AI, Copyright, and the Courts: What Business Owners Should Know

AI, Copyright, and the Courts: What Business Owners Should Know

As artificial intelligence continues to grow, so do the legal questions around how it’s built. A recent court decision in San Francisco has caught the attention of the tech world, and it could shape how businesses and innovators use AI in the future.

This post breaks down what happened, why it matters, and what local business leaders should watch for as AI becomes more common in everyday tools.

The Case: Anthropic and Copyrighted Books

Anthropic, an AI company, was taken to court for using millions of copyrighted books to train its large language models. According to a report by Forbes, the company had acquired physical copies of books, removed their bindings, scanned the pages, and stored them digitally. These books became part of a private research library used to train its AI.

A federal judge ruled that this use was “exceedingly transformative” and falls under fair use in U.S. copyright law. In other words, because the books were not simply copied and redistributed, but used to teach AI systems how to process language, the court viewed the activity as legally protected research.

However, the judge also found that Anthropic’s possession of pirated digital books was a violation of copyright. A future trial will decide how those pirated materials may have been used.

Why This Matters for Small Businesses

While this may sound like an issue only for big tech companies, it sets a tone for how courts might handle similar questions in the future. That matters for any business owner using, or considering, AI tools for tasks like content creation, customer service, marketing, or data analysis.

Here’s what to take away:

• AI development is still legally unsettled. Court decisions are shaping what’s allowed.
• Using AI tools responsibly is key. Choose tools that are transparent about how they’re trained and what data they use.
• Innovation and ethics go hand in hand. As AI becomes more common, businesses will need to balance speed with responsibility.

Want to understand how AI might benefit your business? Listen to this episode of the Connect Podcast where Adam dives into the practical side of AI.

Take the next step: Stay informed about how new technologies could impact your business. Reach out to the Chamber with questions, or explore upcoming sessions that cover AI, marketing, and digital tools.