Andersen et al v. Stability AI Ltd. et al

Filing 113

JOINT CASE MANAGEMENT STATEMENT filed by Sarah Andersen, Kelly McKernan, Karla Ortiz, Stability AI, Inc., DeviantArt, Inc., Stability AI Ltd., and Midjourney, Inc.. (Saveri, Joseph) (Filed on 10/3/2023) Modified on 10/4/2023 (bar, COURT STAFF).

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Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 1 of 19 1 2 3 4 5 6 7 8 9 10 11 Mark A. Lemley (State Bar No. 155830) LEX LUMINA PLLC 745 Fifth Avenue, Suite 500 New York, NY 10151 Telephone: (646) 898-2055 Facsimile: (646) 906-8657 Email: mlemley@lex-lumina.com Nicole M. Jantzi (pro hac vice) Paul M. Schoenhard (pro hac vice) FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP 801 17th Street NW Washington, DC 20006 Telephone: (202) 639-7254 Email: nicole.jantzi@friedfrank.com paul.schoenhard@friedfrank.com 12 Counsel for Defendants Stability AI, Inc. and Stability AI Ltd. 13 [Additional counsel on signature page] Joseph R. Saveri (State Bar No. 130064) Cadio Zirpoli (State Bar No. 179108) Christopher K.L. Young (State Bar No. 318371) Louis A. Kessler (State Bar No. 243703) Elissa A. Buchanan (State Bar No. 249996) Travis Manfredi (State Bar No. 281779) JOSEPH SAVERI LAW FIRM, LLP 601 California Street, Suite 1000 San Francisco, California 94108 Telephone: (415) 500-6800 Facsimile: (415) 395-9940 Email: jsaveri@saverilawfirm.com czirpoli@saverilawfirm.com cyoung@saverilawfirm.com lkessler@saverilawfirm.com eabuchanan@saverilawfirm.com manfredi@saverilawfirm.com Counsel for Individual and Representative Plaintiffs and the Proposed Class [Additional Counsel Listed on Signature Page] 14 15 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 16 17 18 19 20 21 22 23 24 25 26 27 SARAH ANDERSEN, an individual; KELLY MCKERNAN, an individual; KARLA ORTIZ, an individual, Individual and Representative Plaintiffs, v. STABILITY AI, LTD., a UK corporation; STABILITY AI, INC., a Delaware corporation; MIDJOURNEY, INC., a Delaware corporation; DEVIANTART, INC., a Delaware corporation, CASE NO. 3:23-cv-00201-WHO JOINT CASE MANAGEMENT STATEMENT Date: Time: Place: Before: October 10, 2023 2:00 p.m. Videoconference Hon. William H. Orrick Defendants. 28 JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 2 of 19 1 Pursuant to the Standing Order for All Judges of the Northern District of California, this 2 Court’s May 25, 2023 Case Management Conference Order, Federal Rule of Civil Procedure 16, 3 and Civil L.R. 16-9, and the Court’s August 8, 2023 Order (ECF No. 95), Plaintiffs and Stability 4 Defendants1 have met and conferred and hereby submit this Joint Case Management Statement in 5 advance of the Case Management Conference scheduled for October 10, 2023 at 2:00 p.m.2 6 I. JURISDICTION AND SERVICE 7 This Court has subject matter jurisdiction over this action under 28 U.S.C. § 1331 to the 8 extent it arises under the Copyright Act, the Digital Millennium Copyright Act (“DMCA”), the 9 Lanham Act, and the Declaratory Judgment Act. To the extent this action is maintained as a class 10 action and a class is ultimately certified, the Court may also have subject matter jurisdiction under 11 the Class Action Fairness Act, 28 U.S.C. § 1332(d). In view of the current uncertainty regarding 12 the plaintiff(s), claim(s) and defendant(s) in this action, Stability Defendants reserve any challenge 13 they may have to this Court’s subject matter jurisdiction over this action. 14 All Defendants have been served and filed motions in response to the Complaint without 15 contesting this Court’s personal jurisdiction. Plaintiffs contend that Defendant Midjourney is 16 headquartered in California and that all Defendants conduct substantial business in California. 17 Thus, it is Plaintiffs’ position that this Court has personal jurisdiction over Defendants. Stability 18 Defendants reserve any challenge they may have to this Court’s personal jurisdiction over them as 19 to any claim asserted in any amended complaint. 