OpenAI loses appeal to dismiss major copyright lawsuit by Toronto Star, other media - Toronto Star

A coalition of media organizations, including the Toronto Star, alleges OpenAI illegally used news articles to train its generative AI software ChatGPT.

The court dismissed the tech giant’s argument that its lack of a physical presence in Ontario means the lawsuit should be heard in the United States. 

A lawsuit brought by Canadian news organizations against OpenAI can move forward in Ontario, the province’s top court ruled Friday, dismissing the tech giant’s argument that its lack of a physical presence in Ontario means the lawsuit should be heard in the United States. 

The copyright lawsuit, filed by a coalition of media organizations including the Toronto Star, alleges the tech giant illegally used news articles to train its generative AI software ChatGPT and is now profiting unjustly.

California-based OpenAI had been looking to overturn a decision made last year by Superior Court Justice Jessica Kimmel, who concluded that the case was “sufficiently connected to Ontario” with three OpenAI-affiliated companies named in the lawsuit — OpenAI OpCo, LLC, OpenAI, LLC, and OpenAI, Inc. — being identified as doing business in the province.

Writing for a unanimous three-judge appeal panel, Justice Bradley Miller said Kimmel did not err in her findings, including that at least some of the affiliated companies “either made contractual arrangements in Ontario, advertised to users including in Ontario, or licensed their tools to customers either directly or through third parties.”

In other words, Miller wrote, the lower-court judge had found multiple instances of the companies carrying on business in Ontario.

The companies relied “heavily” on the argument that they didn’t have a physical presence in Ontario, Miller noted, but he said the case law cited by the appellants didn’t support their argument. He said Kimmel was not wrong to find that “there was a good arguable case that the appellants carried on business in Ontario for the context of assumed jurisdiction, even without a physical presence.” 

“This decision matters well beyond the news media industry,” said lawyer Sana Halwani of the firm of Lenczner Slaght LLP, which represented the news media organizations. “Digital businesses earn money from Canadian content and users, and their activity reaches into Canada. When disputes arise, they must answer to Canadian law in Canadian courts.”

The media companies welcome technological innovations; however, all participants must follow the law, Lenczner Slaght LLP said in a written statement.

“Canadian journalism is created by Canadians, for Canadians, at significant cost. We look forward to having our clients’ claims decided on their merits by a Canadian court,” the firm said.