83 demand, such use is particularly problematic from a copyright standpoint. This position is consistent with the U.S. court’s reasoning in Westlaw v. ROSS, which emphasized the commercial harm caused when generative AI tools replicate the function or value of protected content. Five Key Takeaways from the Report 1. AI Training Is Not Inherently Transformative The Report emphasizes that the use of copyrighted works for training AI models is not automatically considered transformative. Each case must be evaluated on its specific facts and context. 2. Commercial Use Raises Significant Concerns Training conducted with commercial intent—particularly when the resulting outputs closely resemble the original works—is unlikely to qualify as fair use under existing legal standards. 3. Market Harm Is a Central Consideration Uses that diminish or substitute the market for the original work weigh heavily against a finding of fair use. The potential for economic harm to rights holders is a key factor in the analysis. 4. Unauthorized Use of Protected Works Is Not Neutral The Report rejects the view that large-scale scraping of copyrighted content for AI training is legally neutral, cautioning that such practices may give rise to copyright infringement. 5. Call for Legislative and Judicial Clarification Recognizing the complexity and evolving nature of the issue, the Copyright Office urges both legislators and courts to provide clearer guidance on the lawful boundaries of using copyrighted content in AI training, rather than allowing regulatory uncertainty to persist. Conclusion The contrasting approaches taken by the Israeli Ministry of Justice and the U.S. Copyright Office reflect a broader global tension between fostering innovation and protecting intellectual property rights in the age of AI. While Israel’s position leans toward enabling ML development under existing legal frameworks, the U.S. stance emphasizes caution, particularly in commercial contexts where market harm is likely. As AI systems become increasingly integral to economic and cultural life, striking a clear, balanced, and internationally coherent legal framework will be essential. Legal certainty in this domain is not only vital for protecting rights holders but also for ensuring that AI innovation continues to thrive in a responsible and equitable manner.
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