IP Law Daily, COPYRIGHT—S.D.N.Y.: Perplexity AI must face newspaper publishers’ claims in New York court, (Aug 22, 2025)

By Thomas Long, J.D.

The GenAI “answer engine” developer had sufficient contacts with New York to meet state and federal requirements for personal jurisdiction, and fairness considerations did not warrant transfer to California.

Perplexity AI, Inc.—the San Francisco-based developer of a generative artificial intelligence “answer engine”—must defend itself in the Southern District of New York against copyright and trademark claims brought by the publishers of the Wall Street Journal and the New York Post, a federal district court in New York City has decided. Concluding that Perplexity had significant business contacts with New York, including the presence of some of Perplexity’s corporate officers and engineers there, the court denied Perplexity’s motion to dismiss for lack of personal jurisdiction. The court also determined that venue was proper in the district and that Perplexity’s contentions regarding convenience and fairness did not warrant transfer to the Northern District of California. Finally, the court also declined to dismiss copyright infringement claims regarding 10 newly registered works that the publishers added to their amended pleadings, determining that the amendment was made on a timely basis (Dow Jones & Company, Inc. v. Perplexity AI, Inc., No. 1:24-cv-07984-KPF (S.D.N.Y. Aug. 21, 2025)).

Parties. Plaintiffs Dow Jones & Company, Inc. and NYP Holdings, Inc. are news publishers incorporated in Delaware and with principal places of business in New York. Among their publications are, respectively, the Wall Street Journal and the New York Post. Both publishers are owned by News Corporation. The defendant, Perplexity AI, is a generative AI (GenAI) company registered in Delaware and with its principal place of business in San Francisco.

Perplexity “answer engine.” Perplexity developed an eponymous GenAI “answer engine” that is the subject of this dispute. Perplexity functions more like an AI-augmented search engine than a chatbot, like such systems as ChatGPT. According to the publishers, the Perplexity answer engine relied on a retrieval-augmented generation (RAG) database, made up of “content from original sources”—including articles, websites, and journals—to provide answers to users. The publishers assert that the RAG databases consisted of “content that [Perplexity] want[s] to use as source material from which to generate the ‘answers’ to user prompts and questions.” Information from the RAG databases were then provided to a large language model (LLM) that “repackages the original, indexed content in written responses … to users,” the publishers contended.

Publishers’ lawsuit. In a lawsuit filed October 21, 2024, the publishers asserted claims for copyright infringement in violation of the Copyright Act and false designation of origin and trademark dilution in violation of the Lanham Act. Their original complaint accused Perplexity AI of populating Perplexity’s RAG databases with copyrighted material, including material owned by the publishers, without getting permission or obtaining licenses. According to the publishers, Perplexity engaged in a “massive amount of illegal copying” of their works (1) in the “input” stage when Perplexity copied their works to populate the RAG databases and (2) in the “output” stage when Perplexity provided responses to users’ prompts that contained the publishers’ copyrighted material. They also accused Perplexity of “generat[ing] made-up text (hallucinations) in its outputs and attribut[ing] that text to Plaintiffs’ publications using Plaintiffs’ trademarks.” The publishers filed a First Amended Complaint on December 11, 2024, and a Second Amended Complaint on January 28, 2025.

Motions to dismiss. Perplexity moved to dismiss the Second Amended Complaint (the “SAC”) for lack of personal jurisdiction and for improper venue, or, in the alternative, to transfer this action to the Northern District of California. Perplexity also moved to dismiss the claims regarding 10 additional works included in the Second Amended Complaint, the copyright registrations for which had not yet issued when the original complaint was filed.

Personal jurisdiction. The court denied Perplexity’s motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). The publishers argued that Perplexity had significant contacts to New York because it was registered there and used or possessed property and office space in the Southern District. Perplexity allegedly employed numerous people in New York, including its chief strategy officer and general manager of finance. These employees allegedly engaged in technology development and promotional efforts in New York. The publishers also noted that Perplexity had several active job listings for prominent company positions in New York. They also alleged that Perplexity’s advertising and marketing directly targeted customers in New York, with an example being a webpage inviting visitors to “Discover New York with Perplexity.”

The court rejected Perplexity’s contention that the publishers failed to establish a sufficient connection between their claims and Perplexity’s contacts with New York. Because the Copyright Act and the Lanham Act do not provide for nationwide service of process, the jurisdictional rules of New York applied. The court first determined that it had personal jurisdiction under New York’s long-arm statute because Perplexity clearly transacted business in the state. Perplexity’s website was “highly interactive,” and its advertising specifically targeted New York.

