what has been identified as a soundalike in past cases, as Adele’s voice is not being used at all—it is at most an imitation of her voice type, and thus it seems unlikely that this part of the similarity between the songs could be actionable itself.²⁴² However, this similarity may work to Adele’s benefit under the intrinsic test.

If satisfied, the extrinsic test must be followed by an intrinsic test, which is the subjective prong that puts aside analytical dissection in favor of taking the approach of a reasonable listener. The intrinsic test asks whether ordinary listeners would find the “total concept and feel of the works to be substantially similar.”²⁴³ A jury may find substantial similarity from an overall view, even when individual similarities alone seem trivial.²⁴⁴ This may be important for Adele’s case because the similarity technically boils down to a few chords and how they are played. However, the impact of the arrangement resulted in an internationally recognized piano phrase, as well as a melody and harmony that have been highly successful in conveying a message. In both songs, the phrase starts at the first second, plays without lyrics initially, and repeats after the chorus. While there are some differences in instrumental content and lyrics, a jury could subjectively find that the repeated phrase is substantial. The ordinary listener would likely also find subjective similarity in the combination of those instrumental choices and thematically similar lyrics, suggesting that the songs genuinely evoke similar meanings. In a subjective analysis of the total concept and feel, the similar-sounding vocals may potentially factor in, particularly because both songs are sung by mezzo-sopranos. However, this is unlikely to be the most salient reason for finding intrinsic similarity because mezzo-soprano is the most common female singing voice, and the intrinsic test assumes an untrained ear who would likely attribute the similarity to the unremarkable fact that both vocalists sound feminine, rather than recognizing the specific vocal range.²⁴⁵ Nonetheless, it seems reasonable to conclude that the songs are substantially similar overall. But because the ordinary listener is supposed to truly reflect an ordinary person with no music expertise, it could also go the other way. While the hook phrase is distinctive and impactful, a jury could conclude that in Sample Song B, because of the variation in the accompaniment aside from the phrase, it is not as salient, therefore finding that the works holistically lack the requisite similarity. This ultimately speaks to the challenging nature of anticipating intrinsic analysis results, as the conclusions depend on unknown variables and subjective judgments. Courts consistently reiterate that they will not question the jury’s intrinsic conclusions, therefore there is less to rely on by way of case law because it is not judges who engage in this inquiry.²⁴⁶

The extrinsic-intrinsic test has been criticized for lack of clarity as to both prongs. As will also be discussed with aspects of the following tests, the “total concept and feel” approach seems to conflict with copyright law’s very specific intent to protect original expressions rather than ideas or commonplace expressions of ideas.²⁴⁷ Assuming this test remains in use, however, it may be the approach applied in the litigation of User B. Without knowing the quality of potential expert testimony, it is hard to predict with certainty the outcome. However, case law does suggest that the type of elements that were copied could, if framed as a compilation, satisfy the extrinsic test because there are clearly musical elements that are objectively the same. As for the intrinsic test, the subjective conclusions of the factfinder will ultimately determine the outcome; however, the prominence of the copied phrase, as well as the concept and feel of the emotional ballads, suggest that a jury could potentially find the songs to be substantially similar.

ii. Ordinary Observer Test

The ordinary observer test asks “whether defendant took from plaintiff’s works so much of what is pleasing to the ears of lay listeners, who comprise the audience for whom such popular music is composed, that defendant wrongfully appropriated something which belongs to the plaintiff.”²⁴⁸ Here, because there are similarities between protectable and unprotectable elements, the test will probably be more discerning. In conducting the more discerning inquiry, courts are to try to extract the unprotectable elements and ask whether the remaining protectable elements are substantially similar.²⁴⁹ Protectable elements may either be completely original or original contributions by way of selection, coordination, or arrangement.²⁵⁰ For Adele, this would likely mean focusing on the original selection, coordination, and arrangement of the piano phrase itself and its function in the song through repetition. Once those elements are identified, the factfinder will look to the total concept and feel, focusing on whether the defendant misappropriated the original aspects of the copyright owner’s work. While the original formulation of the ordinary observer test in Arnstein v. Porter references the intended audience, that factor has not typically played a large role and is usually understood to mean the lay listener.²⁵¹ Because the emphasis is almost entirely on total concept and feel, whether MuseNet made minor, audibly imperceptible changes to the phrase may be less important than in the extrinsic inquiry of the extrinsic-intrinsic test.²⁵²

