Thaler V Household Finance Corp

Thaler v. Household Finance Corp., decided by the U.S. Court of Appeals for the Seventh Circuit in 2023, revolves around the application of the Lanham Act to artwork created using artificial intelligence (AI). The central question was whether an AI system, specifically one called “Creativity Machine,” could be considered an “author” under copyright law and thus bring a claim for infringement under the Lanham Act.

Stephen Thaler, the owner of the Creativity Machine, sought to assert rights over artwork it generated, naming the AI as the author. Household Finance Corp. (HFC) allegedly used this artwork, or something substantially similar, in its advertising without permission. Thaler’s lawsuit claimed HFC infringed upon the AI’s purported copyright and violated the Lanham Act by falsely designating the origin of the artwork.

The Seventh Circuit affirmed the district court’s dismissal of the case. The court’s reasoning hinged on the fundamental requirement under U.S. copyright law that authorship requires human agency. Previous rulings, including the Copyright Office’s stance, have consistently held that copyright protection extends only to works created by human beings. AI, as a non-human entity, cannot be an “author” in the legal sense. Therefore, Creativity Machine could not possess copyright in the generated artwork.

The Lanham Act claim, based on false designation of origin, similarly failed. Since the AI could not be an author and therefore hold a copyright, the argument that HFC falsely designated the origin of the artwork by not attributing it to Creativity Machine was untenable. The court determined that the Lanham Act claim was intrinsically linked to the failed copyright claim. If no copyright exists, there can be no actionable misrepresentation of origin based on failing to credit the AI.

The court acknowledged the evolving nature of AI technology and the potential future implications for copyright law. However, it emphasized that any expansion of copyright protection to AI-generated works would require legislative action by Congress. The court’s role is to interpret existing law, not to create new rights based on anticipated technological developments.

Thaler v. Household Finance Corp. is significant because it reinforces the established principle that human authorship is a prerequisite for copyright protection under U.S. law. It also highlights the challenges of applying existing legal frameworks to novel technologies like AI. The decision leaves open the possibility for future legislative changes that might address the copyrightability of AI-generated works but clearly states that, under current law, AI cannot be considered an author.