Judge lets most of NYT's copyright suit against OpenAI and Microsoft proceed

Judge Sidney Stein largely denied OpenAI and Microsoft’s motion to dismiss The New York Times’ copyright suit, the first substantive ruling in the case since it was filed in December 2023 and now folded into the consolidated New York MDL. The core direct and contributory infringement claims survived, as did a trademark dilution claim brought by the Daily News. Stein found the Times had plausibly alleged infringing outputs and third-party misuse widely publicised enough to support a contributory-infringement theory, and rejected OpenAI’s argument that the claims were time-barred.

Some claims did not survive: common-law unfair competition and misappropriation claims were dismissed with prejudice, as was a separate “abridgment” claim brought by the Center for Investigative Reporting, and most of the DMCA claims under section 1202(b) were dismissed without prejudice, meaning plaintiffs could refile them with better-pleaded facts. Crucially, Stein declined to resolve OpenAI’s fair-use defence at the motion-to-dismiss stage, holding that the fact-intensive question of whether training on copyrighted articles was transformative could not be settled without discovery.

The ruling meant the case would proceed into discovery covering OpenAI’s training data and practices, rather than being resolved on the pleadings — an outcome publishers and authors treated as a win, since an early dismissal on fair-use grounds had been OpenAI’s strongest path to ending the litigation quickly. It set the template other courts in the MDL would draw on for parallel motions from the other consolidated plaintiffs.