Luca Schirru and Sean Flynn

At the beginning of May, the report “Copyright and Artificial Intelligence. Part 3: Generative AI Training” was released, sparking a wide range of debates due to its content and the political issues surrounding its release. In this short contribution, we aim to briefly introduce the report and touch on some of the key content and political issues currently being discussed.

SCOPE AND STRUCTURE OF THE REPORT

The first thing that stands out about the report appears right on its first page: “pre-publication version”: a label reported as unusual and potentially unprecedented.1 The 113-page document addresses one of the most controversial issues at the intersection of copyright and Generative AI: the use of protected content to train Generative AI systems. 

While most sources focus on fair use, the report also includes sections on “technical background,” “infringement,” and “licensing for AI training”, all of which are a “must read,” especially for those just joining the discussion and feeling overwhelmed by the hundreds of thousands of articles, blogs, books, and other resources available on the topic. The report attempts to summarize some of the main issues in both the legal and technical fields.

The approach taken by the USCO is sometimes described as “favorable to copyright owners”2 or as “a mixed bag”,3 receiving both praise and criticism on multiple fronts, as we will illustrate below.

POLITICAL CONTEXT AND CONTROVERSIES

The timing of the report

While it may be early to determine the precise reasons behind the (unusual) release of a pre-publication version, several explanations have been speculated, though none have been confirmed. The report states that its early release was made “in response to congressional inquiries and expressions of interest from stakeholders.” However, questions have been raised that may relate to concerns about potential restrictions under Trump Administration, which is arguably aligned with positions favorable to big technology companies,4 as well as fear that the report could be buried in the event of the dismissal of the Register of Copyright, or the potential influence on ongoing legal cases.5

Regarding the latter, there have been concerns about the timing of the report and how it could interfere with the outcomes, especially the fair use analysis, of ongoing lawsuits. As noted, “it could put a thumb on the scale for how the courts will resolve these cases,” without giving the parties an opportunity to address any potential gaps in the report, which could have a significant impact on other GenAI cases.6

Leadership changes and copyright policy

While the timing of the notice of dismissal of Shira Perlmutter (Register of Copyrights at the time the report was drafted)7 and the release of the report could give rise to the inference that the report was the sole reason for her dismissal, other events may have influenced the decision as well.

The day before the release of the (pre-publication version of the) report, the Librarian of Congress, Carla Hayden, who had appointed Shira Perlmutter, was dismissed. Therefore, concerns about additional leadership changes may also have played a role in the decision to release the pre-publication version.8 An extra layer of complexity arises when one considers that Perlmutter’s position was one appointed and overseen by the legislative branch.9

The argument that the report may have contributed to the dismissal has often been linked to an alleged alignment between the Trump Administration’s position and that of big tech companies. This connection can be inferred from Rep. Joe Morelle’s statement, reported by POLITICO, claiming it is “no coincidence [Trump] acted less than a day after [Perlmutter] refused to rubber-stamp Elon Musk’s efforts to mine troves of copyrighted works to train AI models.”

Finally, as reported by Authors Alliance, on April 30, “American Accountability Foundation urges President Trump to fire ‘deep state’ librarians, targeting Carla Hayden and Shira Perlmutter,” based on the claim that Hayden was supporting Biden policies, particularly in the areas of intellectual property and transgender rights.

FAIR USE AT THE HEART OF THE DEBATE

While the report addresses multiple issues, both legal and technical, the most debated (and anticipated) topics are those related to whether the use of protected content to train Generative AI systems qualifies as fair use. The fair use chapter is the longest in the report, comprising nearly half of its content. It includes a factor-by-factor analysis applied to different scenarios, with the USCO identifying the first and fourth factors as taking on particular prominence in the analysis. In the section titled “weighing the factors,” the Office states the following:

“As generative AI involves a spectrum of uses and impacts, it is not possible to prejudge litigation outcomes. The Office expects that some uses of copyrighted works for generative AI training will qualify as fair use, and some will not. On one end of the spectrum, uses for purposes of noncommercial research or analysis that do not enable portions of the works to be reproduced in the outputs are likely to be fair. On the other end, the copying of expressive works from pirate sources in order to generate unrestricted content that competes in the marketplace, when licensing is reasonably available, is unlikely to qualify as fair use. Many uses, however, will fall somewhere in between.” (p.74)

