I like your argument, not because it is a good analogy for AI but because it is a good contrast. Copyright isn't a guarantee or magic force field blocking fair competition. It is a permeable buffer against lazy knockoffs and time-boxed so that buffer doesn't choke all future creativity.

People on this thread need to focus on what "derivative" and "fair use" mean and understand both are measured on a somewhat fuzzy spectrum, subject to interpretation.

In a perfectly fair world AIs/MLs could vacuum up all human knowledge, fair and square. (In an ideal world, they would do that adhering to polite opt-in/opt-out agreements with copyright holders. We can dream). Input isn't theft.

On output, two magic genies would stand at the gate, the Derivative Genie and Fair Use Genie and review anything spat out by the AI/ML. If it crossed agreed upon thresholds the Genies would bar the gates and issue a stern warning to prompt again (or maybe the AL/ML would auto-adjust the prompt and try again).

So, if your prompt asked for a 300-word poem about thrash metal mosh pit dancing and it spat out a poem where 85% of it match one of the handful of available mosh pit poems in its database, the Derivative Demon would block the output and raise an alarm.

On the other hand, if you asked for a line by line analysis of a famous mosh pit dancing poem (by name) or maybe asked for a satirical spoof of said poem, the Fair Use Demon would overrule the Derivative Demon and give the output a pass.

That's as fair as this could get, especially if you add one more thing: An Appeals Court (maybe corporate, maybe 3rd party, maybe state run) with a Settlement Pool. If a copyright holder could prove the Genies let pass something they shouldn't, the AL/ML would fix that. If real damage is done, the creator would get a settlement from the pool.

The point is that the Input Genie is out of the bottle. Creators just look foolish trying to squeeze it back in. Better, they should focus on making the output Genies and the Appeals process as effective and fair as possible for everyone.