20 21 1 22 As used herein, “Stability Defendants” or “Stability” refers to Stability AI Ltd. and Stability AI, Inc.; “Stability AI” refers to Stability AI Ltd. 23 2 24 25 26 27 28 Defendants DeviantArt, Inc. (“DeviantArt”) and Midjourney, Inc. (“Midjourney”) participated in the parties’ Federal Rule of Civil Procedure 26(f) conference prior to the Court’s order suspending their Rule 26 obligations (ECF No. 95). Given that order, that these defendants’ discovery obligations are presently stayed (see id.), and the legal deficiencies inherent to the claims asserted against Midjourney and DeviantArt (see ECF Nos. 49, 50, 52–54; July 19, 2023 Hr’g Tr. at 4:10– 6:6), they have not substantively participated in the preparation of this Joint Case Management Statement. DeviantArt and Midjourney reserve all rights to object and respond to any statements or representations made by Plaintiffs and/or Stability Defendants herein during the forthcoming October 10, 2023 Case Management Conference, or otherwise. - 1- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 3 of 19 1 II. FACTS 2 A. 3 Plaintiffs filed this lawsuit on January 13, 2023. ECF No. 1. The primary basis of the 4 lawsuit is Defendants’ unauthorized use of Plaintiffs’ intellectual property, specifically their visual 5 works and their names. On July 19, 2023, this Court held a hearing on Defendants’ responsive 6 motions and took them under submission. See ECF Nos. 49–54, 58–60.3 Pursuant to its tentative 7 ruling at the hearing, the Court ordered Plaintiffs and Stability to comply with their obligations 8 under Rule 26. ECF No. 95. On August 8, 2023, all parties attended a Rule 26(f) Conference, and 9 Plaintiffs filed a report on that conference on August 22, 2023. ECF No. 10. 10 Plaintiffs’ Statement of Facts Defendants develop and/or offer generative artificial-intelligence based image generation 11 products (“AI Image Products”). AI Image Products are trained on images paired with descriptive 12 text. Training images are typically gathered through web scraping, i.e., copying from websites 13 using software to automate the process. Defendants’ AI Image Products rely on billions of training 14 images, almost all of which are copied without the owners’ consent or knowledge, and without 15 providing the owner or creator credit or compensation. 16 In August 2022, Stability began offering Stable Diffusion, a generative AI model that 17 produces images based on training images, under an open-source license. Stability sells 18 DreamStudio, a product that allows customers to utilize Stable Diffusion without an expensive 19 computing platform or serious technical knowledge. Stability illegally copied and/or acquired 20 unauthorized copies of over five billion images from the Internet. Stability did not attempt to 21 acquire licenses for any of the training images used. Through training, Stable Diffusion embeds 22 and stores compressed copies of the training images and relies on those compressed copies to 23 generate its output. Midjourney trained its AI Image Product on the same training data as Stability. 24 DeviantArt offers a product similar to DreamStudio called DreamUp, which, like DreamStudio, 25 gives customers the ability to interface with and utilize Stable Diffusion. DeviantArt also hosts 26 27 3 28 Further details regarding Defendants’ motions and the hearing are set forth below in section IV. - 2- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 4 of 19 1 millions of images that were copied without authorization to become part of Stable Diffusion’s 2 training data. 3 All output from an AI Image Product is necessarily derived from and depends on the 4 breadth and quality of the images used for training. This means that, unlike a human artist, an AI 5 Image Product can only copy latent images tagged with terms associated with the text prompt, and 6 an AI Image Product can never exceed the limitations of its training images. Indeed, Stability’s 7 CEO, Emad Mostaque, admitted Stable Diffusion “compress[e]d the knowledge of over 100 8 terabytes of images.” Mostaque has publicly acknowledged the importance of using licensed 9 images for training AI Image Products. He has promised future versions of Stable Diffusion will 10 be based on “fully licensed” training images. But Stability has yet to take any steps to obtain or 11 negotiate licenses for Stable Diffusion. 12 Plaintiffs’ injuries were the direct and foreseeable result of Defendants’ conduct. In 13 addition to injunctive relief, Plaintiffs are entitled to compensatory damages, statutory damages, 14 and punitive damages based on Defendants’ oppression, malice, or fraud. 15 B. 16 Stability AI Ltd. (“Stability AI”)4 is at the forefront of the burgeoning generative artificial 17 intelligence (“AI”) industry, rapidly expanding the boundaries of human creativity and capability 18 while maintaining a commitment to make its technology available to all. 19 Stability Defendants’ Statement of Facts Stable Diffusion is an open-source generative AI text-to-image model that has rapidly 20 become a base model for developers and artists around the world. Generative AI models are 21 “generative” because they can generate complex new content by analyzing vast datasets to 22 understand the relationships between words, concepts, and visual or textual features. This is 23 similar to a student