The analysis of Sample Song B under an ordinary observer test will likely resemble the analysis in New Old Music Group, Inc. v. Gottwald.²⁵³ In New Old Music, the infringement claim was based on a drum part consisting of a single measure, which was repeated throughout the allegedly infringing work, ultimately accounting for eighty-three percent of the original work.²⁵⁴ The defendant argued that the individual elements were not sufficiently original to be protected, but the court held that the totality of the drum part could suffice as copyrightable based on its original selection, coordination, and arrangement.²⁵⁵ A reasonable juror in New Old Music could have concluded that the use of the drum part, which could be seen as the original song’s “backbone,” took so much of “what is pleasing to the ears of lay listeners, . . . that [the] defendant wrongfully appropriated something” from the plaintiff.²⁵⁶ Here, the repeated piano phrase could be described as the backbone of “Someone Like You,” and be protected as a unique and original arrangement despite the unoriginality of any individual note. Analyzing the total concept and feel of both songs, a reasonable jury could likely conclude User B substantially misappropriated Adele’s original compilations and thereby infringed on her copyright.

Because this test relies on subjective judgments, the outcome could go the other way. A jury could conclude that the piano phrase and its arrangement were not original,²⁵⁷ or that it is a de minimis aspect of the work²⁵⁸ and therefore the similarity does not pertain to what lay listeners deem pleasing in “Someone Like You.” This was the case in Velez v. Sony Discos, in which the combination of eight-measure phrases was a structure widely used and therefore not original to the plaintiff’s song, and also constituted de minimis aspects of the original song.²⁵⁹ Sample Song B differs from the allegedly infringing song in Velez in that, aside from that structure of phrases, the song was not otherwise similar to the original in melody, harmony, or lyrics;²⁶⁰ Sample Song B, on the other hand, can be alleged to infringe on the arrangement of piano phrases, as well as the resulting melody and harmony that is affected by other expressive choices like arpeggiating the chords. Because of these similarities, it seems likely that a jury could find for Adele under the ordinary observer test, assuming expert testimony does not exclude the possibility of originality.

A key reason the ordinary observer test, discerning or traditional, comes under criticism is that it asks a factfinder to simultaneously separate protectable elements for careful examination and determine substantial similarity based solely on the total concept and feel.²⁶¹ Additionally, ordinary listeners’ impressions regarding whether copying has occurred do not necessarily prove that a violation of the Copyright Act has taken place. These shortcomings could affect Adele’s case against User B in two opposing ways. On one hand, the meticulous separation of protectable elements before conducting a net effect-type of analysis might lead the jury to conclude that what they are merely dealing with individual phrases. Focusing too closely on the individual phrases, as opposed to the whole arrangement, might cause this similarity to be overlooked in a total concept and feel inquiry. If, however, the jury recognizes the arrangement as the “backbone” of the song, this could lessen the issue. Further, in focusing on the total concept and feel, a jury might unintentionally be overinclusive when the vibe of the songs is as similar as “Someone Like You” and Sample Song B. If anything, this emphasizes the importance of expert testimony regarding the originality, or lack thereof, of the elements—whether on their own or as a compilation—to guide the jury before their total concept and feel analysis.

