Unnatural Selection? A Darwinian Reading of the Economic Consequences of Generative AI on the Art Market

Generative AI challenges legal institution at a systemic level. Examples abound in intellectual property law. AI generates both artwork and invention likely to be respectively copyrightable or patentable if made by human. In lieu of discussing whether artificially-generated artworks or invention should be copyrighted or patented, questions that have received a large attention in academic scholarship, this paper proposes to analyse the economic implications of generative AI. Although the valuation of the outputs of generative AI is still mostly unknown, preliminary studies show that, all other things being equal, humans’ works are evaluated at a significant higher value than machine-enabled outputs. Yet, to be properly value, human-made and machine-enabled products must be distinguishable. They are not. This indistinguishability creates an asymmetry in information that in turn leads to a lemons problem, defined as a market erosion of good-quality products. Against that background, this paper proposes a solution in light of EU rules of origin and the so-called substantial transformation test. This solution can then be used in copyright law to identify where the human author has been able to make free and creative choices required to satisfy the criterion of originality.