Insights

Chicago – June 11, 2025: Managing Intellectual Property has recognized 12 Crowell & Moring attorneys and four practices in its 2025 IP Stars guide. The guide, which is in its seventh edition, “brings together the world’s foremost law firm and corporate trademark experts, allowing the wider community to benefit from their insight, experience and perspectives.”

Twenty years ago, the Supreme Court held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 919 (2005). In the Grokster case, the Supreme Court found that peer-to-peer file sharing companies could be liable for copyright infringement for their users’ deployment of file sharing software. There, the Court found that liability was warranted because the file sharing companies knew that its users were infringing, and the companies materially contributed to that infringement.

Last week, artificial intelligence companies won two significant copyright infringement lawsuits brought by copyright holders, marking an important milestone in the development of the law around AI. These decisions – Bartz v. Anthropic and Kadrey v. Meta (decided on June 23 and 25, 2025, respectively), along with a February 2025 decision in Thomson Reuters v. ROSS Intelligence – suggest that AI companies have plausible defenses to the intellectual property claims that have dogged them since generative AI technologies became widely available several years ago. Whether AI companies can, in all cases, successfully assert that their use of copyrighted content is “fair” will depend on their circumstances and further development of the law by the courts and Congress.

Will the Supreme Court review the Ninth Circuit’s unique Server Test for online copyright infringement? After the Ninth Circuit recently affirmed the Server Test, a photographer and copyright owner has requested certiorari. Petitioner-Plaintiff, Elliot McGucken, is a landscape photographer. Respondent-Defendant, Valnet, Inc., is the owner of a travel website located at “www.thetravel.com.” McGucken sued Valnet for copyright infringement when Valnet embedded on its site a number of links to McGucken’s Instagram posts. The district court, bound by the Ninth Circuit’s en banc decision in Perfect 10, granted Defendant’s motion to dismiss, finding that the Server Test foreclosed McGucken’s direct infringement claim as a matter of law, because Valnet linked to the images and did not store them on its own servers. The Ninth Circuit affirmed in a panel decision. McGucken now requests the Supreme Court to review the validity of the Server Test, which is unique to the Ninth Circuit.

Artificial intelligence and the metaverse are two of the most rapidly evolving technologies today, testing the boundaries of intellectual property law. While the swift expansion of AI in all industry sectors can be thrilling, it also presents challenges in terms of protecting and encouraging artistic and scientific endeavors. A principal challenge for authors, creators, and corporations is how to protect creative endeavors from the threat of consumption and reproduction by AI engines, while at the same time realizing the promise of AI-conceived and -developed creative and technological advances. This fundamental IP conundrum also arises in the evolving metaverse.