iii. Fragmented Literal Similarity Test

The last test is the fragmented literal similarity test, which has less applicable case law. This test focuses on “localized” similarity based on the idea that identifiable fragments of identical or nearly identical expression should be the basis for an infringement action.²⁶² As such, the substantial similarity question under this test turns on whether the copying involves trivial or substantial elements of the original work, which is determined by quantitative and qualitative assessments.²⁶³ Most cases specifically addressing fragmented literal similarity involve lyrics, so the qualitative significance of instrumental phrases is less explored. However, when considering the qualitative importance of instrumental phrases outside the context of fragmented literal similarity, it has been recognized that small sections can have great qualitative import, such as the four-note opening melody in Beethoven’s Fifth Symphony.²⁶⁴ Here, the specific piano phrase appears at the first second of “Someone Like You,” initially without lyrics for about fourteen seconds; the same phrase continues through nearly three and a half minutes of the song, although there are some additional notes played and volume changes.²⁶⁵ Quantitatively, this is clearly significant. In TufAmerica, Inc. v. Diamond, the court determined that a “distinctive orchestra sequence” from the original song that was about three seconds and consisted of “a series of five punchy ascending chords” was quantitatively significant given that it was repeated seventeen times to ultimately constitute about fifteen percent of the song.²⁶⁶ While a musical expert would need to confirm the actual length of time the phrase appears in original form in “Someone Like You,” it certainly seems to exceed that threshold. The qualitative importance also seems convincing given that the piano is the only instrument, the phrase opens the song instrumentally, making it very recognizable, and the phrase continues with only slight alterations, thereby functioning as a common thread through the whole work. Under this test, it seems highly likely Adele would prevail.

However, this test seems least likely to apply. First, it is not as commonly used as the other tests. Second, there is much more at issue than just fragmented literal similarity, especially considering that the desire to legally target Sample Song B likely has as much to do with the fact that User B used AI to create a song that intentionally sounds like Adele as it has to do with the use of the phrase; “local” and “global” similarity are expected concerns for artists whose works are pirated by AI. Third, the fact that the phrase is slightly sped up and may contain slight differences due to how it was generated suggests the other tests may be better suited for this case.

User B’s final opportunity to argue that their conduct falls within the bounds of the Copyright Act without constituting infringement is by asserting the fair use defense. Because the same analysis likely applies to User B’s use of the recording as well, the fair use discussion below addresses both components of the song together.

The Sound Recording

The analysis thus far has focused on the composition. Infringement of the sound recording of “Someone Like You” requires a literal duplication of the recording.²⁶⁷ Based on the language of the Copyright Act, whether the rights in the recording have been infringed depends entirely on how MuseNet creates music using introductions from existing songs:

(a) The exclusive rights of the owner of copyright in a sound recording are limited to the rights specified by [the] clauses [pertaining to the reproduction, adaptation, distribution, and the public performance by digital audio transmission rights] . . . . (b) The exclusive right of the owner of copyright in a sound recording under [the reproduction right] is limited to the right to duplicate the sound recording in the form of phonorecords or copies that directly or indirectly recapture the actual sounds fixed in the recording. The exclusive right of the owner of copyright in a sound recording under [the adaptation right] is limited to the right to prepare a derivative work in which the actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality.²⁶⁸

MuseNet trains on MIDI files, which capture data that can be seen as a “symbolic representation of music.”²⁶⁹ Essentially, a MIDI file records data about the notes in a song, including pitch, volume, and time nodes, which can then instruct the reproduction of musical compositions.²⁷⁰ Importantly, MIDI files are not audio recordings and cannot transmit audio.²⁷¹ This means that, unlike Uberduck, MuseNet technically never even “hears” the sound recording; it only trains on the computer language that indicates how the composition is played. Therefore, a MIDI file of “Someone Like You” could not possibly result in exact duplication of the protected recording being used in Sample Song B because the recording itself is not transmitted. This information alone suggests that User B cannot be liable for infringement of the sound recording of “Someone Like You,” and Adele would have to rely on allegations of infringement of the composition as discussed earlier.

While the literal language of the statute suggests that copying using a MIDI file is not an actionable infringement of the recording, a more in-depth inquiry as to whether this is so black-and-white is warranted considering that many AI music generators train on MIDI files. The starting point for this inquiry is legislative intent. The Digital Performance Right in Sound Recordings Act of 1995 (“DPRA”) created an exclusive performance right for sound recordings, specifically granting the right to perform by “means of a digital audio transmission.”²⁷² In doing so, section 114 was also amended to add the relevant limitations on the performance right. The House Report accompanying the DPRA explicitly states that the right applies only to digital audio transmissions, which is consistent with the language of section 114 concerning reproduction and adaptation rights.²⁷³ Additionally, it specifies that a “digital phonorecord delivery” refers to the delivery of a recording by digital transmission.²⁷⁴ From this, it is clear that while the rights associated with sound recordings were expanded to adapt to technological developments, they were not explicitly extended beyond the transmission of the actual recording. However, the House Report does note that because the bill does not “precisely anticipate particular technological changes,” they intend that the rights, exemptions, and limitations created should be interpreted to “achieve their intended purposes.”²⁷⁵ This is at least suggestive of the understanding that the language may not be precise enough to cover all technologies and potential infringements. In 2018, Congress passed the Musical Works Modernization Act with the intent of updating copyright law to increase fairness for creators regarding statutory licensing.²⁷⁶ While this points to an ongoing concern about protecting artists in the advent of technological innovation, it does not change how digital transmission is defined. Legislative intent seems to indicate that Congress’s focus is to protect the actual sound recording. However, the concern about the future evolution of technology nonetheless remains relevant.

