Here is our latest review and assessment of major AI-related disputes in the media and entertainment sectors.
Our AI Litigation Tracker is prepared by McKool Smith principal Avery Williams.
1. SDNY Multi-District Litigation
Current Status: The MSJs are out! Market substitution is at the forefront. This past week the parties filed their summary judgment motions and associated briefing. Not all summary judgment briefing is available on the public docket yet, but the central dispute, as expected, is whether the infringement alleged by the various plaintiffs constitutes fair use. The arguments presented fall into two main categories: those applicable to books (such as those the Class Plaintiffs argue are infringed) and those applicable to news (such as the works at issue raised by The New York Times and other News Plaintiffs).
With respect to books, the Class Plaintiffs argue three bases for infringement: 1) the downloading of Books to be used as training data, 2) the training of OpenAI’s models, and 3) the distribution of copyrighted content when the models regurgitate training data in response to user prompts. Although the plaintiffs continue to allege damages from lost opportunities to license their works for training, they placed the dilution theory of market harm (advanced in Judge Chhabria’s summary judgment ruling in Kadrey v. Meta) at the top of the “effect on the market” fair-use factor. Although the exhibits are redacted, Class Plaintiffs appear to have located internal discussion by OpenAI about the potential economic impact of their models’ ability to generate stories and other book-like content which plaintiffs allege would displace human-made works in the market.
The Defendants responded by denigrating both the source material and their own outputs. Microsoft presented evidence claiming that customers are disinterested in AI-generated books and, thus, that AI-generated books pose no risk of market dilution. OpenAI took a slightly different angle, arguing that AI-generated books would be non-infringing and thus should carry no weight when examining market harm. According to OpenAI, adopting the market harm theory would transform copyright law into a vehicle for prohibiting competition from new expressions. With respect to news, the Defendants argue that news articles primarily consist of non-copyrightable factual content and, thus, that the use of this factual content for the purpose of training LLMs does not constitute copyright infringement. We have our doubts about the argument that news reporting is nothing but recitation of facts, but we will see what the court thinks soon enough.
Microsoft attacks the plaintiffs’ market-harm argument as anticompetitive and protectionist. Microsoft accuses the News Plaintiffs of entrenching their current business model, which is based on driving traffic from users who find news websites via traditional search engines. They argue that—to the extent that LLMs serve as a substitute for traditional searches—the News Plaintiffs are not entitled to maintain their market position in the face of new and improved technologies for information retrieval. We find the comparison imperfect. Traditional search engines did not provide news to users. Users found news websites using traditional search engines. LLMs are providing the allegedly stolen end-product, not facilitating a user’s search for that information.
Additionally, Microsoft and OpenAI filed answers to the recently filed amended complaints by The New York Times, Daily News, and Ziff Davis.
2. UMG Recordings v. Suno
Current Status: Suno files its answer to Plaintiffs’ First Amended Complaint. Last week, Plaintiffs filed their First Amended Complaint alleging that the efforts taken by Suno to avoid YouTube’s rotating cipher method of preventing videos from being downloaded constituted the avoidance of protections intended to prevent copying. Plaintiffs are asking for up to $2,500 for each act of circumvention which, given the sheer volume of music hosted on YouTube, could considerably increase their final damages. This week, Suno filed its Answer to the amended complaint, though the answer contained no notable content beyond broad denial of the new allegations.
3. Concord Music Group, et al. v. Anthropic
Current Status: The Court relates the Round Hill Music cases against Anthropic. As discussed last week, Anthropic asked that the Court relate the newly-filed Round Hill Music LP cases to the Concord Music Group case, citing similarity in issues between them. In response, Round Hill Music filed an opposition indicating that they did not wish that their cases being related to Concord v. Anthropic. Nonetheless, this week the Court entered an order relating the cases, tying Round Hill Music’s success, at least in part, to the outcome of summary judgment in this action.
4. Sarah Andersen et al. v. Stability AI, et al.
Current Status: Plaintiffs file for sanctions against DeviantArt. Some time ago, Plaintiffs filed motions for issuance of letters rogatory so that they could depose two engineers at DeviantArt: Surovenko and Trofimov. The two engineers were located in Canada, which necessitated the use of letters rogatory to access them and the retention of Canadian counsel. Apparently Plaintiffs were not happy with the outcome of those efforts. This week, in a heavily-redacted filing, Plaintiffs moved for sanctions based on Surovenko’s recent departure from DeviantArt, which rendered him unavailable for deposition. With respect to Trofimov, Plaintiffs allege that DeviantArt engaged in gamesmanship by forcing them to resort to extraterritorial means to depose the engineer before eventually representing him during that deposition. Plaintiffs have requested repayment of their expenses.