visiting a library to learn the relationships between intellectual concepts, or 24 visiting an art gallery to learn how to match colors or best depict perspective. Users can then input 25 26 27 28 4 Stability AI, Inc. is a non-operating holding company. Accordingly, Stability AI, Inc. has not performed and is not responsible for the performance of any of the acts alleged in the Complaint (ECF No. 1). - 3- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 5 of 19 1 prompts of their choosing to generative AI models such as Stable Diffusion to create entirely 2 novel images. The learning process for generative AI models is known as training. Stability AI 3 has been involved in various aspects of the development, training and/or release of certain 4 versions of Stable Diffusion. 5 6 7 Dream Studio is a platform that was developed by Stability AI to provide users with access to the capabilities of Stable Diffusion. Various versions of Stable Diffusion have been trained by exposure to randomly-selected 8 portions of billions of images that were publicly available on the Internet. Contrary to the 9 pleadings in the Complaint, however, training Stable Diffusion bears no resemblance to creating 10 compressed copies or memorizing images for later distribution. Instead, at a high level, the 11 training for Stable Diffusion involves a component that understands text and a component that 12 generates images. The component that understands text is a special language AI model that takes 13 input text and outputs a list of numbers that represents associations between the text in a 14 mathematical format. That mathematical information is then presented to the component that 15 generates images, and the image generator undergoes a multi-stage process to interpret the 16 mathematical information to a final image. That process involves smaller AI models that are 17 trained so that the distribution of individual elements within images—how pixels are arranged 18 such that the “sky” in images is typically blue and located above the “ground”, “people” have two 19 eyes, and “cats” typically have pointy ears—are learned by the model. With that training, the 20 image generator is able to start with a random, extremely noisy image and gradually modify the 21 noisy image into an entirely new, clear image based on a user’s text prompts. The final result is an 22 AI model that is composed of hundreds of millions or billions of model “weights” or 23 “parameters”—pure numbers that represent in a mathematical format the concepts that are 24 contained in the AI mode—as well as model code, which is the software that can operate the 25 model weights. Neither the model weights nor the model code contains copies (or any other 26 record) of particular images on which the model was trained, beyond the mathematical 27 relationships between concepts that the model learned through the training process and that are 28 - 4- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 6 of 19 1 embodied in the model weights. 2 The purpose of all this training is not to enable users of Stable Diffusion to reproduce 3 copies of training images. Rather, Stable Diffusion is intended to expand humans’ capacity for 4 creativity. Crucially, Plaintiffs themselves have acknowledged that “none of the Stable Diffusion 5 output images provided in response to a particular Text Prompt is likely to be a close match for 6 any specific image in the training data.” (ECF No. 1 ¶ 93.) 7 It is well established, however, that infringement is possible only where a defendant’s 8 work is “substantially similar” to a plaintiff’s work—a possibility that Plaintiffs have expressly 9 conceded is not “likely” here. Nor can Plaintiffs point to anything in the code or weights of the 10 Stable Diffusion model (which are freely available open-source and online), that is substantially 11 similar to their own works. Absent such substantial similarity in either Stable Diffusion itself or 12 the images that Stable Diffusion creates, Plaintiffs’ copyright claim is fundamentally the same as 13 alleging that an art student who views hundreds of paintings before creating a new, entirely novel 14 work has somehow violated the law. In short, Stability Defendants deny any liability for direct or 15 indirect copyright infringement, or any other unlawful conduct of any kind. 16 III. LEGAL ISSUES 17 A. 18 Plaintiffs anticipate the following legal issues will be argued in this case based on their 19 20 present allegations:  21 22 Whether Defendants violated the copyrights of Plaintiffs and the Class when they downloaded and stored copies of their works.  