Federal Judge Issues Mixed Ruling on Copyright Claims Against Microsoft and OpenAI

In a pivotal decision on Wednesday, a federal judge in the Southern District of New York issued a mixed ruling in three high-profile copyright lawsuits involving Microsoft Corporation and OpenAI. The court allowed several key claims to advance while dismissing others, reflecting the growing legal tensions surrounding artificial intelligence and copyrighted content.

U.S. District Judge Sidney H. Stein ruled that contributory copyright infringement claims and trademark dilution allegations against the tech companies could proceed. However, he dismissed several Digital Millennium Copyright Act (DMCA) claims and state law complaints, either with or without prejudice, depending on the specifics.

The lawsuits, brought by The New York Times, Daily News LP, and The Center for Investigative Reporting (CIR), allege that Microsoft and OpenAI unlawfully used copyrighted materials to train their AI systems, including ChatGPT.

Key Rulings

Claims Advancing to Trial:
Judge Stein denied OpenAI’s motion to dismiss direct copyright infringement claims from 2019 and 2020, stating that they were not barred by the statute of limitations. Additionally, contributory infringement claims against both Microsoft and OpenAI, as well as federal and state trademark dilution claims in the Daily News case, were allowed to proceed.
Dismissed Claims:
The court dismissed with prejudice all common law unfair competition claims and “abridgment” claims in the CIR lawsuit, preventing them from being refiled. Certain DMCA claims were dismissed without prejudice, leaving room for plaintiffs to amend and refile. Specifically, DMCA §1202(b)(1) claims were dismissed against Microsoft in all three cases and against OpenAI in the Times lawsuit.

Next Steps

Judge Stein indicated that a detailed opinion outlining the rationale for the rulings would be released soon. Several motions across the cases were closed, including filings in The New York Times Co. v. Microsoft (23-cv-11195), Daily News LP v. Microsoft (24-cv-3285), and CIR v. OpenAI (24-cv-4872).

These lawsuits, initiated in late 2023 and 2024, are part of a broader wave of legal actions targeting AI companies’ use of copyrighted content. The plaintiffs allege that Microsoft and OpenAI’s AI models were trained on proprietary news articles and investigative reports without proper authorization or compensation.

Wednesday’s ruling paves the way for further litigation, with the surviving claims moving into the discovery phase. Both Microsoft and OpenAI have yet to comment on the decision.