I tend to agree with the judge’s assessment. He must make a decision based on existing law and the plaintiff’s claim/argument. You’re right existing law doesn’t cover this aspect of technology which is why there needs to be new laws enacted by Congress. And the courts are put in a no win situation here because we’ve failed to establish new rules and regulations for this new technology.
The plaintiff’s claim of derivative work doesn’t fit here because of what has already been long established what a derivative work looks like. AI generated images aren’t really derivative works.
I think rightfully, the court has told them to try again, which is ok.