[harshreality]

This is more of a problem for images, where similar output to inputs is likely, than for LLMs, where no matter what you prompt it with I doubt you can get it to regurgitate any significant parts of Harry Potter well enough to be a classical copyright violation of any of the novels. Maybe you could generate a copyright violation of character traits.

The output space of images (MB for larger images) tends to be larger than books (a few hundred KB of text for a long novel), but the perceptual output space of books is much larger.

Any determination that licensing is required for AI generation, or use of AI-generated works, is unacceptable until Congress or courts put some reasonable objective tests in place to determine what is and isn't a copyright violation for various types of works of various lengths. Not the ambiguous 4-factor test that is basically whatever the judge feels like. It will be a complete mess otherwise. They can't just define a new AI policy for copyright with a few types of works in mind; it has to work for all works.

You could look at this mathematically from a complexity perspective and try to define a similarity function that's true when a second work is close enough to a first work to be a derived work (assuming the first one had been seen by the creator of the second). Unfortunately that won't work because nobody can define such a function to everyone's satisfaction, and the courts wouldn't accept any informal suggestion of a definition when it didn't come from Congress. Specifically, you'd get into trouble with consistency in the function determining derived works depending on length of the work: short works, like a haiku, are much more sensitive to copyright violation in some ways... a mere 17 syllables is a complete reproduction and therefore a copyright violation, yet a single word isn't; for a novel, reproducing 1/17 of the content is almost certainly a copyright violation, but reproducing 17 syllables probably isn't.

Different stakeholders and creative re-mixers would want different things from the function. It's untenable.