1. Kadrey et al. v. Meta

Background: Author Richard Kadrey, comedian Silverman, and others sued Mark Zuckerberg’s Meta on July 7, 2023 in the U.S. District Court (Northern District of California) for mass infringement - i.e., unlicensed “training” of their generative AI model on millions of copyrighted works, including their own. Meta’s defense is “fair use.” The judge assigned is Judge Vince Chhabria.

At first, in November 2023, the Court dismissed the bulk of plaintiffs’ claims against Meta. But the Court gave plaintiffs a chance to amend their complaint to add a more direct link to actual harm (and they filed their amended complaint in December 2023).

Current Status: Meta answers the amended complaint and admits to torrenting millions of copyrighted works. This week, Meta filed a third Amended answer in response to plaintiffs’ Third Amended Complaint from January 13th which added a copyright infringement claim based on Meta’s distribution during the process of torrenting plaintiffs’ works. Meta’s new answer admits that it used compilations of works such as those from LibGen, Z-Lib, Sci-Hub, and CommonCrawl to train its LLMs, but maintains that Meta engaged in fair use and is not liable for infringement of plaintiffs’ works.

Meta also filed a request for leave to file a rebuttal expert report from its expert, Dr. Choffnes, in response to plaintiffs’ expert report by Dr. Krein, which it served on January 10th in support of its new claims of infringement based on distribution via torrenting. In that request, Meta points to plaintiffs’ recent motion for summary judgment, which it claims distinguishes seeding (uploading parts of a torrented file after it is downloaded) and leeching (uploading parts of a torrented file while it is being downloaded). It is our understanding that both phases of torrenting (i.e., both leeching and seeding) include uploading portions of the file. So it is unclear if Meta is drawing a distinction here without a technical difference. If the Court allows the supplemental report, it would apparently speak to this concept of leeching in addition to seeding.

2. Brave Software, Inc. v. News Corp., et al.

Current Status: No major substantive developments this past week. No new developments have taken place yet in this newly filed case but check back here to find out when they do.

As reported last week: Brave Software filed an action for declaratory judgment of no copyright infringement, copyright misuse, and no breach of contract against News Corp, Dow Jones, and NYP Holdings. Brave distributes the open-source Brave browser, which blocks ads and trackers while displaying its own limited set of ads as a source of revenue for the company. Brave Software also developed Brave Search, which exited beta in mid-2022 and which serves as the default search engine in the Brave browser. Brave Search is also significant because it is the search engine which certain AI chatbots such as Perplexity, Mistral, and others make use of. Brave filed its declaratory judgment action following the receipt of cease-and-desist letters from the named defendants.

The allegations are that Brave, by indexing defendants’ websites in order to enervate its Brave Search engine, infringed on defendants’ copyrights and breached their terms of service. In its complaint, Brave characterized these allegations as baseless bullying intended to prevent new entrants to the sectors already dominated by Big Tech. Brave maintains that its indexing is well-established fair use and non-infringing. Although it does not directly implicate LLMs, this case’s relation to AI cannot be denied. Not only is Brave Search used by several AI chatbots, the allegations at issue also track the logic of copyright infringement theories alleged by artists and authors against AI companies. As always, we will keep you updated here each week as the case develops.

3. Thomson Reuters v. Ross Intelligence: The “Fair Use” Shot Heard Around The Litigation World

On February 11th, in a case that comes tantalizingly close to deciding the issue of “fair use” in generative AI model training (with many taking the position that now that issue is firmly decided, as laid out below), Circuit Judge Bibas of the District of Delaware ruled that the “fair use” doctrine does not protect the use of West Headnotes in determining what to display as a result of a user query. Thomson Reuters v. Ross Intelligence involves an AI search tool made by the now-defunct Ross Intelligence (“Ross”). Ross’ tool accepted user queries on legal questions and responded with relevant case law. To determine what cases to provide in response to user queries, Ross compared the user queries to “Bulk Memos” from LegalEase, which were written using Westlaw Headnotes. Boiling it down, when a user’s query contained language similar to a West Headnote, Ross’ tool would respond by providing the cases that the West Headnote related to.

