Adobe indemnity clause designed to ease enterprise fears about AI-generated art

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When it comes to artworks created by generative AI, enterprise users have specific legal concerns around permissions – and Adobe has recognized those worries. That’s why the company has written an indemnity clause that states that Adobe will pay any copyright claims related to works generated in Adobe Firefly, the company’s generative AI art creation tool.

In a statement about the clause, the company specifically refers to these enterprise customers:

With Firefly, Adobe will also be offering enterprise customers an IP indemnity, which means that Adobe would protect customers from third party IP claims about Firefly-generated outputs.

That means the company is prepared to pay out any claims should a customer lose a lawsuit over the use of Firefly-generated content.

The company knows that enterprise customers are worried about creating artwork in this way. Speaking at the Upfront Summit earlier this year, prior to the release of Firefly, Adobe chief strategy officer Scott Belsky said that Adobe talked to companies about this and the enterprise position was crystal clear:

“A lot of our very big enterprise customers are very concerned about using generative AI without understanding how it was trained. They don’t see it as viable for commercial use in a similar way to using a stock image and making sure that if you’re going to use it in a campaign you better have the rights for it — and model releases and everything else. There’s that level of scrutiny and concern around the viability for commercial use,” he said.

Belsky says even though the court has yet to rule on the copyright issues related to content created with generative AI, Adobe feels comfortable taking this stance because it has trained Firefly on Adobe Stock images, which it has broad permission to use, along with openly licensed content and public domain content where the copyright has expired. Unlike OpenAI and some other companies, it’s not training on the open internet, only content it is legally able to use.

“We had to be safe regardless [of how the courts might rule]. And that was a really helpful direction. And so, what we did is we decided to train when we launched this first generative AI family of models, everything was trained on either Adobe Stock or open datasets that are not in violation of any sort of copyright,” he said.

That approach greatly reduces Adobe’s risk associated with offering the indemnity clause, says Adobe general counsel Dana Rao. The enterprise customer knows Adobe trained the model on a limited set of content that they had permission to use, and if for some reason they still get sued, Adobe has them covered.

“If you do get sued on a Firefly-generated output, then we’re going to step in as part of our enterprise contractual agreement, and indemnify you and what are we going to indemnify? We’re going to indemnify the output of Firefly…if that’s somebody else’s work, and it looks like their work and it would be a copyright infringement because it was [someone’s] work, we will indemnify you because…we know where we got our work from. And so we feel good that we’re going to be able to win that case,” Rao told TechCrunch.

Ray Wang founder and principal analyst at Constellation Research says the approach is smart for both Adobe and the creators who contribute to Adobe Stock. “It’s actually a brilliant move. Here’s why: It applies only to Adobe Stock and Adobe owns all the creative arrangements in Adobe Stock,” he said. “What’s more, they enable creators to make money from their works on the Adobe Stock derivatives created in Firefly.”

The company does place limits on how far it will take the indemnification, saying it only covers the specific Firefly-generated output and not anything else you might add to the output that could possibly infringe on a copyright, like say adding a likeness of Spiderman to the artwork, Rao says.

He sees the approach more like an insurance policy than a legal gimmick, designed to reassure skittish customers that it’s safe to use this technology for commercial purposes. “The law is not settled, and I can’t tell you which way the copyright cases are going to go, but I can guarantee you having been born in the United States of America that there are going to be a lot of lawsuits, so that insurance is pretty attractive [to our enterprise customers], and not really a gimmick.”

He says the enterprise users also recognize the likelihood of legal tests of the use of art generated with technology like Firefly, and it gives them some peace of mind. Adobe, knowing the content that the model was trained on, can feel similarly at ease, even if the law isn’t settled, and even if they might have to make some payments over time regardless of their position.

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