Business Law Journal

What happens when a judge issues a decision based on legal authority that does not exist?  And what happens if the party adversely affected by that phony decision was oblivious to that fact until after the order was issued?  In what feels like a sign of the times, the California Court of Appeal recently confronted an issue that would have been unthinkable a few years ago: a court order based, in part, on case law that was entirely fabricated by a computer program and no one blinked an eye—at least until it was too late.

According to two significant back-to-back rulings from the Northern District of California, using copyrighted books to train large language models (LLMs) qualifies as fair use under the Copyright Act, but the opinions differ on the impact of whether the copyrighted works were legally obtained or pirated on finding fair use.