While Ross’s tool was not a modern generative AI model (it didn’t use a transformer model or perform next-token prediction to generate unique output for queries), an important similarity exists between Ross’ use of West Headnotes and the way generative AI models train on other copyrighted materials. Ross’ tool did not actually reproduce the West Headnotes in response to a user’s query. Ross used the Headnotes just for “training,” that is, to determine what to produce in response to a user's query. It is easy to draw an analogy between Ross’ use of West Headnotes to determine what cases are responsive to a user’s query, and OpenAI’s use of The New York Times articles to determine how to respond to a question about politics (see the separate The New York Times case against OpenAI summary below). The technology is different, but the themes are similar.

In that context, the Court’s grant of summary judgment against Ross’ fair-use defense — as a matter of law — provides insight into how another court might rule in a generative AI training case. “Fair use” is based on four factors: (1) the purpose and character of the use, (2) the nature of the copyrighted work, (3) the amount of the work used, and (4) the potential impact on the market. The Thompson Reuters Court found that factors two and three favored Ross because of the low degree of creativity involved in carving out headnotes from cases, as well as the fact that Ross did not output the headnotes themselves but rather judicial opinions. However, factor one favored Thomson Reuters because of the commercial nature of Ross’ product and the fact that it was not transformative. The Court noted that Ross’ product was not generative AI, suggesting that a generative AI product could be more transformative than the simpler lexical searching tool that Ross made. Finally, the fourth factor and “undoubtedly the single most important element of fair use” favored Thomson Reuters because of the potential impact on Thomson Reuters’ ability to sell its own data for use in training AI if Ross’ use was permissible. On balance, the Court flatly rejected Ross’ “fair use” defense as a matter of law. That question will not go to a jury.

AI developers will undoubtedly focus on the issue of transformative-use in generative AI fair-use battles to come, but the “commercial use” and “market impact” factors will continue to favor content owners over generative AI companies. We have already seen several massive licensing deals where companies like Reuters and Reddit are profiting from the sale of their own data. If courts continue to favor the “market impact” factor as we see in Thompson Reuters, then OpenAI, Sonos, and the like will have an uphill battle to prove their “fair use” defense.

4. The New York Times v. Microsoft & OpenAI

Background: This is perhaps the single most closely watched litigation involving copyright owners and generative AI tech companies.

On December 27, 2023, The New York Times sued Microsoft and OpenAI in the U.S. District Court for the Southern District of New York for copyright infringement and other related claims. The Times alleges that the companies used “millions” of its copyrighted articles to train their AI models without its consent. The Times claims this has resulted in economic harm by pulling users away from their paywalled content and impacting advertising revenue. The complaint alleges several causes of action, including copyright infringement, unfair competition, and trademark dilution. In its pleadings, The Times asserts that Microsoft and OpenAI are building a “market substitute” for its news and further that their AI generates “hallucinations” based on The Times’ articles also substantially damage its reputation and brand. The Times seeks “billions of dollars of statutory and actual damages.” Microsoft and OpenAI assert the defense of “fair use” - i.e., no license, payment or consent is needed.

On September 13, 2024, the Court granted a motion to consolidate the case with another brought by the Daily News and other publications. The judge assigned to the consolidated cases i Judge Sidney Stein.

Current Status: No major substantive developments this past week. We reported three weeks ago, Magistrate Judge Wang set a date for a second in-person settlement conference on March 7th following requests by both defendants and plaintiffs. So far, nothing has materialized from these discussions. It remains to be seen if the parties will be able to come to an agreement without further litigation.

5. In re OpenAI ChatGPT Litigation

Background: Comedian Sarah Silverman and other artists filed this class action lawsuit in the Northern District of California on June 28th, 2023, asserting copyright infringement claims, in addition to unfair competition, negligence, and unjust enrichment. The plaintiffs alleged that OpenAI used their copyrighted written works to train its AI chatbot. In February, the Court dismissed most of the claims against OpenAI, rejecting plaintiffs’ argument that the content generated by ChatGPT (i.e., the “output”) infringes their copyrighted works because there is no “substantial similarity” on the “output” side of the copyright question (and, therefore, no meaningful harm). But the Court gave the plaintiffs an opportunity to amend their complaint to plead a more direct link of harm (which they later did). In July, the Court dismissed the unfair competition claim. The claim for direct infringement is the only main one that remains. The case is assigned to Judge Araceli Martinez-Olguin.

