Key Points 

• Canadian news publishers have sued OpenAI in the Toronto Superior Court of Justice for copyright infringement 

  
  

• It has been reported that three French trade groups have accused Meta of copyright infringement  

  
  

• Copyright and AI cases are increasing, and stress the need to balance the rights of creators with those of large tech companies 

On November 28, 2024, Canadian news publishers including Toronto Star Newspapers Limited, Metroland Media Group Ltd., Postmedia Network Inc., PNI Maritimes LP, The Globe and Mail Inc./Publications Globe and Mail Inc., Canadian Press Enterprises Inc./Enterprises Presse Canadienne Inc., and Canadian Broadcasting Corporation/Société Radio-Canada (Publishers) sued OpenAI and related companies (OpenAI) in the Toronto Superior Court of Justice. 

What was the lawsuit against OpenAI about? 

The Publishers argued that OpenAI infringed, authorized, or induced copyright infringement of their copyrights, contrary to the Copyright Act (Act). In addition, they argued that OpenAI engaged in circumvention of technological protection measures that prevented access and restricted the copying of their copyrighted works. The Publishers also argued that OpenAI breached their Terms of Use of their websites and unjustly enriched itself at the expense of the Publishers. 

To that end, the Publishers requested that the court issue Orders for damages or statutory damages, damages and an accounting and disgorgement of profits in respect of OpenAI’s breach of contract and unjust enrichment, and punitive and/or exemplary damages for OpenAI’s wilful and knowing infringement of the Publishers’ rights. What’s more, they asked for a permanent injunction stopping the infringement and a further “wide injunction” that would stop OpenAI from circumventing technological protection measures. They also asked for costs and interest. 

The Publishers began their Claim by pointing out that OpenAI engaged in ongoing, deliberate, and unauthorized misappropriation of their valuable news media works. They also noted that OpenAI scraped content from their websites, web-based applications, and third-party partner websites, and then, it used that proprietary content to develop its ChatGPT models, without consent or authorization. OpenAI also augments its models on an ongoing basis by accessing, copying, and/or scraping their content in response to user prompts: 

“OpenAI has taken large swaths of valuable work, indiscriminately and without regard for copyright protection or the contractual Terms of Use applicable to the misappropriated content”   

The Publishers even went so far as to say that OpenAI was aware of the value of the Publishers’ proprietary data and intellectual property, including the significant financial investments made to acquire the rights to publish the works, and of the need to both pay for that information and secure the express authorization of the Publishers before obtaining and using it for its own purposes. They said that ather than seek to obtain the information legally, OpenAI elected to “brazenly misappropriate” the Publishers’ valuable intellectual property and convert it for its own uses, including commercial uses, without consent or consideration. 

More specifically, the Publishers provided a chart with the number of works, owned works, and licensed works that each of the Publishers had. Owned works were ones that were either owned or exclusively licensed by one of the Publishers, and licensed works were ones that were published by the Publishers under a non-exclusive licence and with the permission of the copyright owner. Each of the Publishers had published hundreds of thousands, if not millions, of owned works across their websites, as well as hundreds of thousands of licensed works—all of which had copyright protection. 

Most concerning, the Publishers alleged that OpenAI developed its GPT models, by generating a data set comprised of copious amounts of text data (Training Data), which the model then analyzed to learn to generate coherent and natural-sounding text without the need for explicit supervision. Worse, they say that a significant proportion of the Training Data that was used to train the GPT models was obtained by OpenAI using a process called “scraping”, which involved programmatically visiting websites across the entirety of the Internet, locating the desired information, and extracting or copying it in a structured format for further use or analysis. In fact, they claimed that their copyrighted works were scraped and/or copied one or more times. 

Even though OpenAI generated billions of dollars in annual revenue (As of October 2024, OpenAI was valued at $157 billion), the Publishers said that they were not paid any form of consideration in exchange for their works. 

We shall see what transpires in this case—at this point, OpenAI has not filed its Statement of Defence.  

However, if one may take a guess, one might expect OpenAI to launch a defence of fair dealing pursuant to sections 29–29.4 of the Act. This is similar to fair use in the United States. To clarify, some things do not constitute copyright infringement; for instance, section 29 states that fair dealing for the purpose of research, private study, education, parody, or satire does not infringe copyright.  

Furthermore, other exceptions and related criteria involve the following: section 29.1 (fair dealing and criticism or review); section 29.2 (fair dealing and news reporting); section 29.21 (non-commercial user-generated content); section 29.22 (reproduction for private purposes); section 29.23 (fixing signals and recording programs); section 29.24 (backup copies); section 29.3 (acts undertaken without motive of gain); and section 29.4 (educational institutions).  

In this case, it is likely that OpenAI will run into problematic issues if it tries to use this defence because OpenAI is currently a for-profit entity with only commercial interests in mind. That is, many of the fair dealing exceptions simply do not apply in this case. On the other hand, if OpenAI were a not-for-profit entity attempting to conduct research, perhaps this would be a different situation; however, there is no doubt that OpenAI is making billions of dollars and using the Publishers’ works to do so. 

News of another copyright infringement case involving AI in France 

There have been several similar intellectual property lawsuits against AI companies, including one that I just wrote about where Cohere was sued by news publishers in the United States and Canada. In that article, I also referred to another case involving Thomson Reuters in the United States. 

And if that were not enough, we recently discovered that French publishers and authors are suing Meta in Paris, in the Third Chamber of the Paris Judicial Court, and accusing it of using their works without permission to train its AI model, LLaMA. In fact, it has been reported that three trade groups (the National Publishing Union that represents book publishers, the National Union of Authors and Composers that represents playrights and composers, and the Societe des Gens de Lettres that represents authors) have accused Meta of copyright infringement and asserted that the company has not obtained authorization to use their copyrighted works to train its AI model. They demand that Meta completely remove its data directories that were created through the alleged infringements. 

Interestingly, this will be the first copyright and AI case to be tried pursuant to the EU’s AI Act.  We shall see what transpires in this case, as it will likely influence the direction of all future cases in the EU and beyond. I say this because the AI Act is referred to as the golden standard since it was the first regulation that dealt with AI. And there is no doubt that this Act requires compliance with EU copyright law. 

What can we take from these developments? 

As we can see from the above discussion, there is a growing number of accusations of copyright infringement where creators have been pitted against large, rich tech companies. Indeed, legal fights are increasingly highlighting the tension between traditional intellectual property protections and what large tech companies are referring to as the need for barrier-free innovation. 

In Canada, we are currently without an AI statute. In the United States, Biden’s Executive Order has been rescinded by President Trump, and it is not likely that there will be any further AI regulation at the federal level. That said, there are a few States that have recently enacted AI legislation: California, Colorado, Utah, and Virginia (passed but not yet signed into law). 

It appears that we are not in a place where Canada and most of the United States have committed to AI transparency with respect to training AI models and the data sources used. In the meantime, while there is hardly any AI legislation, a strong message is being sent to creators—the government is not interested in balancing the interests of creators with large AI companies—it is simply not a priority to do so via strong legislation. In fact, an argument could be made that Trump has sent the exact opposite message by rescinding Biden’s AI Executive Order. 

Economically speaking, one may argue that the lack of lawmaking and policymaking in this area in Canada and the United States could deter creators from producing novel creative works. It may even negatively impact creative markets in the long term. As creators begin to recognize that there is a lack of balance between fair compensation for creators and allowing innovation for tech companies, governments may need to respond by adapting existing copyright legislation and/or inserting new provisions in AI legislation that address these issues. 

What we can say for sure is, the AI and copyright debate remains unsettled at this time.