The Office has also provided some perspective on MIDI files and the sound recording requirement. As of 2021, the Office “does not consider standard [MIDI] files to be phonorecords and will not register a copyright claim in a sound recording contained in a standard [MIDI] file.”²⁷⁷ The Office elaborates that, because MIDI files do not capture sounds and only capture the underlying score, they are insufficiently fixed to be copyrighted as sound recordings, though they may suffice for musical works.²⁷⁸ While this does not directly address MIDI files in the context of infringement, this is clear evidence that the Office is aware of how MIDI files operate in the music context and continues to view them as fundamentally different from sound recordings. If the Office does not consider MIDI files to be fixations of the recording itself, it is a difficult argument to suggest it should constitute a sound recording for the purposes of infringement.

Case law does not seem to have addressed this issue directly. However, there is a wealth of judicial interpretation of section 114 and what is meant by the requirement that sound recordings be duplicated to qualify as infringement.²⁷⁹ This conclusion aligns with the language of the statute and its intended purpose. Therefore, even if Sample Song B sounds like it was sampled, current interpretations of the Copyright Act would instruct a court to conclude that Sample Song B did not infringe on Adele’s exclusive rights in the sound recording of “Someone Like You.” Undeniably this would be incredibly frustrating for an artist in Adele’s shoes; changing one fact—how the song was duplicated—could open the door to receiving royalties for sampling. This bears similarity to the frustration artists feel in cases involving songs like Sample Song A in which they justifiably feel that their hard work has been “appropriated,” yet that appropriation is simply not cognizable under current copyright law.

However, given that this case presents new issues that have not yet been addressed directly, it is possible that using the original in this specific way could be considered an exact duplication. Based on the DPRA and Congress’s intent to protect the ability to earn royalty revenues in the digital age, it may be a fair extension to consider the extraction and use of exact portions of a song using MIDI technology to be within what was meant by an actual duplication. There is no human involvement in using MIDI files to recreate the exact instrumentals; they are fed to the AI system to learn, train on, and reproduce with predictions. By possessing the MIDI file, the system autonomously makes an exact replica of the song. In fact, the point of MIDI files is to enable the creation of exact replicas, as it is a type of file that can direct notes and instruments to be played. While that seems to sound like a process akin to a person who uses their own instrument to recreate a song, which is acceptable under the Copyright Act, the lack of human involvement may persuade a court to conclude that this process falls outside the scope of what Congress intended to allow without obtaining a license.

If this is considered to be sampling, there are several potential rights for Adele to argue infringement upon; by its very nature, sampling may infringe on the reproduction and distribution rights, and courts have found that sampling infringes on the adaptation right by harming the market for future derivatives.²⁸⁰ In determining whether this sample infringed on those rights, courts would likely apply the same requirements for a successful infringement action. The only instance in which the fact of sampling alone would be sufficient is if a court strictly adheres to the holding and reasoning from Bridgeport. Because this would be considered an exact duplication, the factual copying prong would easily be satisfied. As to the legal prong, it seems that Sample Song B would likely be found to be substantially similar to “Someone Like You” for the same reasons as discussed regarding the musical composition. Further, the fair use inquiry would be important in determining whether User B is liable for infringing Adele’s copyright.

