That’s going to be hard to argue. Where are the copies?
“Having copied the five billion images—without the consent of the original artists—Stable Diffusion relies on a mathematical process called diffusion to store compressed copies of these training images, which in turn are recombined to derive other images. It is, in short, a 21st-century collage tool.“
“Diffusion is a way for an AI program to figure out how to reconstruct a copy of the training data through denoising. Because this is so, in copyright terms it’s no different from an MP3 or JPEG—a way of storing a compressed copy of certain digital data.”
The examples of training diffusion (eg, reconstructing a picture out of noise) will be core to their argument in court. Certainly during training the goal is to reconstruct original images out of noise. But, do they exist in SD as copies? Idk
In fairness, Diffusion is arguably a very complex entropy coding similar to Arithmetic/Huffman coding.
Given that copyright is protectable even on compressed/encrypted files, it seems fair that the “container of compressed bytes” (in this case the Diffusion model) does “contain” the original images no differently than a compressed folder of images contains the original images.
A lawyer/researcher would likely win this case if they re-create 90%ish of a single input image from the diffusion model with text input.
Stable Diffusion is not made to decompress the original and actually has no direct mechanism for decompressing any originals. The originals are not present. The only thing present is an embedding of key components of the original in a multi-dimensional latent space that also includes text.
This doesn't mean that the outputs of Stable Diffusion cannot be in violation of a copyright, it just means that the operator is going to have to direct the model towards a part of that text/image latent space that violates copyright in some manner... and that the operator of the model, when given an output that is in violation of copyright, is liable for publishing the image. Remember, it is not a violation of copyright to photocopy an image in your house... it's a violation when you publish that image!
All of my other points remain unchanged by this pedantry.
While I doubt that specific case has been tested in court, arguably you could. If you created glitch art (https://en.wikipedia.org/wiki/Glitch_art) via compression artifacts, and your work was sufficiently distinct from the original work, I think you would have a reasonable case for transformative use (https://en.wikipedia.org/wiki/Transformative_use).