SDNY Court Rules DMCA Claim Can Proceed Against OpenAI

A number of legal cases are pending against AI developers alleging various intellectual property violations, but one case in New York may have broader implications for the AI industry. The Intercept alleges that OpenAI, creator of ChatGPT, violated the Digital Millennium Copyright Act (DMCA). The Intercept alleges that OpenAI used copyrighted works in its AI model’s training data and that the AI reproduces those works verbatim in its responses. Because these reproductions do not include The Intercept’s copyright management information (CMI) they claim that OpenAI violated section 1202(b) of the DMCA. The judge allowed the 1202(b) claim to proceed, ArentFox discusses the implications of this in a recent memo stating:

“Until now, other DMCA claims against AI developers have largely failed — most of these cases have not proceeded past the motion-to-dismiss stage — but the order allowing The Intercept’s claim to proceed renews the possibility that the DMCA may be a viable claim against AI developers. For rights holders, 1202(b) provides distinct causes of action against AI developers with different evidentiary requirements than traditional copyright infringement claims. For developers, 1202(b) is another legal risk to be managed, particularly in the wake of the order in The Intercept case.”

This case is still in its infancy and with the discovery process underway we’re likely to learn a lot more about how OpenAI collects and processes training data. Whether AI systems will become subject to the provisions of the DMCA remains to be seen, but if The Intercept prevails on this claim that could have major impacts on how AI systems are allowed to operate as courts look to balance intellectual property holder’s rights against AI innovations.