5. Reddit v. Anthropic
Current Status: No major substantive developments this past week. There have been few developments in this case since it was transferred back to state court. Around mid-June, Anthropic filed a motion to dismiss Reddit’s claims, in which it argued that Reddit’s breach of contract claims are preempted because they address the same harms that the Copyright Act seeks to protect against. Anthropic also questioned whether Reddit’s browsewrap agreement were sufficient to form contractual obligations in the first place. Last week, Anthropic filed a reply supporting its motion to dismiss, in which it broadly reiterated the argument that copyright claims should be heard in federal court and that Reddit’s other claims were deficient. This week included no notable new filings, although the parties have filed briefing regarding discovery disputes.
6. Richard Kadrey, et al. v. Meta
Current Status: No major substantive developments this past week. This case has seen relatively little development over the past several weeks. This week, the parties filed a Joint Discovery Status Report detailing ongoing disputes, which include an undecided dispute regarding the production of command histories for Meta’s machine learning servers and the ability to search or inspect Meta’s “ML hub.” The report also previewed forthcoming letter briefing regarding privilege claims by Meta. Finally, the parties presented their positions on what Plaintiffs allege are improper scope objections raised during 30(b)(6) objections. The parties expect to raise this dispute at the next discovery hearing before the Court.
7. Disney, Universal, and Warner Bros. v. Midjourney
Current Status: No major substantive developments this past week. This past week included no notable new filings, with only a handful of routine discovery dispute docket entries. The most notable ongoing dispute, however, is over whether Disney can maintain a claim for secondary copyright infringement. Several weeks ago, Disney filed a response to Midjourney’s motion to dismiss Disney’s secondary copyright infringement claims, raising two core arguments. The first argument was that, because they allege vicarious infringement as part of the same claim that Midjourney seeks to have dismissed, Midjourney’s motion cannot succeed from the start. Additionally, however, Disney maintained that its theory of secondary copyright infringement could stand on inducement rather than contributory infringement. Given that Cox Communications has resulted in many parties discussed here dropping their secondary copyright infringement claims, it will be interesting to see whether the Court allows Disney to maintain its theories.
Two weeks ago, Midjourney replied, arguing that Disney’s complaint did not plausibly state a claim for induced infringement. Midjourney primarily relies on the fact that—according to their argument—none of the public statements pointed to by Disney are plausibly directed to promoting infringement. It appears that Midjourney is on the backfoot here, given that 12(c) motions are evaluated with disputed facts presumed favorable to the non-movant. Whether or not a juror would buy Disney’s arguments regarding inducement, they could, and that may be enough for Disney to avoid their claims being dismissed at this stage.
8. Hendrix v. Apple
Current Status: No major substantive developments this past week. This case has seen little movement since Plaintiffs filed their consolidated complaint followed by Apple filing their answer. However, about two months ago, the parties submitted a stipulated protective order to the Court which was subsequently granted. The order provides for the inspection and printing of source code, indicating that technical discovery is beginning behind the scenes. This week included no notable new filings.
9. Sony v. Uncharted Labs (d/b/a Udio)
Current Status: No major substantive developments this past week. The past months in this case have included no notable new filings, with no new docket entries since late June. Last week, the parties submitted a joint motion for extension of time related to discovery deadlines, pushing the production of third-party documents from August 25 to October 1 and the production of prompt and output logs by Udio from August 25 to October 15. The Court granted the extension the same day.
10. Disney et al. v. MiniMax & Hailuo AI
Current Status: No major substantive developments this past week. This week saw no notable developments. Over a month ago, Plaintiffs filed their answer to counterclaims raised by the Defendants—namely that the accused services’ Terms of Use became binding on Disney when it performed initial research ahead of filing suit and that Disney therefore has indemnified Defendants or otherwise breached their contract. The Answer itself was short, with Disney largely denying all allegations related to the formation of a contract between the parties. This is a unique issue not yet seen in other copyright cases, so check back soon to see if the Court addresses the argument in the near term.
11. Elsevier et al. v. Meta
Current Status: No major substantive developments this past week. This case saw no significant new filings on the docket this week. Over a month ago, Meta recently filed its Answer to Elsevier’s complaint and raised a number of defenses, including its Sixth Affirmative Defense of copyright misuse and unclean hands. Several weeks ago, Plaintiffs filed a letter requesting to move to strike this defense, effectively arguing that the facts as plead cannot would be insufficient to support a finding of copyright misuse or unclean hands. Unclean hands is a defense that has been raised by several other defendants tracked here, but this is the first instance of a Plaintiff pushing back, making the resolution of this issue particularly interesting. If Plaintiffs succeed, we may see the defense challenged across other suits.
