Perplexity AI Case Could Impact AI Landscape

by Zachary Barlow

January 2, 2025

An ongoing case against Perplexity AI has seen a new development as Plaintiffs filed an amended complaint in December alleging that Perplexity has violated their intellectual property rights. The Plaintiffs Dow Jones & Co., Inc and NYP Holdings Inc. own major publications such as The Wall Street Journal, New York Post, Financial News, and Barron’s, which they allege Perplexity’s AI systems copy and disseminate without permission. The case against Perplexity holds potential impacts for the generative AI industry and as ArentFox points out in a recent memo:

“This lawsuit differs from certain other pending IP lawsuits against GenAI companies in that it involves a ‘retrieval-augmented generation’ (RAG) index. This AI architecture interacts with large language models (LLMs) to optimize LLM performance and increase their accuracy and reliability. RAG indices reference material outside of the model’s training data to augment the model’s performance and allow it to consider more recent or timely content when crafting responses to a user’s query. While arguably efficient for end-users, the plaintiffs argue journalists, editors, and staff who create the underlying content ultimately suffer.”

There are a number of pending cases against AI companies for allegedly violating intellectual property laws and how these cases shape up will determine much about the future of generative AI. Courts have yet to determine if the unauthorized use of intellectual property in generative AI models is protected by fair use or some other legal carve out. It may be some time before a legal consensus emerges on the issue, so we’ll continue to monitor these cases closely.