Opinion Issued on Motions to Dismiss for the NYT Copyright Consolidated Case Group

Issue 25 

On April 4, 2025, the Hon. Sidney H. Stein issued an opinion on Microsoft Corporation’s and the OpenAI defendants’ motions to dismiss in the New York Times consolidated case group consisting of the following cases: The New York Times Company v. Microsoft Corporation et al., Daily News, LP et al. v. Microsoft Corporation et al., and The Center for Investigative Reporting, Inc. v. OpenAI, Inc. et al.[i]  

Notably, the motions to dismiss did not seek complete dismissal of the plaintiffs’ direct copyright infringement claims. As described in greater detail below, two motions (motions in relation to conduct occurring more than three years before complaints were filed and abridgement) sought partial dismissal of plaintiffs’ direct copyright infringement claims, in addition to motions that sought dismissal of other claims. 

The following is a brief summary of the rulings in the Court’s 43-page opinion, which can be found at docket entry 514 in the New York Times case. 

Motions to Dismiss Denied re Direct Infringement Claims Involving Conduct Occurring More than Three Years Before Complaints Were Filed 

The Court denied OpenAI’s motions to dismiss the copyright infringement claims arising more than three years before the New York Times and Daily News filed their complaints.[ii] The opinion explained that because the statute of limitations is an affirmative defense, OpenAI has the burden of establishing that plaintiffs should have been aware of the alleged infringement three years before filing their respective complaints.[iii] The Court found that while discovery may reveal facts supporting this affirmative defense, OpenAI has not yet met its burden of establishing plaintiffs’ actual or constructive knowledge.[iv]  

Motions to Dismiss Denied re Contributory Copyright Infringement Claims 

The Court explained that the plaintiffs brought contributory copyright infringement claims against the defendants in the alternative to direct infringement claims to the extent that end users rather than the defendants are found liable for direct infringement due to generating infringing outputs with defendant’s large language models.[v] The Court described a split among the Circuit Courts in relation to the scienter necessary to support a claim for contributory copyright infringement in the absence of actual knowledge of third-party infringement, confirming that the standard of the U.S. Court of Appeals for the Second Circuit is whether defendants objectively knew or had reason to know.[vi] The Court found that plaintiffs had plausibly alleged this element of the claim.[vii]  

Motions to Dismiss Denied re Federal and State Trademark Dilution Claims in Daily News Action 

The Court denied the motions to dismiss the Daily News claims for federal and state trademark dilution, finding that the Daily News allegations of federal trademark dilution, “which include detailed, factual descriptions of the nature and scope of the Diluted Trademarks’ widespread circulation, recognition, achievements, and consumer subscriptions,” adequately pled that the diluted trademarks were “famous” within the meaning of the statute.[viii] Further, the Court determined that the state claim should not be dismissed as Microsoft has not shown that N.Y. Gen. Bus. Law § 360-l violates the Dormant Commerce Clause or is otherwise subject to invalidation.[ix]   

Motions to Dismiss Granted re Common Law Unfair Competition by Misappropriation 

The Court explained that section 301 of the Copyright Act preempts most common law misappropriation claims involving copyrighted works, and ruled that plaintiffs’ common law misappropriation claims did not qualify for an exception to preemption.[x] Accordingly, the Court granted defendants’ motion to dismiss the common law unfair competition by misappropriation claims with prejudice.[xi]  

Motion to Dismiss Granted re Abridgement Claims in the Center for Investigative Reporting Complaint 

The Center for Investigative Reporting complaint distinguishes between “regurgitations” of its works and “abridgements” of those works, with abridgements referring to outputs that are detailed summaries of articles, such as bulleted lists of points.[xii] OpenAI moved to dismiss the Center for Investigative Reporting’s direct infringement claim to the extent it relates to alleged abridgements.[xiii] The Court explained that to establish copyright infringement, a plaintiff must show 1) that a defendant has actually copied plaintiff’s work, and 2) there is a substantial similarity between defendant’s work and the elements of plaintiff’s work that are subject to protection.[xiv] The Court granted OpenAI’s motion to dismiss with prejudice as related to the alleged abridgements, finding that the alleged abridgements were not substantially similar to the original articles as a matter of law, as they differed in style, length, tone, and sentence structure.[xv]  

Motions to Dismiss Granted in Part re DMCA Claims 

The final rulings of the opinion were in relation to plaintiffs’ Digital Millennium Copyright Act (“DMCA”) claims. The Court found that the plaintiffs had Article III standing and statutory standing to bring DMCA claims.[xvi] The Court explained generally in relation to the DMCA claims, 

