Back-Up Copies Exception
There is an exception to software piracy, called the back-up copies exception. Under this exception, it is not a copyright violation to copy the software solely for the purpose of creating a back-up copy for an individual’s personal use.
Although many licenses directly provide for this, federal laws do as well.
Why Should an Individual Copyright Their Software?
Although the inventor of software has an automatic copyright upon saving that software on their data stick or computer, registering with the United States Patent and Trademark Office (USPTO) has many benefits.
For example, copyrighting and registering software with the USPTO provides an inventor with the exclusive right to:
- Make copies
- Prepare derivative works
- Distribute copies
- Display the software publicly
Registration with the USPTO is necessary in order to enforce many of the protections that are offered under copyright laws.
Copyright Infringement Fines
Copying software, also called software piracy or software infringement, is considered to be an act of copyright infringement. Software piracy penalties may include both civil and criminal penalties.
The penalties for copyright infringement may be considerably more serious than for other types of intellectual property claims. This is due to the fact that federal laws have made it a criminal offense to engage in the infringement of copyright materials.
These copyright infringement laws are also referred to as anti-piracy laws. They aim to protect electronic media, including:
- Songs
- Movies
- Computer files
Copyright infringement may result in criminal penalties including a short jail sentence, criminal fines, or both. These criminal fines may be hundreds or thousands of dollars.
In addition to state or federal criminal penalties, the owner of a copyright may also be able to file a civil lawsuit against the infringer. This may result in additional legal consequences for the perpetrator, for example, a damages award.
In order for a plaintiff to obtain damages in a civil lawsuit, they must be able to prove the value of the intellectual property rights that were infringed upon. Some of the more common legal penalties that are associated with copyright infringement include:
- Compensatory Damages: The infringing party will be required to pay the copyright holder the money that they gained from the use of the copyright.
- Statutory Damages: This includes damages that are established by statute, specifically Section 504 of the Copyright Act.
- Statutory damages give the owner of a copyright the right to recover a specified amount of damages, usually between $200.00 and $150,000.00 per work that is infringed.
- Statutory damages will be higher for a party that willfully violates a copyright, and lesser for a party that was not aware that they were violating a copyright.
- Injunction: An injunction is a court order that orders the party who is violating the copyright to stop engaging in their infringing acts.
- Orders of Seizure: If the infringing party possesses illegal copies of the copyrighted work, a court will typically order that the illegal property be seized.
- Criminal Penalties: If willful copyright infringement occurs, the infringer may also be held criminally liable. The perpetrator may face criminal penalties for each violation, including:
- Imprisonment for a period of up to 5 years
- Fines of up to $250,000.00
- Both
It is important to be aware that copyright infringement lawsuits may involve a combination of the above-listed damages in addition to attorney’s fees and court costs. Under the Digital Millennium Copyright Act (DMCA), an individual may also face criminal penalties if they attempt to circumvent a copyright control, for example, a digital rights management (DRM) technology or encryption.
Copyright controls may either keep an individual from accessing a work, called access controls, or they may limit what they can do once they access it, called copy controls. Circumventing access controls is banned.
Although there is not a ban on circumventing copy-control measures, it is illegal to receive the tools to do so and the perpetrator may be infringing. It is also common for access controls and copy controls to be merged.
What Is the Statute of Limitations on Software Piracy?
A copyright infringer may be sued civilly and, in certain cases, prosecuted criminally for the same act on infringement. There is a civil statute of limitations of three years to file a copyright infringement lawsuit.
However, the statute of limitations for a federal prosecutor to bring a criminal case against an infringer is five years. The copyright must have been registered in order to bring a felony copyright infringement action.
The prosecutor will be required to show that the perpetrator willfully infringed for a commercial advantage or for financial gain by reproducing or distributing one or more copies or phonorecords of one or more copyrighted works that have a total retail value of more than $1,000 during a 180-day period.
Or, the prosecutor can show that the perpetrator distributed a work that was being prepared for commercial distribution by making that work accessible to the public on a computer network, although the perpetrator was aware it was intended for commercial distribution.
What Is AI (Artificial Intelligence)?
Artificial intelligence, also often referred to as AI, is simulated human intelligence by a computer system. AI lets machines reason, learn, perceive, problem-solve, and understand language. It can also predict trends and optimize processes.
AI uses algorithms and data instead of explicit programming to make predictions and identify patterns and improve their performance over time. Some commonly known examples of AI are Siri, Alexa, and customer service chatbots, image identification and facial recognition, and personalized suggestions on services including Netflix and Amazon.
What Are Some Legal Issues Involving AI?