Current Status: OpenAI attempts to prevent amended complaint. This week, OpenAI filed its opposition to plaintiffs’ motion for leave to amend their complaint, filed March 4th. According to OpenAI, plaintiffs’ amendment would broaden the scope of the class which brought the suit against them, introduce eleven new claims, and add Microsoft as a defendant. The new claims include a DMCA claim and unjust enrichment. Meta further complains that the proposed amended complaint would change the putative class definition from “those whose works were allegedly ‘used as training data for the OpenAI’ LLMs” to cover all works allegedly ‘accessed, copied, or used by OpenAI’ for any purpose.” OpenAI argues that to allow such an amendment at this stage of litigation would prejudice them and reintroduce claims previously dismissed by the Court.

Plaintiffs have also continued to push back against their recent discovery losses, where the Court denied discovery from Reuters and Microsoft. It remains to be seen whether they will gain access to any of this information.

6. UMG Recordings v. Suno

Background: The RIAA on behalf of the major record labels filed their lawsuit in the federal district Court in Massachusetts on June 24th, 2024, for mass copyright infringement and related claims based on alleged training on their copyrighted works. Suno is a generative AI service that allows users to create digital music files based on text prompts. This is the first case brought against an AI service related to sound recordings. In its answer on August 1st, 2024, Suno argued that its actions were protected by fair use. The judge assigned is Chief Judge F. Dennis Saylor, IV.

Current Status: The parties continue to feud over discovery matters. As we reported several weeks ago, plaintiff and defendant have both noted inability to resolve their disagreements over discovery matters. On March 19th this trend continued with a new round of discovery letters from both parties. Suno filed a letter asking for foundational discovery regarding the works with UMG alleges are being infringed. Plaintiffs retorted that there is no serious question as to whether they own the works which they allege are infringed and that this is a delay tactic given the wide range of works which they allege have been infringed.

For their part, plaintiffs also filed a letter asking that Suno be compelled to produce documents provided to its investors regarding the legal and business risks associated with its use of copyrighted recordings to build a generative AI music service.

7. UMG Recordings v. Uncharted Labs (d/b/a Udio)

Background: This case was brought on June 24, 2024, in the Southern District of New York, by a group of major record companies against the company behind Udio, a generative AI service launched in April 2024 by a team of former researchers from Google Deepmind. Much like Suno (above), Udio allows users to create digital music files based on text prompts or audio files. And as with the complaint against Suno, plaintiffs rely on tests comprising targeted prompts including the characteristics of popular sound recordings — such as the decade of release, the topic, genre, and descriptions of the artist. They allege that using these prompts caused Udio's product to generate music files that strongly resembled copyrighted recordings. The claims are for direct infringement and related causes of action. The judge assigned is Judge Alvin K. Hellerstein.

Current Status: Plaintiffs ask for more time to file amended complaint. Although there have been few developments these past few weeks, on March 21st, plaintiffs filed an opposed motion to extend time to file an amended complaint by two days (from March 25 to March 27). Plaintiffs cite discovery difficulties and the burden of examining Udio’s training datasets as the cause for this delay. Although the Court has not yet ruled on the motion, it suggests that plaintiffs will soon file an amended complaint regardless of whether they receive an extension.

8. Concord Music Group, et al. v. Anthropic

Background: UMG, Concord Music and several other major music companies sued Amazon-backed OpenAI competitor Anthropic on October 18th, 2023 in the U.S. District Court (Middle District of Tennessee). The music companies assert that Anthropic is infringing their music lyric copyrights on a massive scale by scraping the entire web to train its AI, essentially sucking up their copyrighted lyrics into its vortex – all without any licensing, consent or payment. In its response, Anthropic claimed fair use. The case was transferred to the Northern District of California on June 26th, 2024 and closed in Tennessee. The judge assigned is Judge Eumi K. Lee. The parties have not yet had a case management conference.

Current Status: No major substantive developments this past week. Last week we reported that the parties had submitted a joint stipulation to extend the case schedule by around five months, which was entered later in the week. Although a discovery hearing was held on March 18th, no notable developments have issued from that hearing yet. We will continue to provide updates as the parties work through their discovery disputes.