Plaintiffs in each action bring two claims under the Digital Millennium Copyright Act (“DMCA”) against Microsoft and OpenAI. The first claim is brought pursuant to 17 U.S.C. § 1202(b)(1), which prohibits “intentionally remov[ing] or alter[ing] any copyright management information” (“CMI”). The second claim is brought pursuant to 17 U.S.C. § 1202(b)(3), which prohibits the “distribution” of “works” or “copies of works . . . knowing that [CMI] has been removed or altered without authority of the copyright owner.” In both provisions, the defendant must also have “know[n]” or “ha[d] reasonable grounds to know” that its conduct would “induce, enable, facilitate, or conceal an infringement.” 17 U.S.C. § 1202(b). Section 1202(b) claims therefore contain a “double-scienter” requirement: the defendant must (1) “intentionally” remove CMI under section 1202(b)(1) or distribute copyrighted works “knowing” that CMI was removed under section 1202(b)(3); and (2) know or have reason to know that its conduct would induce, enable, facilitate, or conceal infringement. See Mango v. Buzzfeed, Inc., 970 F.3d 167, 171 (2d Cir. 2020). (Internal footnote omitted).[xvii] 

17 U.S.C. § 1202(b)(1) Claims 

The Court granted Microsoft’s motion to dismiss the section 1202(b)(1) claims against it in all three actions, finding that all of the complaints lacked factual specificity to support their 1202(b)(1) claims against Microsoft.[xviii] Additionally, the Court granted OpenAI’s motion to dismiss the 1202(b)(1) claim filed by the New York Times, finding the New York Time’s claim lacked detail in relation to CMI removal and was too conclusory.[xix] These claims were dismissed without prejudice.[xx] 

However, the Court denied OpenAI’s motion to dismiss the section 1202(b)(1) claims filed by the Daily News and Center for Investigative Reporting, finding that the complaints both plausibly alleged 1) CMI removal during the process of training large language models, and 2) that OpenAI knew or had reason to know that CMI removal would “induce, enable, facilitate, or conceal copyright infringement.”[xxi]  

17 U.S.C. § 1202(b)(3) Claims 

The Court granted OpenAI’s and Microsoft’s motions to dismiss plaintiffs’ section 1202(b)(3) claims without prejudice.[xxii] The Court found that the New York Times and Daily News failed to adequately allege that the defendants distributed copies of their works, because defendants’ outputs were excerpts of the works rather than copies.[xxiii] Additionally, the Court ruled that the Center for Investigative Reporting failed to plausibly allege distribution of plaintiff’s works or copies of the works under the statute.[xxiv]  

That's a wrap on the long-awaited New York Times consolidated case group opinion/order on motions to dismiss. Next week I'll have a roundup of other AI-related case news to share with you.

Thanks for being here. 

Jennifer Ballard
Good Journey Consulting

P.S. Have you considered whether your clients may have AI-related claims or liabilities? There are over 60 AI-related lawsuits I’m tracking in areas including copyright infringement, copyright and patent applications, privacy, discrimination, facial recognition, healthcare, libel, lie detection, wiretapping, FOIA, malware, school suspensions, deepfakes, wire fraud, wrongful death, and antitrust. You can find summaries of all of these cases in Chapter 4 of A Lawyer’s Practical Guide to AI. 

[i] Opinion, The New York Times Company v. Microsoft Corporation et al., No. 1:23-cv-11195 (S.D.N.Y. filed December 27, 2023), Daily News, LP et al. v. Microsoft Corporation et al., No. 1:24-cv-03285 (S.D.N.Y. filed Apr. 30, 2024), and The Center for Investigative Reporting, Inc. v. OpenAI, Inc. et al., No. 1:24-cv-04872 (S.D.N.Y. filed Jun. 27, 2024). 

[ii] Id. at 11. 

[iii] Id. 

[iv] Id. at 12-13. 

[v] Id. at 13. 

[vi] Id. at 14. 

[vii] Id. at 15-16. 

[viii] Id. at 37. 

[ix] Id. at 39-40. 

[x] Id. at 32, 34. 

[xi] Id. at 4, 35. 

[xii] Id. at 40. 

[xiii] Id. 

[xiv] Id. at 42. 

[xv] Id. at 4, 42. 

[xvi] Id. at 21-24. 

[xvii] Id. at 19. 

[xviii] Id. at 27. 

[xix] Id. at 25. 

[xx] Id. at 4. 

[xxi] Id. at 25-27. 

[xxii] Id. at 4, 28. 

[xxiii] Id. at 29. 

[xxiv] Id. at 29-31.