23 24 Plaintiffs’ Position Whether Defendants violated the copyrights of Plaintiffs and the Class when they used copies of their works to train AI Image Products.  Whether Defendants vicariously violated the copyrights of Plaintiffs and the Class 25 when third parties used Defendants’ products to create Fakes, as defined in the 26 Complaint (ECF No. 1). 27 28 - 5- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 7 of 19  1 Whether Defendants violated the DMCA by removing copyright management 2 information (“CMI”) from the Plaintiffs’ and the Class’s works and/or causing their 3 respective AI Image Products to omit CMI from their output images.  4 Whether Defendants violated Plaintiffs’ and the Class’s rights of publicity when they 5 designed and marketed their AI Image Products to respond to prompts requesting 6 output images using the names of specific individuals, namely Plaintiffs and the Class.  7 8 Whether Defendants’ AI Image Products are being used by Defendants to engage in Unfair Competition under the Lanham Act and/or California law. 9  Whether the class should be certified under Federal Rule of Civil Procedure 10  Whether this Court should enjoin Defendants from engaging in the unlawful conduct 11 . alleged herein. And what the scope of that injunction would be.  12 Whether any affirmative defense excuses Defendants’ conduct, including but not 13 limited to whether some or all of Defendants’ conduct is allowed under the fair use 14 doctrine. 15 B. 16 The Stability Defendants provide the following list of principal legal issues in dispute, noting 17 that the parties do not agree regarding the importance or relevance of each issue, and that the list is 18 therefore preliminary and subject to revision, particularly in light of Stability Defendants’ pending 19 Motions (see infra Section IV): 20 Stability Defendants’ Position 1. Whether Stability Defendants directly infringed registered copyrights owned by Plaintiff Sarah Andersen pursuant to 17 U.S.C. § 501;5 21 22 23 24 25 26 27 5 Stability Defendants understand that the Court has expressed its inclination to grant Stability Defendants’ Motion to Dismiss as to all claims except Plaintiff Andersen’s claim of direct copyright infringement as it relates to the training of Stable Diffusion. Accordingly, at this time, Stability Defendants do not anticipate that the following legal issues will be in dispute: 1. Whether Stability Defendants directly infringed registered copyrights owned by unnamed class members pursuant to 17 U.S.C. § 501; 28 - 6- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 8 of 19 1 2. Whether Plaintiffs’ allegations are sufficient to state a claim against Stability Defendants 2 under Fed. R. Civ. P. 12(b)(6); 3 3. Whether Stability Defendants’ alleged conduct caused any injury to Plaintiffs; 4 4. Whether the Plaintiffs can meet the requirements of Fed. R. Civ. P. 23 for certification of 5 one or more putative classes; and 6 5. Whether Plaintiffs are entitled to the equitable and monetary relief they seek. 7 The parties reserve the right to raise additional issues that become relevant as a result of any 8 new claims, defenses, or counterclaims. 9 IV. 10 MOTIONS On April 18, 2023, Stability Defendants filed a motion to dismiss pursuant to Fed. R. Civ. 11 P. 12(b)(6) (ECF No. 58), Midjourney filed a motion to dismiss and/or strike pursuant to Fed. R. 12 Civ. P. 12(b)(6) and 12(f) (ECF No. 52), DeviantArt filed a motion to dismiss pursuant to Fed. R. 13 Civ. P. 12(b)(6) (ECF No. 49), and DeviantArt also filed a motion to strike pursuant to Cal. Code 14 Civ. Proc. § 425.16 (ECF No. 50) (the “Motions”). The Motions were fully briefed on July 3, 15 2023, and the Court heard argument on the Motions on July 19, 2023, during which the Court 16 stated that it was “inclined to dismiss almost everything [in the Complaint] with leave to amend.” 17 ECF No. 92 at 1 (citing ECF No. 92-1 at 4:10–6:6). As noted above, the Court indicated it was 18 inclined to sustain “Andersen’s direct infringement claim against Stability [Defendants] for 19 copying images.” Id. at 5:9–10. The Motions are currently pending before the Court. 