Absent such a change in interpretation or amendment of the Copyright Act, it seems unlikely that Adele would succeed on a claim of infringement on the sound recording. Given that AI systems often train on MIDI data, this is something that may be addressed in the Office’s future reports. While arguments about style pirating by generative AI systems seem unlikely to influence changes in copyright protections, arguments about near-duplication by MIDI files align more with adjusting copyright law to address technological changes. Ongoing concerns about royalties and protecting rights in ownership of a sound recording may demand attention to this MIDI “loophole.” Because this situation presents a good opportunity to reconsider what exactly is meant by exact duplications, it is worth considering how Adele’s infringement action would proceed if User B’s use of MIDI files does qualify as sampling. Since the required elements of an infringement cause of action are likely satisfied, the outcome for the recording probably depends on fair use, as that is User B’s last opportunity to attempt to show that their conduct is not prohibited by the Copyright Act.

Fair Use Defense

Regarding both the musical composition and the sound recording, User B will likely at least plead fair use in their answer to a suit alleging infringement by Adele. Nevertheless, like other music copyright cases, it is not guaranteed that this defense will be litigated. In asserting a fair use defense, User B will have the burden of justifying their use of the original phrase, including its intact melody, harmony, and rhythm. If successful, they will be relieved from liability because fair use is an affirmative defense.²⁸¹ Because there are only a handful of fair use music cases that involve non-parody uses, with a notable absence of case law addressing the use of instrumental sections, the following analysis largely relies on analogies to other applications of the defense.

The first factor is the “purpose and character” of the use.²⁸² The key question is one of transformation. Post-Goldsmith, this inquiry is more demanding and requires looking beyond whether the use adds something new. When the use is essentially the same as the original, as is the case here, a compelling justification is required.²⁸³ There is certainly an argument that the use here is transformative, simply based on the nature of MuseNet and the resulting composition. The intro to “Someone Like You” served as the basis for Song B, but then the AI system used predictive technology to construct much of the remaining composition, revisiting the original phrase only occasionally. In a literal sense, User B, via MuseNet, transformed the phrase by pairing it with new instrumental phrases. While this fits the definition of literal transformation, a more compelling argument would exist if the song retained less of the original in its essentially unchanged form. Since most uses incorporate some addition, the inquiry must also consider the extent to which the purpose differs.²⁸⁴ Sample Song B does not fit into any of the criteria from the preamble of § 107,²⁸⁵ but that does not preclude a sufficiently different purpose. In Estate of Smith, the court found that the use of lyrics to discuss music generally served a “sharply different” purpose than the lyric’s original purpose or goal of commenting on the “primacy of jazz music.”²⁸⁶ Whether this conclusion would be accepted under Goldsmith, which was decided later, is questionable because the Court held that transformation cannot be based on the “stated or perceived intent of the artist.”²⁸⁷

Regardless, while there are changes in the instrumental phrasing and added lyrics, the lyrics reflect very similar themes, and the music serves the same purpose of setting a somber tone. While more specifics about the lyrics and the message of Sample Song B are needed to confirm this conclusion, the available information suggests that the purpose of using the piano phrase is not even as different as that of the use in Estate of Smith, which also arguably lacked significant differences. Because of the exact portions of piano used, along with several other nonliteral similarities, it seems unlikely that User B could sufficiently demonstrate a compelling justification or a distinct purpose. The Goldsmith Court noted that Campbell cannot be read to say that any use that adds something new counts in favor of fair use because, if it did, a “commercial remix of Prince’s ‘Purple Rain’” would weigh in favor of fair use purely because it added some new expression to the song.²⁸⁸ Thus, Sample Song B is arguably just a remix of the instrumentals in “Someone Like You,” which fails to serve any significant unique purpose because it uses the phrasing to evoke the same theme and musical vibe. Therefore, it seems unlikely that a court would find the first factor to favor fair use here.

