Introduction

The Intellectual Property (IP) Law incorporates patents, copyrights, and trademarks which deal with the unprecedented problems, which are the ever-increasing rhythm of digital, artificial intelligence, and algorithmic innovation. The existing intellectual property frameworks were, moreover, framed upon the pillars of tangible creation and distinguishable human creation/authorship, premises that are increasingly challenged by technologies operating beyond traditional physical boundaries and individual creative inputs. This problem is perhaps most sharply realised in the copyright terms, where the publishing and creative sectors are directly confronting the developers of generative AI. This work will critically analyse the three most consequential and interrelated areas currently transforming global IP jurisprudence: the tricky legal system surrounding the utilisation of copyrighted data for Generative Artificial Intelligence (AI) training, as demonstrated by high-profile cases such as The New York Times (NYT) vs OpenAI. The critical extension of IP Protection into the new commercial environments of the metaverse and digital databases, as well as the high-stakes, complex valuation methodologies applied to Standard-Essential Patents (SEPs). This essay argues that there is an urgent need to either legislatively harmonise or judicially reconsider the implications of decisive global litigations to ensure the continued applicability and efficiency of the intellectual property paradigm in the rapidly evolving digital economy of the twenty-first century.

Generative AI and Copyright: The Fair Use or Infringement Dichotomy.

The next immediate and major legal threat to the creation right, which is the exclusive right granted to copyright holders, is the challenge to the traditional legal division between copying to consume and copying to perform a single computational analysis, created by the introduction of sophisticated generative systems of artificial intelligence.

The development of new world AI is fundamentally predicated on the operation of automatic data scraping of billions of publicly accessible creations, often including vast troves of copyrighted data, such as texts, images, and articles. This technical process automatically copies and temporarily stores the entire creative work, enabling the models to define statistical correlations and patterns, which are subsequently encoded into the model’s weights or parameters. According to the copyright owners, this massive copying, which occurs to serve a certain commercial interest, is a clear-cut violation of the fundamental rights of creation and distribution to which copyright owners are endowed. In comparison, AI researchers argue that this type of replication is merely an essential mediating step in a non-expressive, analytical environment and thus should be considered a very transformative use. The reflection of this argument is on pick when The New York Times (NYT) filed its landmark case against OpenAI and Microsoft in late 2023; in this case, the allegation is not only about the massive copyright infringement but also demanded the extraordinary remedy of requiring the defendants to demolish the models and training sets that incorporated Times content. The decommissioning AI models call initiative asserts that the publishing industry's attitude is that infringement does not exist in terms of outputs, but is essentially rooted in the structural framework of the AI product.

[Image Sources: Shutterstock]

In the United States of America, the resolution of the above conflict is currently centred on the judicial concern over the four factors of Fair use, with particular significance on the transformative nature of the highlighted use and the resulting market harm. In the defense, a comparison is made between artificial intelligence training and human learning to support the argument that the model retrieves non-expressive information to generate a functional tool. However, the plaintiffs pay significant attention to the possibility of commercial substitution due to the model's outputs and claim that this destroys the existing business model of licensed content. A direct attack on the market harm claim is the lawsuit filed by The New York Times, which claims that the ability of AI to recreate or provide an accurate summary of paywalled content renders paid subscriptions unnecessary. This ability, according to the plaintiffs, results in a manifest financial loss to the journalistic venture, as it erodes subscription earnings and disrupts the traditional revenue system.

From an academic perspective, the lawsuit highlights a major paradox in the historical legal trend of the media industry. Legal analysts note that the current stance of The New York Times represents a significant departure from its litigation position in the past. In the Tasini case, the publisher employed a defensive strategy, which compelled the courts to recognise the right of publishers to archive articles digitally without necessarily acquiring individual licenses from contributing freelancers. Recent claims of aggressive copyright enforcement against artificial intelligence are, in turn, seen as discriminatory, commercially motivated protection, which is enforced when the defendant is an emerging technological threat to the income of the publisher, and not the consistent ideological devotion to the very notion of romantic authorship with which the organisation now identify itself. Furthermore, the transnational scope of AI exacerbates the jurisdictional paradox in infringement analysis adjudication. The challenges that Getty Images has faced in international adjudicatory contexts demonstrate that even when a cloud training procedure is implemented, determining the geographic locus is a daunting legal challenge when considered in light of the current statutes governing territorial intellectual property.