9. Dow Jones & Co, et al v. Perplexity AI

Background: On October 21st, 2024 The Wall Street Journal and The New York Post sued generative search company Perplexity AI in the U.S. District Court for the Southern District of New York for copyright infringement and other related claims. A new twist in this litigation is the focus on Retrieval Augmented Generation (“RAG”) AI. RAG GenAI not only uses an LLM trained on copyrighted material to respond to individual prompts, but also goes out to the web to update itself based on the relevant query. Perplexity even said the quiet part out loud, encouraging its users to “skip the links” to the actual sources of the copyrighted content. Based on Perplexity’s RAG model, the media plaintiffs allege that Perplexity is infringing on their copyrights at the input and output stage, sometimes reproducing copyrighted content verbatim. Plaintiffs cited their parent company News Corp’s recent licensing agreement with OpenAI in explaining that GenAI technology can be developed by legitimate means.

Current Status: No major substantive developments this past week. Last week we reported that plaintiffs submitted their memorandum of law opposing defendants’ motion to dismiss or transfer the case. Plaintiffs compared Perplexity to a supplier of counterfeit handbags claiming personal jurisdiction was improper in New York because the bags were made elsewhere. Plaintiffs also pushed back on Perplexity’s effort to dismiss ten new copyright registrations added in its amended complaint. Although the docket reflects no new events since then, check back here where we will continue to report as the case develops.

10. Sarah Andersen v. Stability AI

Background: Visual artists filed this putative class action on January 13th, 2023, alleging direct and induced copyright infringement, DMCA violations, false endorsement and trade dress claims based on the creation and functionality of Stability AI’s Stable Diffusion and DreamStudio, Midjourney Inc.’s generative AI tool, and DeviantArt’s DreamUp. On August 12th, 2024, the Court dismissed many of the claims in the plaintiffs’ first amended complaint, leaving the claims for direct copyright infringement, trademark, trade dress, and inducement. The assigned judge is Judge William H. Orrick.

Current Status: The court allows 30 depositions and denies Stability AI’s proposed restrictions on ESI discovery. As we reported a month ago, the parties submitted a joint letter brief relating to deposition protocols on February 12th where plaintiffs requested up to 60 depositions of fact witnesses. On March 19th, the Court issued an order on ESI and deposition protocols in the case. With respect to ESI, the order entered did not appear to diverge significantly from the model order from which the parties started, though the Court at points denied proposed modifications by defendants, describing them as overly restrictive. With respect to depositions, the court agreed with plaintiffs that an expanded number of depositions was warranted in the case but chose to allow only 30 depositions rather than the 60 which plaintiffs had originally requested.

11. Raw Story Media & Alternet v. OpenAI

Background: News publishers Raw Story Media and Alternet filed suit against OpenAI and Microsoft on February 28th, 2024 in the Southern District of New York, claiming their articles were used to train the LLM that powers OpenAI’s ChatGPT. Rather than claiming copyright infringement, the plaintiffs alleged one cause of action for violating the DMCA (which is a separate provision of the Copyright Act related to Internet content). The plaintiffs claimed that OpenAI removed the CMI from their articles, which they argue is a violation of the DMCA.

Current Status: No major substantive developments this past week. As we reported last month, Raw Story Media submitted its reply in support of its request for leave to file an amended complaint. They assert that the removal of copyright management information (CMI) by OpenAI constitutes copyright infringement, which is a recognized harm under Article III. Additionally, they claim that OpenAI unlawfully profited from this removal, which is analogous to unjust enrichment, a common-law injury. If the Court finds that standing requires dissemination, Raw Story Media requests jurisdictional discovery to determine if OpenAI disseminated their articles. With their earlier complaint dismissed in its entirety for lack of standing, this is Raw Story Media’s last chance in this lawsuit.

As we reported last week, plaintiffs submitted a notice of authority referencing the Motion to Dismiss order in Kadrey v. Meta Platforms, Inc.

