Terms of service might matter more for terminating that user account. Whole ordeal is just plain copyright violation. The author had no licence to that internal code, and whitewashing it with LLM will achieve nothing. That case is much clearer than that recent GPL->BSD attempt story.
If LLM-generated code isn't considered a derivative work of the original, then whether the author was licensed to use the code doesn't matter. But I'm sure the courts will rule in favor of your view regardless. Laundering GPL is in corps' interest and laundering their code is not.
I'm not sure why people are clinging to some fuzzy and stretched out notion of copyright and the GPL in a particular. LLM's do NOT just copy code, with the right prompting, they generate entirely new code which can produce the same results as already existing code - GPLed or not.
If copyright is extended to cover such cases we'll have to become all lawyers and do nothing but sue each other because the fuzziness of it will make it impossible to reject any case, no matter how frivolous or irrelevant.
I think it comes down to the company's appetite for legal action, doesn't it? This case is imo pretty clear but the vibe has quite the smell of Oracle v Google to me.
But, yeah. More than likely this case is a simple account termination and some kind of "you can't call your clone 'openviktor'" letter.
According to US courts, the output can't be copyrighted at all. It's automatically in public domain after the "whitewash", regardless of original copyright.
https://www.morganlewis.com/pubs/2026/03/us-supreme-court-de...
Thats not at all what this ruling said. What the courts found was that an AI cannot hold copyright as the author. That copyright requires a human creative element. Not that anything that was generated by an LLM can't be subject to copyright.
As an example, a photo taken from a digital camera can be subject to copyright because of the creative element involved in composing and taking the photo. Likewise, source code generated by an LLM under the guidance of a human author is likely to be subject to the human authors copyright.
> That copyright requires a human creative element.
Sure, but the aim of that creative element would also be a consideration I'd think (and lawyers will argue). If someone sets up a camera on a 360° rotating arm and leaves it to take pictures at random intervals, it's unlikely to be considered "creative" from a copyright perspective.
Same for source code generated by an LLM, with the primary guidance of the human author being to "create a copy of this existing thing that I got", vs "create a thing that solves this problem in a way that I came up with". The former is recreating something that already exists, using detailed knowledge of that thing to shape the output. The latter is creating something that may or may not exist, using desire/need and imagination to shape the output. And I can't see reason for the former to be copyrightable.
But also, in either case, an ultimate objective was achieved: liberating the thing from its "owners" and initial copyright.
Isn't this exactly what LLMs themselves do? They ingest other people's data and reproduce a slightly modified version of it. That allows AI companies to claim the work is transformative and thus fair use.