Microsoft’s Motion to Dismiss AI Copyright Suit Should Be ‘Denied in Full’: N.Y. Times

The defendants’ generative AI models “are nothing like VCRs,” said the memorandum. Sony didn’t copy movies and television shows to build VCRs, it said. But Microsoft and OpenAI “built their AI models by copying millions of Times articles and other copyrighted works without permission or payment,” it said.

A VCR isn’t preloaded with millions of programs that can be played back “if prompted with an opening scene,” said the memorandum. The defendants’ AI models “can display works that were copied to train them with the right prompt,” it said. Sony’s VCRs didn’t generate programming “that competed with original works,” it said.

But Microsoft and OpenAI “are using their AI models to copy and summarize even breaking news articles that users would otherwise seek on a publisher’s website,” said the memorandum. If VCRs had been built “with movies to make movies that compete with movies,” or if Sony oversaw the VCR’s infringing users, the U.S. Supreme Court’s 1984 Betamax decision “would have gone the other way,” it said.

Microsoft also accuses the Times of opposing the progress of technology, likening this lawsuit to an all-out effort by the entertainment industry to stop the VCR, said the memorandum. But it’s entirely possible to comply with copyright law and build generative AI products “in a way that promotes a healthy news ecosystem,” it said.

Microsoft and its “close collaborator” OpenAI “simply chose not to do so,” said the memorandum. Instead, Microsoft, the richest company in the world, “claims that it was entitled to take what it wanted for free,” it said. Calling attention to the “market effects” of that unlawful conduct isn’t “doomsday futurology,” as Microsoft calls it, it said. To the contrary, enforcing copyright protections here will promote a future where both generative AI developers and publishers “can flourish,” it said.

On the merits, Microsoft’s motion “largely duplicates” the arguments made by OpenAI, said the memorandum. It asks the court “to construe disputed issues of fact in its favor” to dismiss the Times’ claims for contributory infringement, Digital Millennium Copyright Act violations and unfair competition by misappropriation, it said: “These arguments each fail.”

Microsoft’s contributory infringement argument would require the court “to make improper factual findings” that Microsoft lacked awareness of infringement and that real-world people don’t actually use GPT-based tools to infringe copyrights, despite the Times’ allegations to the contrary, said the memorandum.

Microsoft’s DMCA argument similarly asks the court to “trust its word” about how real-world people use its products and whether Microsoft should have known its conduct “would conceal or facilitate its infringement,” said the memorandum. Microsoft’s misappropriation argument is based on “unfounded assertions” about whether its generative AI products compete with Times content, “including with regard to its time-sensitive breaking news and product recommendations,” it said.

None of these issues can be resolved in Microsoft’s favor on a motion to dismiss, said the memorandum. Unlike the SCOTUS Betamax decision, which affirmed the verdict in a five-week trial that Sony wasn’t liable for contributory infringement for selling VCRs, “this case is at the pleading stage,” it said.

Microsoft largely tries to “circumvent this reality” by citing summary judgment and post-trial decisions as if the Times “is required to prove its allegations before the parties have taken any discovery,” said the memorandum. It’s not, it said. Microsoft’s motion to dismiss “is premature and should be denied in full,” it said.