Augmented Advocacy Series (Bermuda): Copyright infringement in the age of AI

Published: 28 Nov 2024
Type: Insight

Artificial intelligence is revolutionising the way that humans solve problems and create.

Tools such as ChatGPT are used to generate just about anything and as powerful as these AI tools are, AI comes with complexities and important considerations.

AI refers to systems that can perform tasks that typically require human intelligence. At a high level, AI works through machine learning algorithms, allowing systems to learn from data.

AI models are trained on large data sets that allow it to recognise patterns and make predictions. After training, the AI model can generate new data – for example, systems such as ChatGPT or Stable Diffusion.

Such systems are intentionally programmed to search for, find, sample and reproduce relevant segments of existing works as an inherent part of its programming.

So that raises the question: with the use of AI-generated work, does the potential for copyright infringement arise as an unintentional mistake, or as an intended, purposeful design?

Copyright law protects the rights of creators against unauthorised reproduction of their work with its aim being to encourage and promote innovation through the creation of original works.

Bermuda’s copyright law, the Copyright and Designs Act 2004, does not provide protection for AI-generated work.

Copyright infringement occurs when someone reproduces the whole or a substantial part of an author’s work without the author’s permission and where none of the permissive exceptions to copyright law apply.

The courts have interpreted “substantial part” to mean a qualitatively significant part of the work, therefore even a small portion of work can be substantial.

As court cases continue to unfold, the copyright legal landscape begins to take shape and starts to reform UK copyright law, which means Bermuda is sure to quickly follow suit.

In the recent UK High Court case of Getty Images v Stability AI, Getty alleged that Stability AI infringed its intellectual property rights and copyrights, claiming that the defendants accessed and reproduced its copyrighted images without permission to develop the AI solution known as Stable Diffusion, an AI image generation tool that creates images based on text prompts.

Stability AI claimed that their tool functions as an AI model trained on publicly available data, deeming it “fair use” or “legally accessible” for use in training.

A copyright-protected work is intended to prevent unauthorised reproduction that is typically published or accessible online. The way AI tools work, a computer programme browses the internet in search of content, extracts samples from that content and then uses those reproductions, whether whole or substantial, to “create” new work.

Given this, is there scope to argue that this is copyright infringement, or can it be deemed as “fair use”?

The Getty case is part of an ongoing legal debate in the age of AI and the outcome of the case could have significant implications for how AI companies source their data and how copyright law should apply to AI-generated content to avoid the issue of copyright infringement.

Considering this quickly evolving phenomenon, it appears that the question of ownership of AI-generated work is not fully settled by the law.

Is it the AI tool developer, the individual user who input the query, or the AI tool itself?

Critics argue that the law needs to adapt to the realities of the future of AI and the risk of copyright infringement for using AI-generated content.

In the meantime, users should proceed with caution until copyright laws are updated to include AI-generated work.

As exciting as the future of AI will turn out to be, we cannot completely cut out the need for human intervention.

In the future of AI, humans will serve as the “redundancy plan” if AI fails or malfunctions. Further, without human intervention, there will be a more serious risk of copyright infringement.

AI systems are designed to simulate human intelligence and as such (for now) humans can combine their original content with new creative AI perspectives with less risk of committing copyright infringement.

However, ask yourself if you know how much of the documents, text or other content that you have had AI generate for you infringes anyone’s copyrights.

As AI continues to develop and play a significant role in the creation of content, the law surrounding copyright will be forced to evolve accordingly.

In the meantime, human intervention plays a crucial role in avoiding copyright infringement and serves as the balance between encouraging innovation while protecting originality.

Ultimately, taking steps to understand the legal parameters surrounding copyright will be essential for users of AI until the evolution of the law.

First Published in The Royal Gazette, Legally Speaking column, November 2024

Share
More publications
Economic Substance
27 Apr 2026

Economic substance regime now falls under Cita

Recent amendments to Bermuda’s economic substance regime have transferred regulatory responsibility from the Registrar of Companies to the Corporate Income Tax Agency.