In addition, there was a sufficient nexus between Perplexity’s conduct of business in New York and the copyright and trademark claims. Some of the engineers and other key employees who worked on assembling the RAG databases were located in New York, including personnel responsible for backend infrastructure and maintenance of the company’s customer-facing website. The court noted that the copyright infringement claim was based on the allegedly illegal inputs into the RAG index, which were “inextricably linked” to the purportedly infringing answers provided to customers on Perplexity’s website. This conduct, along with Perplexity’s registering its business in New York, renting office space, recruiting New York employees, and targeting New York residents through advertising “share[d] a sufficient ‘nexus’ with Plaintiffs’ claims such that jurisdiction is properly established,” the court said. The court reached a similar conclusion with respect to the unfair competition and trademark dilution claims.

The court also held that there was personal jurisdiction under New York’s statute providing for jurisdiction over a defendant that commits a tortious act outside New York that causes injury in New York, and from which the defendant derived substantial revenue. The Perplexity answer engine allegedly was primarily created in San Francisco, and Perplexity’s servers were located in Northern Virginia. The element of an injury taking place in New York was met because the publishers asserted that they had lost revenue from the New York market for content licensing, subscribers, visitors, and users. In the court’s view, the “situs of injury” was New York. These consequences were reasonably foreseeable to Perplexity, and the company admitted engaging in activities meant to derive revenue from interstate or international commerce. To allay concerns that it was opening Perplexity up to personal jurisdiction in every district were any user resided, the court explained that it had “evaluated jurisdiction based on the totality of circumstances presented by this case.”

Finally, the court decided that Perplexity had sufficient minimum contacts with New York to satisfy federal constitutional due process requirements, noting that it had already determined that there were sufficient contacts with New York under two prongs of the state’s long-arm statute. The exercise of personal jurisdiction was reasonable under the Due Process Clause because Perplexity would not face undue burdens from having to litigate in New York, and New York had a manifest interest in providing means of redress for its residents, including the publishers.

Venue. The court also denied Perplexity’s motion to dismiss under Rule 12(b)(3). Venue was deemed proper pursuant to 28 U.S.C. § 1400(a) (for the copyright claims) and 28 U.S.C. § 1391(b) (for the trademark claim). Section 1400(a) states that “proceedings arising under any Act of Congress relating to copyrights or exclusive rights in mask works or designs may be instituted in the district in which the defendant or his agent resides or may be found.” Section 1391 is the general venue statute, provides that a civil action may be brought in a district where any defendant “resides.” A corporate defendant “resides” in a district where it is “subject to the court’s personal jurisdiction with respect to the civil action in question.” Because the court had jurisdiction over Perplexity, venue was proper under these statutes.

As for Perplexity’s request to transfer the case to the Northern District of California, the court turned aside the company’s concerns about “convenience and fairness.” Although the action could have been brought in the Northern District of California, transfer was not appropriate, based on the considerable weight given to the publishers’ choice of forum, as well as the connection between the alleged misconduct (especially the trademark claims) and New York. The location of witnesses and the availability of process were neutral factors, in the court’s view. The court rejected Perplexity’s contention that a forum selection clause in its website’s terms of service favored transfer because the publishers only accessed Perplexity’s site (thus arguably accepting the forum selection clause) “to investigate the possible infringement of their copyrighted works.”

Newly alleged works—registration requirement. Perplexity moved to dismiss claims with respect to the 10 works added to the allegations of the Second Amended Complaint, arguing that they ran afoul of the requirement of 17 U.S.C. § 411(a) that asserted works be registered with the Copyright Office at the time of filing an infringement complaint. Registration certificates for these works had not been issued when the original complaint was filed, but they were registered before the filing of the First Amended Complaint (into which they were incorporated). Although plaintiffs generally are unable to “cure” the defect of unregistered works by obtaining registrations after filing, the court noted that the 10 new works had not been included in the original complaint. The court decided to follow other federal courts that had permitted amendment of pleadings under similar circumstances.

The case is No. 1:24-cv-07984-KPF.

Judge: Failla, K.

Attorneys: Paul T. Cappuccio (Torridon Law PLLC) for Dow Jones & Co., Inc. Eugene Y. Mar (Farella Braun & Martel LLP) for Perplexity AI, Inc.

Companies: Dow Jones & Co., Inc.; NYP Holdings, Inc.; Perplexity AI, Inc.

Cases: AINews Copyright Trademark TechnologyInternet NewYorkNews GCNNews