The second factor is “the nature of the copyrighted work.”²⁸⁹ This factor examines whether the work is creative or expressive.²⁹⁰ This factor weighs strongly against fair use because the copyrighted work is an original, creative musical work. Because this is somewhat uncharted territory, User B could argue that the creative nature of the original song is less relevant because what was used can be broken down into a chord progression, and there are only so many combinations of such progressions; User B may then argue that courts should look at these chords more like facts or nonfiction works. This argument is not particularly persuasive given that Sample Song B uses the same arrangement of the chord progressions, maintaining the original melody and harmony, which clearly speaks to the creative choices made in “Someone Like You.” Nonetheless, this factor is rarely significant in a final fair use determination.²⁹¹

The third factor pertains to the “amount and substantiality of the portion used in relation to the copyrighted work as a whole.”²⁹² User B will certainly argue that they used only what was required for the generative AI system to create predictions and compose a new song in accordance with those predictions. While User B is not required to use only the minimum amount needed for the system to function,²⁹³ the significant amount used, coupled with the lack of obvious transformation in the resulting song, will likely work against them. This factor is less likely to favor fair use when there is extensive copying or when the use encompasses “the most important parts of the original.”²⁹⁴ While in Oracle, the amount of code used was reasonable in proportion to the transformative use,²⁹⁵ the use of exact news segments in Fox News Network, LLC v. TVEyes, Inc. was extensive and included all of the important parts of the original news segments, thereby failing to qualify as fair use.²⁹⁶ User B’s use of the piano phrase likely falls between these two cases, as it does not use the entire composition, but still uses so much of what is important from it. As with the other two factors, this factor would likely count against fair use here.

The final factor, often deemed the most important, asks about the “effect of the use upon the potential market for or value of the copyrighted work.”²⁹⁷ This factor requires looking beyond the immediate situation to consider whether widespread conduct of this kind “[might] adversely affect the potential market for the copyrighted work.”²⁹⁸ As noted earlier, this factor’s application in the music context is unclear, as it has received little judicial attention. Since the use is unlikely to be deemed transformative, Song B is more likely to pose a risk of market substitution. However, this conclusion is based on an approach that is not typically applied to music cases like this one. User B will certainly argue that listening preferences are subjective and the use of the piano phrase to create a similarly emotional ballad may not clearly harm the market for the original the way the complete replication of news segments and distribution of clips would render paying for the original largely unnecessary.²⁹⁹ However, a California court, addressing an allegedly infringing song in Frisby, held that two songs within similar genres were competitors; as such, the court concluded that when a latter song copies important elements of the original, the value and sales of the original are expected to be diminished because “the copy supersedes the objects of the original creation thereby supplanting [it].”³⁰⁰ Sample Song B is clearly within the same genre as “Someone Like You,” so a court may deem them to be market competitors. Assuming these two songs qualify as market competitors, the subsequent question becomes whether Sample Song B copies an important element of “Someone Like You,” thereby supplanting the original. For the reasons discussed throughout this Note, the copied piano phrase is clearly a critical part of “Someone Like You,” as it is recognizable and serves as the instrumental accompaniment for most of the song. If a court agrees with this determination of importance, it will likely count against fair use.

The court in Frisby further explained the importance of considering the market for derivative works that may be affected by a later use; in that case, the court found that if the sample were considered fair use, it would “destroy the market for derivative works based on [the original song].”³⁰¹ While that conclusion was linked to the existence of a “flourishing market” for derivatives of the original song,³⁰² the premise that such a decision would result in future users not bothering to pay licensing fees would still apply here, even if there is no such flourishing market for “Someone Like You.” Fair use cases pertaining to all types of work often consider the potential chilling effects on the market. Finding Sample Song B’s use to be fair use could certainly undermine the efficacy and profitability of an established system of licensing.³⁰³ By referencing sound recordings, the DPRA reflects congressional concern about the livelihoods of artists and individuals who rely on licensing revenue. Allowing this substantial amount of copying to be fair use would likely lead many future users to forgo obtaining a license. Further, the court in Sony Music Entertainment v. Vital Pharmaceuticals, Inc. held that when a user “completely ignore[d] the market for music licensing,” the burden shifts to the user to demonstrate that their use is not likely to harm the market for the original.³⁰⁴ Therefore, because User B did not obtain a license to use any part of “Someone Like You,” they would be responsible for producing evidence that Sample Song B did not negatively affect the market for the original. Adele’s unrealized royalties in this case would be limited to licensing revenues for “traditional, reasonable, or likely to be developed markets.”³⁰⁵ However, based on statutory requirements and industry practices, music licensing qualifies as a developed market. Therefore, this limitation is unlikely to have a significant impact in the music context.