12. Getty Images v. Midjourney and Stability AI

Background: Getty Images filed this lawsuit against image generator Stability AI on February 2nd, 2023, accusing the company of infringing more than 12 million photographs, their associated captions and metadata, in building and offering Stable Diffusion and DreamStudio. Getty’s claims are similar to those in The New York Times v. Microsoft & OpenAI case above, but here they are in the context of visual images instead of written articles - i.e., unlicensed scraping by their AI with an intent to compete directly with, and profit from, Getty Images (i.e., market substitution). This case also includes trademark infringement allegations arising from the accused technology’s ability to replicate Getty Images’ watermarks in the AI outputs. Getty filed its Second Amended Complaint on July 8th, 2024, and the parties are currently engaged in jurisdictional discovery related to defendants’ motion to transfer the case to the Northern District of California. The judge assigned is Judge Jennifer L. Hall.

Current Status: Still no update for Getty. Still no update for Getty. As we reported last month, Getty submitted a letter to the Court on November 25th explaining its frustration with Stability AI’s refusal to participate in discovery or participate in a Rule 26(f) conference. In August, Stability AI argued that they were under no obligation to commence fact discovery until the court issued its ruling on jurisdiction. That ruling has still not come, so we can assume Stability is sticking with that argument. Getty requested that the Court order Stability to stop delaying and proceed with the case. Its been over a month, and still no response from the Court.

13. The Intercept Media v. OpenAI

Background: The Intercept Media, a news publisher represented by the same firm that represents the plaintiffs in the Raw Story Media litigation below, filed suit against OpenAI and Microsoft on February 28th, 2024 in the Southern District of New York, the same day Raw Story Media commenced their suit. Like the Raw Story allegations, The Intercept alleged that their articles were used to train ChatGPT and brought claims for the removal of the copyright management information (“CMI”) from the articles.

Current Status: No major substantive developments this past week. Nothing new since OpenAI filed its answer to The Intercept’s First Amended Complaint on December 6th. OpenAI presented 10 affirmative defenses, including fair use, several equitable doctrines, statute of limitations, lack of mitigation, and failure to state a claim.

14. The Center for Investigative Reporting v. OpenAI

Background: The Center for Investigative Reporting, which produces Mother Jones and Reveal, sued Microsoft and OpenAI for essentially the same claims made in The New York Times case above.

Current Status: Motion to consolidate recently granted! Microsoft and OpenAI asked the Court to consolidate this case with NY Times v. Microsoft & OpenAI, and — and, as indicated above, the Magistrate granted the motion to consolidate on October 30th, 2024 (refer to the activity discussed above).

15. The Authors Guild, et al. v. OpenAI

Case Background. The Authors Guild and seventeen individual authors (including John Grisham, George R.R. Martin and Nicholas A. Basbanes) filed a putative class-action suit against OpenAI on September 19th, 2023. The plaintiffs claimed that OpenAI trained its ChatGPT LLM by copying their copyrighted works. The complaint brings claims under 17 U.S.C. §501 for direct, vicarious, and contributory copyright infringement. The case is assigned to Judge Ona T. Wang.

Current Status: No major substantive developments this week.  We are still waiting for the Court’s decision on discovery consolidation. The case seems to be on ice until then.

16. INTERNATIONAL CASE TRACKED: Canadian News Media Companies v. OpenAI

In a case similar to The New York Times v. OpenAI, Canada’s major news organizations sued OpenAI for copyright infringement on November 28th. Filed in Ontario’s Superior Court of Justice, the news organizations are seeking billions of dollars in compensation for the “ongoing, deliberate, and unauthorized misappropriation of the Plaintiffs’ valuable news media works.” This is the first case of its kind in Canada, and presents a new front against OpenAI, after one was opened in Germany in Gema v. OpenAI as reported last week.

See https://litigate.com/assets/uploads/Canadian-News-Media-Companies-v-OpenAI.pdf

17. INTERNATIONAL CASE TRACKED: GEMA v. OpenAI

GEMA, a German association representing more than 95,000 composers, lyricists and publishers, filed suit in German court accusing OpenAI of reproducing their members’ song lyrics without a license. Gema claims this is a test case to clarify the law in Germany, and that it aims to establish a license model that would compensate music creators whose works are used to train AI models. The details of German copyright law are a bit beyond the scope of this blog, but we did think it noteworthy that the litigation trend is catching on worldwide. While we don’t plan to track this case closely, we will watch for any momentous developments.

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