Appleby-Website-Private-Client-and-Trusts-Practice
22 Apr 2026

Regulation, Regulation, Regulation

The article discusses updates to global trust guidance and regulation, as well as beneficial ownership and the regulatory burden on trustees that comes with increased transparency.

Appleby-Website-Private-Client-and-Trusts-Practice-1905px-x-1400px
15 Apr 2026

Purpose trusts: Bermuda’s answer to modern asset structuring

Purpose trusts represent a notable development in modern trust law, particularly within offshore financial jurisdictions such as Bermuda. Unlike traditional private trusts, which are established for the benefit of identifiable beneficiaries, purpose trusts are created to achieve specific objectives or purposes. Historically, common law jurisdictions were reluctant to recognise such arrangements due to the absence of beneficiaries capable of enforcing the trust. However, legislative reforms in Bermuda have significantly expanded the scope of trust law by expressly validating noncharitable purpose trusts. Through the enactment of the Trusts (Special Provisions) Act 1989 (‘the 1989 Act’), Bermuda introduced a statutory framework that allows trusts to exist for defined purposes, provided certain legal requirements are satisfied. This innovation has made Bermuda a leading jurisdiction for the establishment of purpose trusts, particularly in the fields of international finance, corporate structuring and private wealth management. This article examines the legal foundations of purpose trusts under Bermuda law, focusing on their historical development, statutory framework, requirements for validity, enforcement mechanisms and practical applications.

Website-Code-Bermuda-1
10 Apr 2026

Bermuda Regulatory Update – Economic Substance Amendment Act 2026

On 31 March 2026, the Economic Substance Amendment Act 2026 and the Economic Substance Amendment Regulations 2026 (together, the “2026 Amendments”) came into force, enacting changes to the Economic Substance Act 2018 (“ES Act”) and Economic Substance Regulations 2018.

ICLG Fintech 21 cover
10 Apr 2026

Digital asset developments and Bermuda’s regulatory readiness

While frightening to some, “finance bros” and “tech bros” are now wearing the same gilets as traditional finance products and structures are being infused with digital asset adaptation.

Appleby-Website-Insurance-and-Reinsurance
1 Apr 2026

Q1’26 Suggests Cat Bond Issuance Could Reach $20bn Again, Private ILS & Sidecar Surge to Continue

It’s been an exceptionally busy start to the year for the catastrophe bond sector, with Q1’26 officially becoming the second highest Q1 on record in terms of total catastrophe bond issuance, which indicates that 2026 could end up reaching the $20 billion+ milestone once again, Brad Adderley, Managing Partner at law firm Appleby has said.

Trust Disputes
27 Mar 2026

Privy Council decision in X Trusts – redefining the role of the protector

On 19 March 2026, the Judicial Committee of the Privy Council (JCPC) delivered its long-awaited judgment regarding the role of a fiduciary protector in the administration of a trust (A and 6 others (Appellants) v C and 13 others (Respondents) [2026] UKPC 11, on appeal from the Court of Appeal of Bermuda). The decision of the JCPC was unanimous, with the judgment being given by Lords Briggs and Richards.

Appleby-Website-Insurance-and-Reinsurance
26 Mar 2026

Latin American risks and the Bermuda market

Bermuda’s decades-long efforts to welcome Latin American risks to the island’s re/insurance market have borne fruit in the form of the many LatAm captive insurers that have become domiciled here.

Appleby-Website-Insurance-and-Reinsurance
24 Mar 2026

Navigating Bermuda’s New Recovery Planning Requirements: A Roadmap for Commercial Insurers

On 20 March 2026, the Bermuda Monetary Authority (BMA) issued an updated Guidance Note for Recovery Planning Requirements (Guidance Note). The Guidance Note assists Bermuda commercial insurers’ compliance with the obligations set out in the Insurance (Prudential Standards) (Recovery Plan) Rules 2024 (Rules), which became operative on 1 May 2025.