IP Law Daily, COPYRIGHT NEWS: More newspapers sue Microsoft, OpenAI for alleged copyright infringement, (May 2, 2024)

By Jonathan Anderson

The suit follows a similar complaint brought by The New York Times Company in January alleging copyright infringement for using news stories to train and populate artificial intelligence products.

Microsoft and ChatGPT creator OpenAI are facing another lawsuit brought by the press over their use of news articles to develop artificial intelligence (AI) products. The suit, filed by major newspapers owned by Alden Global Capital, advances eight causes of action including various forms of copyright infringement, illegal removal of copyright management information, unfair competition, and trademark dilution. The complaint seeks unspecified damages and destruction of AI models and training sets that incorporate the publishers’ works (Daily News, LP, et al., v. Microsoft Corporation, et al., filed April 30, 2024). The suit follows similar litigation brought by The New York Times Company in January (New York Times Co. v. Microsoft Corp., filed December 27, 2023).

Background. On April 30, 2024, eight newspapers owned by Alden Global Capital filed the latest suit in the U.S. District Court for the Southern District of New York. The plaintiffs are Daily News, LP; Chicago Tribune Company, LLC; Orlando Sentinel Communications Company, LLC; Sun-Sentinel Company, LLC; San Jose Mercury-News, LLC; DP Media Network, LLC; ORB Publishing, LLC; and Northwest Publications, LLC. The plaintiffs represent the New York Daily News, Chicago Tribune, Orlando Sentinel, San Jose Mercury-News, Denver Post, Orange County Register, and the Pioneer Press. Defendants are Microsoft Corporation; OpenAI, Inc.; OpenAI LP; OpenAI GP, LLC; OpenAI, LLC; OpenAI OpCo, LLC; OpenAI Global, LLC; OAI Corporation, LLC; and OpenAI Holdings, LLC.

The lawsuit alleges that defendants used the newspapers’ copyrighted news articles without permission or payment to develop large language models (LLMs) that power generative AI products, including ChatGPT and Microsoft’s Copilot products. Such uses included scraping the newspapers’ websites to procure the news content, training the models with the newspaper content, and reproducing the newspaper content. The suit also alleges that defendants have diluted some of the publishers’ marks because the reproduced material is attributed to the publishers but is inaccurate and low quality.

Direct copyright infringement. The first count of the complaint alleges that defendants have directly infringed on the newspapers’ exclusive rights in their copyrighted works by training datasets containing the newspapers’ content; storing, processing, and reproducing the datasets to train the language models; and by disseminating generative output containing copies and derivatives of the works.

Vicarious copyright infringement. The second count alleges vicarious copyright infringement. The complaint alleges that Microsoft profited from the infringement by various OpenAI entities, which incorporated the infringing models trained on the newspapers’ works into its own products. The complaint also alleges that certain OpenAI entities profited from the infringement.

Contributory copyright infringement against Microsoft. Count three alleges contributory copyright infringement on behalf of the publishers against Microsoft. The complaint alleges that Microsoft provided the supercomputing infrastructure and directly assisted OpenAI by building training datasets containing copies of the newspapers’ works; storing, processing, and reproducing the training datasets with the newspaper’ works to train models; and providing the computing resources to host, operate, and commercialize AI products.

Contributory copyright infringement against all defendants. Count four alleges contributory copyright infringement on behalf of the publishers against all defendants. The publishers allege that if any GPT user is liable for direct infringement, defendants materially contributed to and directly assisted with the direct infringement. This is because defendants jointly developed models capable of distributing unlicensed copies of the publishers’ works to end users; built and trained the models using the publishers’ works; and decided what content is outputted. The complaint alleges that defendants had actual knowledge of or constructive knowledge of direct infringement by end users or were willfully blind to such direct infringement.

DMCA § 1202 CMI removal. Count five of the complaint alleges that defendants removed the publishers’ copyright management information (CMI) in violation of the Digital Millennium Copyright Act (DMCA) to build training datasets, including removing CMI from works scraped directly from publishers’ websites and from third-party datasets. Such conduct, the complaint alleges, was done knowingly and to help infringe publishers’ copyrights and conceal the infringement. Defendants also created copies and derivative works based on the newspapers’ works and distributed such works without CMI.

Common law unfair competition by misappropriation. The sixth count alleges common law unfair competition by misappropriation against all defendants. The complaint alleges that by offering content that is the same or like what the newspapers publish, defendants’ products compete directly with the publishers’ content, including for web traffic. The complaint further alleges that defendants’ actions have deprived the publishers from the benefits of their work, including loss of advertising and subscription revenue, which has substantially threatened the quality of publishers’ content. Defendants’ conduct also disincentivizes publishers to produce original journalism because it can be so easily reproduced.

Federal trademark dilution. Count seven alleges trademark dilution under 15 U.S.C. § 1125(c) on behalf of four publishers against all defendants. The complaint alleges that the diluted trademarks are distinctive and famous marks, and that defendants have engaged in unauthorized use of the marks in branding outputs generated by defendants’ products. Such outputs contain what the complaint describes as lower-quality and inaccurate writing, which has been falsely attributed to and diluted the quality of plaintiff’s marks.

State dilution and injury to business reputation. Count eight alleges dilution and injury to business reputation under N.Y. Gen. Bus. Law § 360-l on behalf of four publishers against all defendants. The complaint alleges that defendants are aware their products produce inaccurate content and falsely attribute that content to the publishers.

Relief sought. The complaint seeks unspecified statutory and compensatory damages, restitution, and disgorgement; an order to permanently enjoin defendants from the alleged infringing conduct; and an order to destroy all models and training sets that incorporate publishers’ works. The complaint also seeks an award of costs, expenses, and attorneys’ fees.

New York Times case. The Times’ complaint advances seven counts against Microsoft and OpenAI: copyright infringement, vicarious copyright infringement, contributory copyright infringement, violations of the Digital Millennium Copyright Act (DMCA), common law unfair competition by misappropriation, and trademark dilution. So far, Microsoft and OpenAI have filed motions to dismiss the counts alleging contributory infringement, DMCA violations, and state-law misappropriation.

The Case is No. 1:24-cv-03285.

Attorneys: Jeffrey A. Lindenbaum (Rothwell, Figg, Ernst & Manbeck, PC) for Daily News, LP, Chicago Tribune Co., LLC and Orlando Sentinel Communications Co., LLC.

Companies: Daily News, LP; Chicago Tribune Co., LLC; Orlando Sentinel Communications Co., LLC; Microsoft Corp.; OpenAI, Inc.; OpenAI LP

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