In a recent case, Raw Story Media Inc., AlterNet Media Inc. vs. OpenAI, the US District Court, Southern District of New York found that OpenAI had not violated the Digital Millenium Copyright Act and Article III standing, as alleged by the Plaintiffs.
BACKGROUND OF THE CASE
The lawsuit was filed against OpenAI by two news organisations, Raw Story Media and AlterNet Media Inc. (collectively, the “Plaintiffs”), that publish news articles and investigative reports online. The Plaintiffs alleged that the training sets used by OpenAI removed crucial copyright details such as the author’s name, title, and other copyright information, collectively referred to as Copyright Management Information (CMI). According to the Plaintiffs, the removal of CMI is a violation of Section 1202(b)(i) of the DMCA. The Plaintiffs sought injunctive relief and claimed damages for this violation.
THE COURT’S FOCUS: SECTION 1202(B) AND ARTICLE III STANDING
The court’s analysis centred on two key legal frameworks – DMCA Section 1202(b) and Article III standing. Under Section 1202(b), removing CMI without the copyright owner’s permission is prohibited when there are reasonable grounds to believe such removal would conceal infringement. The Article III standing requirement states that the Plaintiffs must demonstrate that they have suffered actual or imminent injury. The Plaintiff must establish a genuine stake in the case’s outcome and show personal injury resulting from the defendant’s actions.
The Plaintiffs asserted their right to seek two forms of relief – monetary and injunctive. According to the Plaintiff, the removal of CMI is a concrete injury, and hence, they can claim damages. The Plaintiffs argued that they should be able to pursue injunctive relief as there is a risk that ChatGPT will provide responses from the Plaintiff’s copyrighted work.
In addressing the claim for monetary compensation, the Judge noted that the Plaintiffs’ view of Section 1202 of the DMCA was mistaken. The Plaintiffs believed that this section grants copyright owners control over how future versions of their work can differ from the original, but the court clarified that such control can afford protections under Section 106 of the Copyright Act but not under Section 1202 of the DMCA Act. In other words, OpenAI may reproduce or even create derivatives of the Plaintiffs’ works without incurring liability under Section 1202 if OpenAI keeps the Plaintiffs’ CMI intact. Further, the court noted that the Plaintiffs failed to demonstrate any actual adverse effects stemming from the alleged DMCA violation, which is essential for establishing standing as laid down in TransUnion LLC v. Ramirez. This precedent states that a Plaintiff’s injury must be concrete rather than abstract. As a result, it was concluded that the Plaintiffs lack Article III standing to avail damages.
On the question of injunctive relief, the Plaintiffs argued that they are entitled to the injunction requiring OpenAI to remove copies of the Plaintiff’s copyrighted work where CMI was removed, citing the risk of future unauthorized reproduction by ChatGPT. The Judge noted that ChatGPT had been trained to include massive amounts of information from numerous sources, and the likelihood that ChatGPT would output plagiarised content from the Plaintiff’s article is minimal.
The court also clarified that the Plaintiff’s true grievance lay not in CMI removal but in OpenAI’s use of their articles to develop ChatGPT without compensation. The court pointed out that this type of compensation is not covered under Article 1202(b)(i) of the DMCA. While the court granted OpenAI’s request to dismiss the suit, it also permitted the Plaintiffs to submit an amended complaint and allowed them to refile their case.
RECENT COURT RULINGS AND ACTIONS IN AI AND COPYRIGHT SUITS
In our previous article, we discussed how the courts dismissed the plaintiffs’ claims in Sarah Anderson et al. v. Stability AI et al. due to insufficient clarity on how Stability AI infringed upon the plaintiff’s copyright. Judge Orrick, however, allowed the plaintiffs to amend their complaint.
Recently, an amended complaint was filed, adding more artists as plaintiffs and naming Runway AI as a new defendant accused of using copyrighted works to train its AI models. The court subsequently granted Stability AI’s motion to dismiss claims under Section 1202 of the DMCA but denied motions to dismiss copyright claims and Midjourney’s motion to dismiss the Lanham Act claims. While the courts set aside the unjust enrichment claims, it provided plaintiffs an opportunity to amend them. Furthermore, DeviantArt’s motion to dismiss both the breach of contract and breach of the implied covenant of good faith claims was successful.
In Authors Guild v. OpenAI, OpenAI filed an answer asserting that its utilization of the plaintiffs’ work constitutes transformative fair use. A judgment in this case is anticipated in early 2025. Similarly, in Kadrey v. Meta, an amended complaint was filed in early 2024, to which Meta responded with a fair use defence. The court subsequently consolidated the case again with Huckabee v. Meta, another class action initiated against Meta in 2023.
In Leovy v. Google, a class action lawsuit was filed concerning the use of personal data to train Google’s AI products. The plaintiffs submitted two amended complaints, with the second amendment focusing solely on a claim for direct copyright infringement. This case remains pending in the courts. Other notable cases, including Center for Investigative Reporting v. OpenAI, Concord Music Group Inc. v. Anthropic PBC, and Getty Images v. Stability AI, are also currently awaiting judicial resolution. These ongoing litigation highlight the increasing scrutiny faced by AI companies regarding the use of copyrighted material. Despite these developments, there is still a lack of clarity on how courts determine the fair use defence in relation to generative AI. The forthcoming rulings are expected to provide critical insights into the fair use defence in the context of generative AI.
Authors: Aishwarya Anil Kumar, Shruti Gupta, Shantanu Mukherjee
