NYT sues OpenAI and Microsoft in latest AI copyright spat

James Talbot and Gill Dennis of Pinsent Masons said the lawsuit shows how content creators are increasingly asserting their IP rights over AI developers that seek to train their systems using the information those content creators publish.

OpenAI and Microsoft are behind the popular AI systems ChatGPT and Copilot, respectively. In its complaint (69-page / 7MB PDF), filed before a district court in New York on 27 December 2023, the NYT accused OpenAI and Microsoft of seeking to “free-ride” on its “massive investment in its journalism”, by using the content it publishes to “build substitutive products without permission or payment”.

The NYT said the OpenAI and Microsoft AI systems “were built by copying and using millions of The Times’s copyrighted news articles, in-depth investigations, opinion pieces, reviews, how-to guides, and more”, and said the activity threatens its ability to deliver “trustworthy information, news analysis, and commentary”.

In a statement shared with the Guardian, OpenAI said: “We respect the rights of content creators and owners. Our ongoing conversations with the New York Times have been productive and moving forward constructively, so we are surprised and disappointed with this development.”

Out-Law has asked Microsoft to comment on the NYT’s claims.

Talbot said: “Even though content has been made available on the web, the underlying intellectual property rights will remain, and any use of content made available may be subject to certain conditions. If use has been made outside the scope of permissions, then, unless an exception is available, IP rights may have been infringed.”

“If infringement is proven, and given that the use of training data has been on a mass scale, there is the wider challenge of identifying the level of damages to be awarded to any individual rights holder. Even if training on NYT articles has involved access thousands of times, this may only represent a small proportion of the total data used to train the tool, so the court’s approach here will be of interest,” he said.

The NYT’s lawsuit is the latest in a series of developments that concern AI development and the rights of content creators.

Last year, Getty raised legal proceedings against Stability AI before the High Court in London, alleging infringement of its IP rights. The claims relate to Stability AI’s ‘Stable Diffusion’ system, which automatically generates images. In December 2023, Stability AI failed in a bid to have certain claims that it infringed the IP rights of Getty thrown out before the case goes to trial in the UK.

Also in the UK, the UK government has pushing representatives of the creative industries and those of AI developers to agree a voluntary AI copyright code of practice. The government hopes the code will provide a non-legislative solution to the question of how best to balance the need for AI developers to access quality data on which to train their AI systems with the need for content creators to be adequately compensated for the use of their copyright works. UK AI and IP minister Jonathan Berry has, however, said any UK solution to the issue needs to be “internationally operable”.

In the absence of regulation and industry-wide agreements, some businesses have taken matters into their own hands. For example, publisher Axel Springer agreed a licensing deal with OpenAI late last year that enables the AI developer to train its systems using “quality content from Axel Springer media brands”.

Dennis said: “We have seen a number of copyright owners challenging the use of their works without their permission and The New York Times is the latest organisation to hit back by issuing legal proceedings. It is clear that a regulatory balance between protecting IP rights and encouraging innovation in technology has yet to be found.”

“One hope of achieving this balance is the code of practice due to be published by the UK Intellectual Property Office imminently. Although we don’t yet know what the code will say, it could improve the licensing environment in the AI space, giving developers access to the data they need while also ensuring that IP owners receive financial recompense and recognition for the use of their works,” she said. 

“AI developers once seemed to have the upper hand, but the balance of power does seem to be shifting in favour of content creators, and these latest legal proceedings are further evidence of that. A growing number of content creators are now proactively licensing their works for use as training data. They know that, inevitably, their works are likely to be scraped anyway,” she said.