A British artificial intelligence company took millions of photos from Getty Images without permission in an act of “brazen infringement”, a landmark copyright trial has heard.

Getty, an image library, is suing Stability AI in a case that could set the future direction of the law and influence government policy, experts said. Stability is accused of taking 12 million images and videos from Getty’s website without permission or payment to create its Stable Diffusion software, which enables users to produce images from text commands.

The case is the first significant copyright lawsuit in Britain against the AI industry, which needs huge amounts of data such as images to train and create software. About 40 cases have started in the US, where most of the major AI companies are based.

• High five: British technology companies set the pace in AILindsay Lane KC, for Getty, told the High Court that the case was “about the straightforward enforcement of intellectual property rights”. Lane told the court that Stability “did not care” if it used works that were copyrighted, had watermarks or if they “were not suitable for work or pornographic’, adding: “This trial is the day of reckoning for that approach.”Getty claims that Stable Diffusion was also trained on child sex abuse imagery. Stability acknowledged that its dataset contained “adult, violent and sexual content”. It accuses Stability of infringement in both taking the images and then reproducing them with its AI software. “To add insult to injury, Stable Diffusion regularly generates AI images emblazoned with Getty Images’ own trade marks,” Getty said.Using Stable Diffusion, AI pictures were produced of Jürgen Klopp, the former Liverpool manager, and the late musician Kurt Cobain which Getty said infringed the copyright of the photographers it represents. Getty also alleges database rights infringement, trademark infringement and passing off.• How British tech star Stability AI imploded with debt and lawsuitsThe trial comes against the backdrop of a battle between the creative industries and Labour over the future of copyright law. Ministers want to make it easier for AI companies to take copyrighted works in order to spur investment in the UK. The £126 billion creative industries say this would legalise theft of their works.A parliamentary battle between the House of Lords and Commons on the issue looks set to continue this week. Liberal Democrat peers have vowed to reintroduce an amendment to the Data (Use and Access) Bill that seeks to protect the creative industry. Lord Clement-Jones, the Lib Dems’ technology spokesman, said that unless ministers changed their proposed amendment, “the mood of the House is such that I think many peers will be minded to defy the government for a sixth time”.He added: “The government should not be surprised if they find themselves facing another defeat on Wednesday. Ministers must table meaningful amendments, taking powers to introduce transparency requirements.”Hugo Cuddigan KC, for Stability, said the case concerned “an issue of real societal significance”, adding that Getty appeared “to see generative AI as an existential threat”. He said some of Getty’s claims represented “an overt threat to Stability’s whole business and the wider generative AI industry”, adding: “By pursuing them, Getty seek to establish that such generative AI image models should not be available to UK users. We consider Getty’s output claims to be susceptible to dismissal on a host of independent bases.”• Nick Clegg: Artists’ demands over copyright are unworkableLane said Getty “recognises that the AI industry overall may be a force for good” but that did not justify AI companies “riding roughshod over intellectual property rights”. She said: “It is important to say that this is not a battle between creatives and tech, where a win for Getty Images means the end of AI. Getty Images’ position is that the two industries can exist in synergistic harmony.”A key issue in the case will be where the alleged infringement took place, as Stability argues the training was not done in the UK.Andres Guadamuz, reader in intellectual property law at the University of Sussex, said: “The result could have policy implications either way. If no infringement is found, copyright owners will cry foul and ask for stronger protection. If infringement is found, the tech industry will cry foul and ask for stronger exceptions. The ruling could fall at exactly the right time to push the government to act one way or the other.”Peter Nunn, an intellectual property lawyer specialising in AI at Mishcon de Reya, said Getty was facing “considerable obstacles” as “it seems that the use of those works in the training process took place outside the UK”. If Getty won, Nunn said, it “would be likely to accelerate a change in copyright law to ensure that the UK does not become an AI backwater, where AI companies are afraid to either develop their models or make them available”.The case is set to last until June 30 and a ruling is expected later this year.