20 21 22 2. Whether Stability Defendants indirectly infringed registered copyrights owned by Plaintiffs pursuant to 17 U.S.C. § 501; 23 3. Whether Stability Defendants removed or altered Copyright Management Information from Plaintiffs’ copyrighted works in violation of the DMCA; 24 25 26 27 28 4. Whether Stability Defendants violated Plaintiffs’ statutory right of publicity pursuant to Cal. Civ. Code § 3344; 5. Whether Stability Defendants violated Plaintiffs’ common law right of publicity; 6. Whether Stability Defendants engaged in unlawful business practices in violation of 15 U.S.C. § 1125, Cal. Bus. & Prof. Code §§ 17200 et seq., or the common law; and 7. Whether Plaintiffs are entitled to declaratory relief. - 7- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 9 of 19 1 On August 3, 2023, in light of the Court’s statements during the July 19, 2023 hearing, 2 Defendants filed an Administrative Motion to Continue Case Management Conference and Stay 3 Discovery Pending Resolution of Dispositive Motions. ECF No. 92. On August 8, 2023, the Court 4 granted Defendants’ motion in part, continuing the initial case management conference to 5 September 19, 2023, ordering that this Joint Case Management Statement be filed by September 6 12, 2023, and continuing Rule 26 deadlines as to Defendants Midjourney and DeviantArt. ECF 7 No. 95. On September 13, 2023, this Court continued the case management conference set for 8 September 19, 2023. ECF No. 111. This Joint Case Management Statement supersedes the earlier 9 Joint Case Management Statement filed on September 12, 2023 (ECF No. 110), before the 10 continuance. 11 Stability Defendants anticipate filing additional motions, including pursuant to Rule 12, if 12 appropriate, after a ruling on the pending motions and the filing of an amended complaint, if any. 13 Plaintiffs anticipate filing a motion for class certification under Rule 23. The parties anticipate 14 filing motions for summary judgment or adjudication under Rule 56. 15 Plaintiffs anticipate law and motion practice with respect to discovery issues that cannot be 16 resolved by consent. 17 V. AMENDMENT OF PLEADINGS 18 Plaintiffs anticipate this Court’s order on the pending motions will set forth a deadline for 19 Plaintiffs to file an amended complaint should the order allow for one. Plaintiffs intend to file an 20 amended complaint if given the opportunity and will abide by any requirements set forth in the 21 Court’s order. 22 Stability Defendants propose that the amendment of pleadings be governed by the Federal 23 Rules of Civil Procedure. 24 VI. 25 EVIDENCE PRESERVATION The parties certify that they have reviewed the Court’s Guidelines Relating to the 26 Discovery of Electronically Stored Information, are aware of their obligations, and have taken 27 appropriate steps to preserve potentially relevant evidence. The parties confirm they have met and 28 - 8- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 10 of 19 1 conferred concerning such obligations. 2 Plaintiffs are not aware of any potentially relevant evidence that has been destroyed or that 3 is not reasonably accessible. At the Rule 26 conference and subsequently, Plaintiffs asked 4 Defendants to confirm whether any material subject to discovery has been destroyed or is not 5 reasonably accessible. See Northern District ESI Discovery Guidelines § 2.01 (Preservation) ¶ (e) 6 (“The parties should discuss what ESI from sources that are not reasonably accessible will be 7 preserved, but not searched, reviewed, or produced.”), § 2.02 (Rule 26(f) Meet and Confer), ¶ A. 8 (parties should discuss “[t]he sources, scope and type of ESI that has been and will be preserved.”) 9 & ¶ B (parties should discuss “Any difficulties related to preservation.”). Stability Defendants 10 stated they are not aware of any relevant Stability Defendants’ information that has been destroyed 11 since the filing of the complaint in this case, but cannot represent that potentially relevant 12 information was not destroyed in the ordinary course of business prior to that time. Stability 13 Defendants further advised Plaintiffs that Stability AI maintains massive volumes of data in the 14 ordinary course of its business, that some data may not be readily identified or accessed, and that 15 cost and technological limitations may interfere with long-term preservation efforts. Plaintiffs 16 suggested that the parties table further discussion regarding sources, scope or type of ESI retention 17 and/or production until a later date and have not yet raised the topic again since that time. 18 Midjourney and DeviantArt did not identify any material that has been destroyed or is not 19 reasonably accessible. Plaintiffs are seeking clarity as to these issues and may seek relief from the 20 Court. 21 VII. DISCLOSURES 22 Plaintiffs served their Rule 26(a) Initial Disclosures on August 22, 2023. Stability 23 Defendants served their Rule 26(a) Initial Disclosures on September 12, 2023. Midjourney’s and 24 DeviantArt’s obligations under Rule 26 are currently continued, as discussed above. 25 VIII. DISCOVERY 26 The parties have not yet served discovery requests. 