There are a wide variety of legal issues that can come up related to artificial intelligence, which can include, but are not limited to:
- Output Accuracy
- An AI system may produce information that is false or misleading, which can pose a legal risk when users rely on the output, especially if they are in a specialized field
- Intellectual Property Ownership and Copyright
- Whether or not content that is AI-generated can be copyrighted is currently under review
- Copyright Infringement
- Whether using copyrighted materials to train AI is copyright infringement is currently under review
- Liability
- Which party will be responsible for damages when AI systems malfunctions is not always clear
- Currently, courts are making determinations regarding whether AI platforms owe users a duty of care
- Courts are also currently determining whether AI platforms are responsible for outputs that are harmful
- Deepfakes and Privacy Issues
- AI can be used to produce deepfakes and nonconsensually made private or intimate content
- Data Privacy Breaches
- AI may use user-input data for training, which can violate privacy and confidentiality laws when sensitive information is input.
There have been a number of lawsuits filed against AI companies that involve issues including data scraping, copyright infringement, and child safety. Examples of the areas of law in which AI-related claims have been filed include:
- Issues related to image, video, and audio rights
- Copyrighted images bedding used in training
- Teen mental health issues related to AI bots harming minors by encouraging addiction, suicidal behaviors, or emotional dependency
- Antitrust and fraud claims based on unfair competition
All works are required to have human authorship in order to be copyrighted under the Copyright Act of 1976. In other words, when a work is created totally by AI, it cannot be copyrighted.
The District of Columbia Circuit of the United States Court of Appeals recently affirmed this requirement is 2025. A copyright creator must disclose if they used AI-generated content in their submission and, if that is not disclosed, the copyright registration may be cancelled.
AI technology as well as the law that governs it is evolving. As the years continue, there will likely be new and updated court rulings in future years that will shape how AI is used across industries.
Because the laws that apply to AI and how it is used will most likely continue to evolve as the technology advances into the future, it is very important to consult with a copyright attorney to determine the most current copyright requirements and laws. Both the laws that govern copyrights and those that govern AI may be updated or changed when presidential administrations change.
How Does AI Relate to Software Piracy Law?
AI and software piracy law intersect in what is currently a legal grey area of training AI models on copyrighted data, which creates a risk of the AI generating infringing outputs. Although training AI on a dataset will often be considered fair use, or transformative use, using pirated or scraped works to train an AI model can create liability risks.
Courts are currently making determinations regarding whether AI outputs infringe if they are substantially similar to training data. AI developers typically argue that AI training is transformative, or creates new knowledge, instead of being mere reproduction, which may be considered piracy.
When the AI model generates content or software code that matches closely with the copyrighted materials it was trained on, it may constitute copyright infringement. The United States Copyright Office is currently reviewing issues related to what is copyrightable when work is AI-assisted.
What if I Have a Dispute Involving AI Issues?
Whenever there is any type of dispute related to AI, an individual is advised to consult with an attorney. It can be very helpful to have legal assistance before a dispute even arises to determine the steps that can be taken to protect software materials, including registering for a copyright and finding out protections that are provided for software.
If there is a dispute about copyright protections for software, a lawyer can help determine the parties that may be held liable. Copyright lawyers can also help their clients determine the types of claims they may have, such as fraud, copyright infringement, or breach of contract.
How Can Current Legal Cases Impact the Use of AI and Copyrights?
Legal claims are currently being reviewed and decided and some cases have been resolved which impact AI use and how it may impact copyright protections.
Bartz v. Anthropic
The court in the Northern District of California, in 2025, held that training of generative large language model (LLM) that Anthropic used was exceedingly transformative and, therefore, qualified as fair use. Because Anthropic downloaded pirated works, however, it still had to pay damages.
This is an impactful case because other AI developers have also been accused of or have admitted to using the same data sets to train their AI systems, also opening them up to liability.
Kadrey v. Meta
In this case, the issue was Meta simultaneously uploaded copyrighted works while also using BioTorrent technology to download the works, referred to as seeding. A decision has not yet been reached in this case.
If the California court determines that Meta distributed large amounts of copyrighted works, it can face being ordered to pay substantial damages. This case is important as it may outline the steps copyright-holding plaintiffs can use in the future to win an AI infringement case.
Do I Need a Lawyer?
The laws that govern software copyrights are very complex and are always changing to keep up with technology. If you have been accused of violating an electronic copyright law, it is important to consult with a copyright lawyer as soon as possible.
Your attorney can advise you regarding your rights and any defenses that may be available in your case. Your lawyer will also represent you during any of your court appearances.
If you are considering copying or distributing a work and you are unsure of the ramifications, it is always best to seek legal advice before taking any actions to ensure that your conduct does not violate any laws.
Use LegalMatch’s free lawyer-client matching services to find a copyright lawyer near you who can assist with your software piracy law question or dispute. It will only take you a few minutes to complete the online submission, so you can get started today.
