The following is part of our annual publication Selected Issues for Boards of Directors in 2026. Explore all topics or download the PDF.

Overview of AI Copyright Litigation

In 2026, we can expect important developments in the legal landscape of generative AI and copyright. Dozens of copyright infringement lawsuits targeting the training and development of AI models—capable of generating text, images, video, music and more—are advancing toward dispositive rulings. The central issue remains whether training AI models using unlicensed copyrighted works is infringing or instead constitutes fair use under Section 107 of the U.S. Copyright Act. Courts consider four factors in determining whether a particular use is fair: (1) the purpose and character of the use, (2) the nature of the copyrighted work, (3) the amount and substantiality of the portion used and (4) the effect of the use upon the potential market for or value of the copyrighted work. The thrust of this inquiry is whether the use is transformative—serving a different purpose or function from the original work—or merely usurps the market for the original by reproducing its protected expression. As courts establish legal frameworks for AI training and protection of AI-generated outputs, companies and boards should closely monitor developments to fully understand the risks and opportunities of AI implementation.

The following is part of our annual publication Selected Issues for Boards of Directors in 2026. Explore all topics or download the PDF.

AI adoption is now mainstream: 88% of businesses use AI in at least one function, with global spending expected to exceed $1.5 trillion in 2025 and approach $2 trillion in 2026. As organizations race to scale AI, many have relied upon traditional vendor risk management policies to vet third-party AI vendors and tools; however, implementation of third-party AI tools presents distinctive risks that require tailored due diligence, auditing, contracting and governance. Because businesses are accountable for outputs generated by third-party AI tools and for vendors’ processing of prompts and other business data, boards and management should ensure legal, IT and procurement teams apply a principled, risk-based approach to vendor management that addresses AI‑specific considerations.