27 28 - 9- JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 11 of 19 1 A. 2 Plaintiffs intend to share drafts of the following proposed stipulated agreements likely Plaintiffs’ Position 3 necessary for discovery to commence, particularly documentary discovery.: (1) a stipulated 4 protective order for material that must be kept confidential, (2) an ESI protocol, and (3) an expert 5 discovery agreement. 6 Plaintiffs anticipate the discovery process will require considerable time by all participants 7 and active case management. To ensure this case proceeds at a reasonable pace and because 8 Plaintiffs will likely have a sustained claim against Stability on a core issue, Plaintiffs believe 9 beginning the discovery process with Stability now would be most efficient. Stable Diffusion and 10 its training material are at the core of Plaintiffs’ claims against all Defendants. It would not be 11 wasteful for Plaintiffs to request relevant information and begin negotiations with Stability as to 12 the details of their search and production. 13 B. 14 In light of the Motions pending before the Court, Stability Defendants believe that it is Stability Defendants’ Position 15 premature at this time to consider either the scope of anticipated discovery or any potential 16 limitations or modifications of the discovery rules. The Motions concern each of Plaintiffs’ claims 17 and thus have the potential to significantly impact the scope of this action, including the number of 18 Plaintiffs, the Defendants, and the number of claims that remain in the case. Moreover, as set forth 19 above (see supra Section IV), during the July 19, 2023 hearing on the Motions, the Court 20 expressed substantial doubt about Plaintiffs’ core theories of liability and indicated that it was 21 inclined to permit only currently alleged claim (direct copyright infringement based on training) 22 presented by only one named Plaintiff (Andersen). Defendants similarly believe consideration of 23 a stipulated e-discovery order, a proposed discovery plan pursuant to Fed. R. Civ. P. 26(f) and any 24 potential discovery disputes would be premature at this time. 25 IX. 26 27 CLASS ACTION All attorneys of record have reviewed the Court’s Procedural Guidance for Class Action Settlements. 28 - 10 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 12 of 19 1 Plaintiffs assert claims for damages and injunctive relief on behalf of themselves and all 2 others similarly situated as a class action pursuant to Rules 23(a), 23(b)(2), and 23(b)(3) of the 3 Federal Rules of Civil Procedure, on behalf of the following classes: 4 “Injunctive Relief Class” under Rule 23(b)(2): All persons or entities nationalized and/or 5 domiciled in the United States that own a copyright interest in any work that was used to train any 6 version of an AI Image Product that was offered directly and/or incorporated into another product 7 by one or more Defendants during the Class Period. 8 “Damages Class” under Rule 23(b)(3): All persons or entities nationalized and/or 9 domiciled in the United States that own a copyright interest in any work that was used to train any 10 version of an AI Image Product that was offered directly and/or incorporated into another product 11 by one or more Defendants during the Class Period. 12 “DeviantArt Damages Subclass” under Rule 23(b)(3): All members of the Damages 13 Class who (1) maintained an account on DeviantArt; (2) posted copyrighted work on DeviantArt; 14 and (3) had that work used to train any version of an AI Image Product. 15 A. 16 Plaintiffs propose class certification be briefed and decided at the close of fact and expert Plaintiffs’ Position 17 discovery and before motions for summary judgment. Plaintiffs are prepared to provide a schedule 18 setting forth proposed dates but will await the Court’s guidance considering the pending motions 19 and likely a further round of dispositive motions responsive to an amended complaint filed by 20 Plaintiffs. 21 B. 22 Stability Defendants contend that this action should not be certified as a class action and is 23 not aware of facts showing that Plaintiffs (much less Plaintiff Andersen, individually) are entitled 24 to maintain the action under Fed. R. Civ. P. 23(a) and (b). Stability Defendants further believe 25 that in light of the pending Motions it is premature to consider the appropriate timing of how and 26 when class certification will proceed (if at all). Stability Defendants intend to oppose any motion 27 for class certification at the appropriate time and further intend to request that the issue of class Stability Defendants’ Position 28 - 11 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 13 of 19 1 certification be bifurcated and that all remaining issues be stayed pending resolution of Plaintiffs’ 2 anticipated motion for class certification. 