From the Indian jurisprudence perspective, the Copyright Act, 1957, presents a more restrictive legal structure. primarily due to its narrow fair dealing provisions and more emphasis on human contribution. According to the Supreme Court of India in the seminal case of Eastern Book Company v. D.B. Modak (2008) 1 SCC 1, it establishes the principle that copyright protection requires a modicum of creativity and the application of human skill, judgment, and capital. This high human standard, in itself, makes the implementation of Section 2(d)(vi) more complicated, as it refers to the person who causes the work to be created in the case of computer-generated works. Recent domestic litigation, exemplified by the case of Asian News International (ANI) v. OpenAI. The case of OpenAI in the Delhi High Court will be crucial in establishing the minimum standard of human intervention required to justify the works created with the aid of advanced generative models under the current statutory regime, particularly given the limited statutory exceptions in India.

Intellectual Property in the Metaverse and Digital Assets

The fast-growing digital-asset economy, represented by non-fungible tokens (NFTs) and the trading of assets in virtual worlds, has created a need to apply the current intellectual-property rights to fully intangible assets, questioning long-standing ideas of physical control and ownership. The spread of unlicensed virtual copies of their products in the Metaverse, where such copies are created and traded, poses a significant risk to globalised enterprises, leading to brand erosion and an increased likelihood of consumer misperception due to the proliferation of unauthorised virtual copies of their merchandise in the Metaverse. Due to this, the owners of intellectual property have been motivated to take the initiative of registering their trademarks as soon as possible in newly introduced, specialised groups that include downloadable digital services and content aimed at virtual commerce. The United States landmark case, Hermès v. The case of MetaBirkins has established a legal precedent: the adjudication held that the illegal commercial use of a famous trademark relating to digital products is subservient to traditional trademark law, and in particular the doctrine of likelihood of confusion, which ascertained the right of the proprietor to control the usage of their brand in the online space.

The intersection of generative artificial intelligence and virtual commerce, along with the recent SEP valuation crisis, has conclusively revealed the functional constraints of existing intellectual property laws. The legal system will be relied upon to overcome its traditional physical and human-based foundations, providing the digital economy with its long-term stability. Such a shift either would necessitate the enactment of certain legislative tools e.g. well-defined text-and-data-mining exemptions and clear and deliberate statutory language on AI-assisted authorship or such careful and agile future revision of the principles as observed in earlier rulings in trademark and personality rights. The intellectual property framework can only be effective with a wholesome change to keep fulfilling its dual purpose of sufficiently stimulating innovation and maintaining fairness in the digitalized market at a high speed.

Author :- Anubhav Pandey, in case of any query, contact us at Global Patent Filing or write back us via email at support@globalpatentfiling.com.

References

1. ANI Media (P) Ltd. v. OpenAI Inc https://www.nls.ac.in/wp-content/uploads/2024/11/ANI_vs_OPEN_AI.pdf (accessed 11th November 2025)

2. Eastern Book Company v. D.B. Modak 2008 1 SCC 1

3. Getty Images v. Stability AI https://www.judiciary.uk/wp-content/uploads/2025/01/Getty-Images-and-others-v-Stability-AI-14.01.25.pdf (accessed 11th November 2025)

4. Hermes Int'l v. Rothschild, No. 22-CV-384-JSR, 2023 WL 1458126 (S.D.N.Y. Feb. 2, 2023)

5. The New York Times Co. v. OpenAI, Inc.

6. The New York Times v. Tasini https://www.law.cornell.edu/supct/pdf/00-201P.ZO (accessed 11th November 2025)

7. The Copyright Act, 1957

8. The Patents Act, 1970

9. The Verge. "The New York Times sues OpenAI and Microsoft for copyright infringement over AI training." Published December 27, 2023. https://www.theverge.com/2023/12/27/24016212/new-york-times-openai-microsoft-lawsuit-copyright-infringement (accessed 11th November 2025)

10. Harvard Law Review. "NYT v. OpenAI: The Times’s About-Face." Published April 2024. Available at: https://harvardlawreview.org/blog/2024/04/nyt-v-openai-the-timess-about-face/ (accessed 11th November 2025)