I just got a Dall-E render with a very intact "gettyimages" watermark on it. I'm no legal expert on whether you have to own the license to something to use it as training input to your AI model, but surely you can't just... use stock photos without paying for the license? Maybe I'm just old fashioned.
Prompt: "king of belgium giving a speech to an audience, but the audience members are cucumbers"
All 4 results (all no good as far as the prompt is concerned): https://ibb.co/gz5RDkB
Fullsize of the one with the watermark https://ibb.co/DzGR063
In the United States, there are two bits of case law that are widely cited and relevant: In Kelly v. Arriba Soft Corp (9th), found that making thumbnails of images for use in a search engine was sufficiently "transformative" that it was ok. Another case, Perfect 10 (9th), found that thumbnails for image search and cached pages were also transformative.
OTOH, cases like Infinity Broad. Corp. v. Kirkwood found that that retransmission of radio broadcast over telephone lines is not transformative.
If I understand correctly, there are four parts to the US courts' test for transformativness within fair use (1) character of use (2) creative nature of the work (3) amount or substantiality of copying (4) market harm.
I'd think that training a neural network on artwork--including copyrighted stock photos--is almost certainly transformative. However, as you show, a neural network might be overtrained on a specific image and reproduce it too perfectly--that image probably wouldn't fall under fair use.
There are also questions of if they violated the CFAA or some agreement crawling the images (but Hiq v Linkedin makes it seem like it's very possible to do legally) and whether they reproduced Getty's logo in a way that violates trademarks (are they trying to use it in trade in a way there could be confusion though?)