While there has been some agreement with certain parts of the report, such as the acknowledgment that litigation outcomes cannot be prejudged,10 and the view that “research and academic uses should be favored under the fair use analysis”,11 one of the most criticized aspects is the interpretation of the fourth factor in the fair use analysis, in which the Report concludes that original works created by AI that are not substantially similar to works used in the training may nonetheless result in “market dilution” that should weigh against a fair use analysis. According to USCO’s report:

“While we acknowledge this is uncharted territory, in the Office’s view, the fourth factor should not be read so narrowly. The statute on its face encompasses any “effect” upon the potential market.373 The speed and scale at which AI systems generate content pose a serious risk of diluting markets for works of the same kind as in their training data.374 That means more competition for sales of an author’s works and more difficulty for audiences in finding them. If thousands of AI-generated romance novels are put on the market, fewer of the human-authored romance novels that the AI was trained on are likely to be sold. Royalty pools can also be diluted.”

Evidence that AI-created work may compete with human-created works is emerging.12 However, the theory that the impact of such works should be relevant under factor four, even if there is no substitution effect in relation to a specifically identified work, has faced criticism. Commenters cite a lack of adoption of this general impact analysis by courts in fair use analysis.13

Although the U.S. Copyright Office’s reports and decisions do not make law, they influence current litigation, including under a Skidmore deference standard.14 Several open questions remain: even though the report states that the final version will be published “without any substantive changes expected in the analysis or conclusions,” could there still be changes to its substance, particularly on the more “controversial” issues? Will its findings influence ongoing cases? The latter is especially significant, as the outcomes of these cases may shape how such uses are viewed globally, and no country is likely to risk falling behind in the AI race by regulating AI training more restrictively than others.15

  1. Aaron Moss, Five Takeaways from the Copyright Office’s Controversial New AI Report (Copyright Lately, May 11, 2025), https://copyrightlately.com/copyright-office-ai-report/. Dave Hansen, The Copyright Office Report about Fair Use in AI & the Dismissal of the Register of Copyrights: A Drama in Three Parts (Authors Alliance, May 12, 2025), https://www.authorsalliance.org/2025/05/12/the-copyright-office-report-about-fair-use-in-ai-the-dismissal-of-the-register-of-copyrights-a-drama-in-three-parts/. ↩︎
  2. Copyright Lately (2025). See also, Tori Noble, Mitch Stoltz and Corynne McSherry,  The U.S. Copyright Office’s Draft Report on AI Training Errs on Fair Use (Electronic Frontier Foundation, May 15, 2025), https://www.eff.org/deeplinks/2025/05/us-copyright-offices-draft-report-ai-training-errs-fair-use?s=09. ↩︎
  3. Authors Alliance (2025). ↩︎
  4. Authors Alliance (2025). ↩︎
  5. Barry Sookman, Generative AI Copyright Report from U.S. Office Revealed (Barry Sookman, May 11, 2025), https://barrysookman.com/2025/05/11/generative-ai-copyright-report-from-u-s-office-revealed/. ↩︎
  6. Authors Alliance (2025). See also EFF (2025). ↩︎
  7. Katherine Tully-McManus, Trump fires top US copyright official (Politico, May 10, 2025), https://www.politico.com/news/2025/05/10/trump-u-s-copyright-official-00340306. 
    ↩︎
  8. Copyright Lately (2025). ↩︎
  9. Politico (2025). ↩︎
  10. Re:Create, Re:Create Statement on USCO AI Report Pt 3 (May 11, 2025),  https://www.recreatecoalition.org/press_release/recreate-statement-on-usco-ai-report-pt-3/. ↩︎
  11. Authors Alliance (2025). ↩︎
  12. Deezer, Deezer reveals 18% of all new music uploaded to streaming is fully AI-generated (Deezer, April 16, 2025), https://newsroom-deezer.com/2025/04/deezer-reveals-18-of-all-new-music-uploaded-to-streaming-is-fully-ai-generated/.  ↩︎
  13. Copyright Lately (2025), Re:Create (2025) and EFF (2025). ↩︎
  14. Copyright Lately (2025). ↩︎
  15. Author Luca Schirru thanks Sérgio Branco for raising a similar issue to the latter. ↩︎