Mengchun’s Comments
In the first Chinese case involving copyright infringement conducted through a generative AI platform, the Hangzhou Internet Court held that the AI platform provider could be held liable for assisting infringement. The court emphasized that the platform’s fault should be assessed by considering factors including the nature of the service, the popularity of the work, the obviousness of the infringement, the risk of dissemination, the platform’s profit model, and the measures taken by the platform.
The present case further clarifies the boundaries of that approach from the opposite perspective.
The Shanghai Intellectual Property Court held that a generative AI platform should not be considered to have breached its duty of care where the platform mainly provides technical services with substantial non-infringing uses, the relevant work is not widely recognized by the public, the alleged infringement is not readily identifiable, and the platform has established reporting, review and removal mechanisms and taken timely measures after receiving notice.
Together, these two cases represent important early judicial examples illustrating how Chinese courts are approaching copyright liability of generative AI platforms. These decisions indicate that platform liability is not determined solely by whether users commit infringement through AI services. Instead, Chinese courts are gradually developing a fact-specific fault-based framework centered on two considerations: foreseeability and avoidability.
I. Key Issue
The key issue was how to determine whether a generative AI service provider breached its duty of care and should bear joint liability for a user’s copyright infringement.
A related issue was whether the user’s use of copyrighted works to train LoRA models and generate AI images constituted infringement of the reproduction right.
II. Court’s Interpretation
1. Duty of care should be assessed based on foreseeability and avoidability
The Shanghai Intellectual Property Court held that generative AI platforms providing services such as model training, model publication and AI image generation are online service providers.
Whether such a provider breaches its duty of care should be determined by assessing its foreseeability and avoidability.
If a provider should have foreseen the infringement but failed to do so, or could have prevented or reduced the harm but failed to take reasonable measures, it may be considered to have breached its duty of care and may bear corresponding liability.
The court further explained that the following factors should be considered:
(1) Nature and method of the service
Where a generative AI platform mainly provides technical services with substantial non-infringing uses, the provider may not have the ability to foresee or prevent individual users’ infringement.
In such circumstances, the mere fact that a user utilizes the platform’s services to commit infringement does not automatically establish that the platform has fault.
(2) Nature and obviousness of the infringement
If the relevant work has not reached a level of public recognition, an AI service provider cannot be expected to identify potential infringement merely based on the name of a model or general visual style.
Although a work may be protected by copyright due to its originality, copyright protection does not prevent others from creating works with similar themes or artistic styles.
(3) Probability of infringement and the platform’s ability and cost of taking measures
Where a platform informs users through user agreements, membership agreements and creator rules that copyrighted materials may not be used without authorization, provides reporting functions, conducts review before publication, and takes measures such as deletion, blocking or disabling links after receiving infringement notices, these factors may support a finding that the platform has fulfilled its reasonable duty of care.
2. Model training does not automatically constitute infringement of the reproduction right
The court also clarified the application of the reproduction right in the context of AI-generated content.
The court held that reproduction is essentially a right of “re-presentation,” meaning that infringement requires the protected expression of a work to be reproduced or presented again. The use of prior works for AI model training does not automatically constitute reproduction.
Only when the model subsequently generates content that reproduces the protected expression of the prior work may a copyright-relevant reproduction act be completed.
The court explained that if the model only retains low-rank statistical compression rather than encoded information of the original image, such parameters cannot reconstruct the original image but may only guide the generation of new images with similar styles.
Therefore, AI model training does not necessarily infringe the reproduction right. The determination should depend on whether the generated content reproduces the original work’s original expression.
The court further noted that where an AI-generated output reproduces the protected expression of a work and constitutes infringement, the allocation of liability among different participants may require further analysis depending on their respective roles. However, in this case, the same individual conducted both the model training and the generation of the accused outputs, so the court did not need to address more complex scenarios involving different actors.
III. Case Background
Companies A and B owned the copyright in the visual design of the Medusa character from the Chinese animated series Battle Through the Heavens.
Company C operated an AI image generation platform that provided users with AI image generation services based on a large language model and various LoRA models.
Li extracted images of the Medusa character from the animated series and created a dataset. He then used Company C’s platform to train two Medusa LoRA models and publicly released them.
Other users could use the models to generate images identical or substantially similar to the Medusa character design.
Companies A and B alleged that Li infringed their reproduction right, adaptation right and right of communication through information networks. They also alleged that Company C failed to fulfill its platform duty of care, constituted assistance to infringement, and engaged in unfair competition.
The first-instance court held that Li infringed the reproduction right and ordered him to cease infringement and pay RMB 50,000 in economic loss and reasonable enforcement expenses. The court rejected the remaining claims against Company C.
Companies A and B and Li appealed.
IV. Court’s Holding
The Shanghai Intellectual Property Court affirmed the first-instance judgment.
1. Li’s infringement
The court held that Li’s conduct infringed the reproduction right.
The infringement was not based merely on the fact that Li used copyrighted images as training materials. Rather, Li extracted the Medusa images, trained LoRA models, generated AI images reproducing the protected character’s expression, and made the models available to other users.
The court also found infringement of the right of communication through information networks.
The court rejected the adaptation-right claim because the required creative transformation was not established.
The unfair competition claim was also rejected because Companies A and B failed to prove that “Medusa” had become an influential product name identifying a particular commercial source.
2. Company C’s platform liability
The court held that Company C did not breach its duty of care and therefore was not jointly liable.
The court rejected the approach that a platform should be considered at fault merely because its services were used by a user to commit copyright infringement.
First, Company C mainly provided technical services, including connecting users with base models, training LoRA models, publishing models and sharing generated images. These services had substantial non-infringing uses.
Second, the alleged infringement was not sufficiently obvious.
Although “Medusa” is a well-known mythological figure, the specific Medusa character design in Battle Through the Heavens was mainly recognized among fans of the animation and had not reached a level of general public recognition. The platform could not be expected to identify infringement merely from the model name or visual style.
The court further noted that although the Medusa character design was protected as an artistic work, such protection did not prevent others from creating works with similar themes or styles. Determining substantial similarity required a more detailed comparison of the protected expression.
Third, Company C had adopted preventive and remedial measures.
The platform prohibited unauthorized use of copyrighted content through user agreements, membership agreements and creator rules, provided reporting functions, reviewed LoRA models before publication, and took deletion, blocking and disabling-link measures after receiving notice.
Before litigation, Companies A and B had not provided Company C with a specific infringement notice. After receiving the litigation materials, Company C obtained knowledge of the alleged infringement. Before the first hearing, searches for “Medusa” on the platform no longer returned the relevant models or images.
Based on these circumstances, the court held that Company C had fulfilled its reasonable duty of care.
V. Judgment
On April 29, 2026, the Shanghai Intellectual Property Court dismissed the appeals and affirmed the first-instance judgment.
The court held that Li’s training, publication and use of the Medusa LoRA models infringed the reproduction right, while Company C, as an AI service provider, had fulfilled its reasonable duty of care and did not constitute assistance to infringement.
The judgment further clarifies that copyright liability of generative AI platforms should not be determined solely by the existence of user infringement. Instead, courts should consider whether the platform could reasonably foresee and prevent the infringement based on the nature of its services, the characteristics of the alleged infringement, and the measures available to the platform.