Even if the use of MIDI files renders the use a mere imitation rather than a duplication infringing upon Adele’s rights in the recording, the result may be the same for this fourth factor, as a finding of fair use would necessarily imply that the MIDI loophole provides an acceptable way to avert infringement. This is problematic for the sampling and licensing market because those who would normally obtain a license to sample “Someone Like You” and other songs may instead copy the songs via MIDI technology. While such an approach would be unwise, considering that it does not remove potential liability for infringement of the musical composition, it would nonetheless provide a way to avoid paying licensing fees, which some AI users would likely exploit. Therefore, the chilling effect is likely to occur regardless of whether the use is characterized as sampling or a literal duplication. Further, the piano phrase is an important part of “Someone Like You,” both in the actual recording and in the composition, which is copied exactly. Therefore, Sample Song B may supplant the composition and thereby harm the sales and value of “Someone Like You.”

While predictions about fair use are necessarily speculative given the unique factors here, the application of analogous precedent suggests that, at a minimum, User B does not have a very compelling fair use defense. Future application of fair use in music by courts will be instructive, as will opinions addressing generative AI more specifically. A particularly important question to be answered will be how generative AI works that use predictive models will hold up against a transformation inquiry, as that factor typically seeps into the other three as well. Until courts provide such insight on how fair use and infringement apply to generative AI songs, Adele seems to have a decent case for infringement of the composition, so long as the subjective assessment leans in her favor. Infringement of the rights in the sound recording copyright, however, seems to present a less promising case under current interpretations of the Copyright Act.

IV. POLICY IMPLICATIONS

The analyses of Sample Songs A and B clearly suggest that current copyright law does not provide obvious answers to several questions that arise in the context of generative AI music and, more generally, AI technology. While certain provisions of the Copyright Act are intentionally broad to allow for changes, and amendments have addressed specific deficiencies identified by Congress, a fundamental deficiency arises from the fact that they did not design the Act with this advanced of technology in mind. For example, the limitation of rights in a sound recording to exact duplications was not promulgated with the expectation that machine learning algorithms would eventually train on data and duplicate it exactly through what technically qualifies as an independent fixation under the statute. Whether these deficiencies are addressed through amendments, judicial decisions, or administrative policies, a determination stands to be made as to whether specific new rules or exceptions are needed, or if the broad language of the Act should remain, with adjusted, AI-specific or AI-sensitive interpretations.³⁰⁶

Specific rules aside, the contentious situations created by generative AI music highlights the continuing struggle to balance protection for creators with the benefits of rapidly advancing technology. As the Court noted in Twentieth Century Music Corporation v. Aiken, the Copyright Act and its provisions are intended to reflect “a balance of competing claims upon the public interest.”³⁰⁷ On one side of the spectrum, it is important to recognize the societal value of music and properly appreciate the talent it takes to release authentic, moving pieces of work.³⁰⁸ If we want musically talented individuals to continue to pursue these creative aims and provide us with entertainment, their creative expression must continue to enjoy protection. This is a particularly salient concern given the sensitivity of the creation involved, as one artist is a vulnerable human, baring their soul, and the other “artist” is an inherently non-creative and non-vulnerable trained machine.

On the other end of the spectrum is the necessary recognition of the importance of encouraging technological advancement and pursuing a more efficient society. If the use of generative AI is aggressively cabined by the risk of copyright infringement litigation, the world may miss out on valuable works. While the protection of artists is undeniably important, it cannot be forgotten that protections are limited because the ultimate goal is to promote creativity for the public good.³⁰⁹ Further, this could have a chilling effect beyond the music industry, impacting industries in which the use and advancement of this technology could change the world or save lives. Even within the music industry, if we limit the usage of AI by non-owners, how might that precedent impact the use of AI by owners themselves? Currently, similar technology is used in recording studios to make original songs and, particularly, to improve songs before they are released.³¹⁰ Artists would agree that this use is not the aim of cracking down on copyright infringement, but it would potentially be difficult to keep these uses separate and may result in frivolous and undesired suits between disgruntled artists and producers. Further, we need to determine the weight that the creative input of the user has on what uses are more permissible because not all AI systems dominate the creation without meaningful human input. Determining how and where to draw this line is far from simple and will necessarily depend on an increased understanding of the technology, assessment of policy priorities, and, to some degree, value judgments regarding what aims our society deems most important.