3 X. 4 RELATED CASES Stability Defendants identify Getty Images (US), Inc. v. Stability AI, Ltd. and Stability AI, 5 Inc., No. 23-cv-00135, filed on February 3, 2023, and currently pending in the United States 6 District Court for the District of Delaware. Stability Defendants moved to dismiss Getty Images 7 (US), Inc.’s Amended Complaint for lack of personal jurisdiction, inability to join a necessary and 8 indispensable party, and failure to state a claim upon which relief can be granted, and, in the 9 alternative, requested that the action be transferred to the Northern District of California pursuant 10 to 28 U.S.C. § 1631 or § 1404(a). Stability Defendants’ motion is pending before the court. 11 Stability Defendants further identify Getty Images (US) Inc et al. v. Stability AI Ltd, Claim 12 No. IL-2023-000007, which is currently pending in the High Court of Justice, Business and 13 Property Courts of England and Wales. 14 Plaintiffs are unaware of any other cases involving Defendants’ AI Image Products other 15 than those set forth above. Plaintiffs reserve opining on whether either of the two Getty cases are 16 related to this case until these issues are before this Court, if ever. 17 XI. RELIEF 18 A. 19 As set forth in the Complaint, Plaintiffs seek statutory, compensatory, and punitive Plaintiffs’ Position 20 damages on behalf of themselves and a putative class for Defendants’ unauthorized use of their 21 copyrighted material, DMCA violations, right of publicity violations, and various other wrongful 22 acts by Defendants. Plaintiffs also seek injunctive relief to prevent Defendants from continuing to 23 ignore their rights in offering their AI Image Products and to stop further use of Plaintiffs’ 24 property to create new AI Image Products. 25 B. 26 Stability Defendants deny that Plaintiffs are entitled to any relief, and contend that the case 27 should be dismissed. Stability Defendants deny liability and that the Plaintiffs are entitled to any of Stability Defendants’ Position 28 - 12 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 14 of 19 1 the relief sought. Stability Defendants do not seek relief or damages from any party at this time. 2 XII. 3 SETTLEMENT AND ADR No settlements have been reached by the parties. Plaintiffs are willing to participate in a 4 settlement conference with a magistrate judge currently assigned to the Northern District of 5 California. Plaintiffs are open to other forms of non-binding ADR, such as mediation, and will be 6 prepared to discuss ADR options at the upcoming conference. The parties will be prepared to 7 discuss ADR options and seek the Court’s guidance at the October 10, 2023 conference. 8 9 10 Plaintiffs, Stability Defendants and DeviantArt have filed declarations in compliance with ADR L.R. 3-5(b). XIII. CONSENT TO MAGISTRATE JUDGE FOR ALL PURPOSES 11 Stability Defendants did not consent to proceed before a magistrate judge for all purposes. 12 ECF No. 14. Accordingly, the case was re-assigned to the Honorable Judge William H. Orrick, 13 currently presiding over this case. ECF No. 18. 14 XIV. OTHER REFERENCES 15 16 17 This case is not suitable for reference to other courts or administrative bodies. XV. NARROWING OF ISSUES The parties have not identified any issues that can be narrowed at this juncture but will 18 meet and confer on any such issues as they arise. 19 XVI. EXPEDITED TRIAL PROCEDURE 20 21 22 The parties do not consent to the Expedited Trial Procedure of General Order No. 64. XVII. SCHEDULING In light of the Motions pending before the Court, Stability Defendants believe that it is 23 premature at this time to consider the schedule on which this action should proceed, if any. The 24 Motions concern each of Plaintiffs’ claims and thus have the potential to significantly impact the 25 scope of this action, including the number and identit(y/ies) of plaintiff(s) and defendant(s) that 26 remain in the case. Moreover, as set forth above (see supra Section IV), Defendants believe the 27 Court expressed substantial doubt about Plaintiffs’ core theories of liability during the July 19, 28 - 13 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 15 of 19 1 2023 hearing on the Motions. 2 Plaintiffs believe this complex class action will benefit from active case management, 3 including setting a schedule for some or all pretrial deadlines. 4 XVIII. TRIAL 5 6 Plaintiffs have demanded a jury trial. Plaintiffs expect a trial will take three to four weeks as the case presently stands. 