As discussed in our earlier post, Microsoft opened its motion to dismiss portions of the New York Times's OpenAI case pled against it with an extended analogy to the Betamax case. It argued that the Times was acting like the Motion Picture Association of America in crying wolf over the death of its industry in light of the development of a new technology.[1] But no analogy is perfect, and the Times opened its opposition to the motion to dismiss by noting the distinctions between an LLM and a VCR.

The Times's opposition starts with an unambiguous distinction shot across the bow based on the evidence that was cited in the complaint, citing the Betamax case in support of the proposition that "A VCR is not preloaded with millions of programs that can be played back if prompted with an opening scene" while "Defendants' AI models can display works that were copied to train them with the right prompt." It then notes that VCRs do not generate programming that competes with movies, but ChatGPT returns results that copy and summarize the Times's works (that it asserts users would otherwise obtain from the Times itself). So the Times concludes, "If VCRs had been built with movies to make movies that compete with movies, or if Sony oversaw the VCR's infringing users, [the Betamax case] would have gone the other way."

The Times then answers Microsoft's accusation that it is standing in the way of technological progress. The Times offers a solution that is easy to describe, if not to execute: just teach the LLM on non-copyrighted works. And it drops a PR bomb of its own in doing so, saying rather than doing so, "Microsoft—the richest company in the world—claims that it was entitled to take what it wanted for free." Turning Microsoft's rhetoric back on itself, the Times argues that respecting copyright and building an LLM without infringing "will promote a future where both GenAI developers and publishers can flourish."[2]

If nothing else, the introduction serves as a valuable reminder to litigators to consider what the other side might do with an analogy you offer. Microsoft built the logic and righteousness of its case on an analogy, but appears not to have thought about how the analogy could be turned on its head to rebut its own position. In the end, the judge is likely to focus on the facts of ChatGPT -- not the analogy to a VCR -- and ignore the rhetorical fireworks back and forth.

When it gets to the legal arguments, the Times notes that the issues are almost identical to those raised by OpenAI (save for OpenAI's limitations argument, which Microsoft did not raise), and the Times response is essentially the same. One difference between the Times's two responses, however, is that the Times repeatedly argued that OpenAI's case citations were inappropriate, whereas it argues that Microsoft may be correct but they relate to later stages of the case, whether on summary judgment or post-trial. The basic argument is still the same: the Times should be permitted to take discovery to support its claims, not cut off on a motion to dismiss.

First, the Times starts its argument against Microsoft's attempt to obtain dismissal of the contributory copyright infringement count by noting that six of the eight cases Microsoft relies on were decided later in the case. The Times then notes that it pled averments of the elements of the claim disputed by Microsoft; while it did not cite evidence, that is generally not required in federal court pleadings. As with its response to the OpenAI motion to dismiss, the Times does go beyond the pleadings to cite articles that would support the averments of the complaint, but the judge is not likely to require amendment of the complaint to show proof of the plausibility of the factual allegations. Furthermore, in a situation like this where most (if not all) of the evidence of is in a defendant's hands -- especially evidence of intent -- a judge would be loathe to allow that defendant to prevail without permitting the plaintiff to investigate through discovery.

Second, the Times repeats basically the same arguments about violations of the Digital Millennium Copyright Act as it raised against OpenAI. While Microsoft (and OpenAI) focuses on how removal of copyright management information does not facilitate third-party infringement, the Times argues the stripping of CMI during training of the LLM and synthetic search retrieval conceals Microsoft's (and OpenAI's) own infringement. That is, the Times argues Microsoft seeks to focus on the wrong actor and act of infringement for the DMCA violations and that Microsoft's own knowledge of those violations is where the judge should look. Again, the Times argues it has pled Microsoft's knowledge and should be allowed to take discovery to support its allegations. As with the contributory copyright infringement claim, the court is likely to allow it to do so.

Finally, the Times addresses its "hot news" state law misappropriation claim by basically focusing on the fact that its pleadings are sufficient, not on whether it will ultimately prevail. It provides scant argument or details beyond a recitation of the allegations of the complaint and notation that Microsoft relies on cases decided at later stages of the case. Again, as we suggested in our discussion of OpenAI's motion to dismiss, the Times's misappropriation claim is likely to survive the Microsoft motion to dismiss, but may not survive summary judgment.

[1] The first sentence of Microsoft's brief reads, "'The VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone,' warned Jack Valenti, then head of the Motion Picture Association of America, in his 1982 testimony to the House of Representatives."

[2] The Times cites Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508 (2023) and A&M Recs., Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) as support for its argument. Neither case is really on point, which Microsoft likely will point out in its reply.

For additional information regarding this topic, please see:

• "The New York Times Calls Out OpenAI on Its Motion to Dismiss," March 18, 2024
• "Microsoft's Motion to Dismiss NY Times Lawsuit over ChatGPT: How is ChatGPT Like a VCR?" March 7, 2024
• "OpenAI's Motion to Dismiss NY Times Lawsuit over ChatGPT: Do They Want to Win or Influence Public Opinion?" March 5, 2024
• "The New York Times Case against OpenAI is Different. Here's Why." February 19, 2024
• "An Analogy for the Current Wave of AI Copyright Lawsuits," November 12, 2023

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