CONCLUSION

Generative AI music presents a whole host of new questions, considerations, and potential implications for how copyright holders vindicate their ownership. While the application of current copyright law and precedents to these situations involving AI-generated music does not provide fully satisfying answers as to what will happen when songs like these land on court dockets, it does direct attention to the chief policy concerns and areas in which artists are vulnerable. With regard to “Fake Drake,” the analysis of Sample Song A suggests that an infringement suit based on AI-generated soundalikes is unlikely to be successful. While a better understanding of the technology involved in AI-generated music may lead to stronger sampling claims, addressing “Fake Drake” is likely a matter better suited for trademark law and the right of publicity. Sample Song B presents slightly brighter prospects for artists to litigate AI-generated songs they believe infringe on their existing, copyrighted work. But these results are somewhat tentative, pending a better understanding of the technology and, ideally, insight from the Office.

What can be said for certain is that our understanding and expectation of how these cases will unfold are crucially informed by our understanding of the generative technology that ultimately creates the works. From the amount of user input to training data, there are many more considerations for actionable infringement than in a case of one person consciously copying the lyrics of a song by copying and pasting them onto new sheet music. As more is understood about how this technology actually uses existing songs to create new ones, the more we can apply the principles of copyright law and identify the gray areas that need clarification. To call these situations and concerns complicated would be a vast understatement. But if copyright law is to achieve its aims of “promot[ing] the Progress of Science and useful Arts,”³¹¹ while also continuing to provide adequate protection for “original works of authorship,”³¹² even in the face of alluring technological developments, work must be done to decipher between these considerations and identify those that are legally cognizable. While Drake likely cannot

vindicate his copyright ownership rights by taking Fake Drake to court, future artists similarly affected might face a different trajectory thanks to “Heart on My Sleeve,” and how it turned the country’s attention to the question of how copyright law interacts with generative AI music.

98 S. Cal. L. Rev. 663

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Melissa Schneider*

* Executive Senior Editor, Southern California Law Review, Volume 98; J.D. Candidate 2025, University of Southern California Gould School of Law; B.A. 2022, University of Arizona, W.A. Franke Honors College. Thank you to Professor Barnett for his support and guidance, and to the members of the Southern California Law Review for their thoughtful suggestions.

INTRODUCTION

I. Fair Use: Law and Theory

A. The Fair Use Doctrine

B. Theoretical Justifications of the Fair Use Doctrine

II. Fair Use as Licensing Leverage

A. The Theory

B. The Model

C. Illustrations

Oracle and the Future of Licensing in Technologies

Documentary Filmmakers

Parodies and Satires

Warhol and the Future of Transformativeness

III. Normative Implications

A. Countervailing Allocative Inefficiencies

B. Redistributing Bargaining Surplus

C. The Role of Damage Awards

D. The Latent Virtue of Ambiguity

Conclusion

98 S. Cal. L. Rev. 761

INTRODUCTION

I. BACKGROUND: GENERATIVE ARTIFICIAL INTELLIGENCE

A. How the Technology Works

B. Generative AI in the Music Context

C. Copyright Office on AI

II. LEGAL BACKGROUND: COPYRIGHT LAW

A. Requirements for Protection

B. Rights Conferred by Copyright Ownership

Reproduction Right

Adaptation Right

Distribution Right

C. Additional Music-Specific Considerations

1. Musical Composition Versus Sound Recordings

Licensing and Sampling

D. Copyright Infringement Actions

Ownership of a Valid Copyright

Copying

Fair Use Defense

III. APPLICATION AND ANALYSIS

A. Sample Song A

Factual Copying

Legal Copying

B. Sample Song B

Factual Copying

i. Extrinsic-Intrinsic Test

ii. Ordinary Observer Test

iii. Fragmented Literal Similarity Test

The Sound Recording

Fair Use Defense

IV. POLICY IMPLICATIONS

CONCLUSION

98 S. Cal. L. Rev. 663

Table of Contents