7 8 Stability Defendants believe it is premature to estimate the length of trial at this time. XIX. DISCLOSURE OF NON-PARTY INTERESTED ENTITIES OR PERSONS 9 10 All parties have filed any Certifications of Interested Entities or Persons required by Civil L.R. 3-15. 11 Stability Defendants: Pursuant to Fed. R. Civ. P. 7.1, Stability AI Ltd. certifies that it is a 12 wholly-owned subsidiary of Stability AI, Inc. Stability AI, Inc. certifies that it has no parent 13 corporation and that no publicly held corporation owns 10% or more of its stock. Pursuant to Civil 14 L.R. 3-15, Stability Defendants certify that other than the named parties, no entity has a pecuniary 15 interest in the outcome of this case. 16 XX. 17 18 PROFESSIONAL CONDUCT The parties attest that all attorneys of record for the parties have reviewed the Guidelines for Professional Conduct for the Northern District of California. 19 20 21 22 23 24 25 26 27 28 - 14 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 16 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Dated: October 3, 2023 Respectfully submitted, By: /s/ Joseph R. Saveri Joseph R. Saveri Joseph R. Saveri (State Bar No. 130064) Cadio Zirpoli (State Bar No. 179108) Christopher K.L. Young (State Bar No. 318371) Louis A. Kessler (State Bar No. 243703) Elissa A. Buchanan (State Bar No. 249996) Travis Manfredi (State Bar No. 281779) JOSEPH SAVERI LAW FIRM, LLP 601 California Street, Suite 1000 San Francisco, California 94108 Telephone: (415) 500-6800 Facsimile: (415) 395-9940 Email: jsaveri@saverilawfirm.com czirpoli@saverilawfirm.com cyoung@saverilawfirm.com lkessler@saverilawfirm.com eabuchanan@saverilawfirm.com tmanfredi@saverilawfirm.com Matthew Butterick (State Bar No. 250953) 1920 Hillhurst Avenue, #406 Los Angeles, CA 90027 Telephone: (323) 968-2632 Facsimile: (415) 395-9940 Email: mb@buttericklaw.com Brian D. Clark (pro hac vice) Laura M. Matson (pro hac vice) Eura Chang (pro hac vice) LOCKRIDGE GRINDAL NAUEN P.L.L.P. 100 Washington Avenue South, Suite 2200 Minneapolis, MN 55401 Telephone: (612)339-6900 Facsimile: (612)339-0981 Email: bdclark@locklaw.com lmmatson@locklaw.com echang@locklaw.com Counsel for Individual and Representative Plaintiffs and the Proposed Class 25 26 27 28 - 15 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 17 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 By: /s/ Paul Schoenhard Paul M. Schoenhard Mark A. Lemley (State Bar No. 155830) LEX LUMINA PLLC 745 Fifth Avenue, Suite 500 New York, NY 10151 Telephone: (646) 898-2055 Facsimile: (646) 906-8657 Email: mlemley@lex-lumina.com Nicole M. Jantzi (pro hac vice) Paul M. Schoenhard (pro hac vice) FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP 801 17th Street NW Washington, DC 20006 Telephone: (202) 639-7254 Email: nicole.jantzi@friedfrank.com paul.schoenhard@friedfrank.com Michael C. Keats (pro hac vice) Amir R. Ghavi (pro hac vice) FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP One New York Plaza New York, NY 10004 Telephone: (212) 859-8000 Email: michael.keats@friedfrank.com amir.ghavi@friedfrank.com Counsel for Defendants Stability AI, Inc. and Stability AI Ltd. 20 21 22 23 24 25 26 27 28 - 16 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 18 of 19 1 By: 2 Andrew M. Gass (SBN 259694) Michael H. Rubin (SBN 214636) Brittany N. Lovejoy (SBN 286813) LATHAM & WATKINS LLP 505 Montgomery Street, Suite 2000 San Francisco, California 94111-6538 Telephone: (415) 391-0600 Email: andrew.gass@lw.com michael.rubin@lw.com brittany.lovejoy@lw.com 3 4 5 6 7 8 Counsel for Defendant DeviantArt, Inc. 9 10 11 12 13 14 15 16 17 18 /s/ Brittany N. Lovejoy Brittany N. Lovejoy By: /s/ Angela L. Dunning Angela L. Dunning Angela L. Dunning (SBN 212047) Kayla Blaker (pro hac vice) J. Asheton Lemay (pro hac vice) COOLEY LLP 3175 Hanover Street Palo Alto, California 94304-1130 Telephone: (650) 843-5000 Facsimile: (650) 849-7400 Email: adunning@cooley.com kblaker@cooley.com alemay@cooley.com 22 Judd D. Lauter (SBN 290945) COOLEY LLP 3 Embarcadero Center, 20th Floor San Francisco, California 94111 Telephone: (415) 693-2000 Facsimile: (415) 693-2222 Email: jlauter@cooley.com 23 Counsel for Defendant Midjourney, Inc. 19 20 21 24 25 26 27 28 - 17 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO Case 3:23-cv-00201-WHO Document 113 Filed 10/03/23 Page 19 of 19 FILER’S ATTESTATION 1 2 3 4 Pursuant to Civil Local Rule 5-1(h)(3), I attest under penalty of perjury that concurrence in the filing of the foregoing document has been obtained from all other signatories to this document. Dated: October 3, 2023 By: /s/ Joseph R. Saveri Joseph R. Saveri 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 18 - JOINT CASE MANAGEMENT STATEMENT CASE NO. 3:23-CV-00201-WHO

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