Getty Images suffered a major setback in its landmark legal battle against AI company Stability AI over its image-generating technology, losing the case at London’s High Court on Tuesday.

The United States based firm, known for its editorial content and stock images and videos, had claimed that Stability AI used its images to train the Stable Diffusion system, which creates images from text prompts.

Getty had initially sued Stability AI for copyright infringement, claiming that Stable Diffusion was trained on its images and that the AI-generated images replicated its copyrighted content.

However, Getty dropped that part of the case mid-trial, citing insufficient evidence about where Stable Diffusion had been trained.

Intellectual property lawyers noted that this could limit the broader impact of Tuesday’s ruling on AI copyright law.

Getty’s remaining claims, trademark infringement and secondary copyright infringement, arguing that Stability AI had imported an AI model into the UK that violated its copyright, were still under consideration ahead of the court’s decision.

In her written judgment, Judge Joanna Smith said Getty had partially succeeded on trademark infringement concerning Getty watermarks reproduced by Stable Diffusion users, but she described her findings as “historic and extremely limited in scope.”

Smith dismissed Getty’s secondary copyright infringement claim.

In a statement, Getty Images said the ruling “confirms that Stable Diffusion’s use of Getty Images’ trademarks in AI-generated outputs infringed those trademarks.”

The company added that the decision “establishes a powerful precedent that intangible items, such as AI models, can be subject to copyright infringement claims just like tangible works,” noting it plans to rely on this precedent in its ongoing lawsuit against Stability AI in the U.S.