Judge tosses authors’ unfair competition claim against OpenAI

SAN FRANCISCO (CN) — A federal judge in California Tuesday tossed an unfair competition claim brought by book authors, including comedian Sarah Silverman, against OpenAI.

“The UCL claim does not lack factual allegations; it lacks a tenable legal theory,” U.S. District Judge Martinez-Olguin wrote in her order responding to OpenAI's motion to dismiss the claim.

In their original class action complaint, the authors sued OpenAI for various copyright infringement claims, unjust enrichment, negligence, and unfair competition. The court dismissed most of the claims, but allowed the plaintiffs to file an amended complaint, in which they brought direct copyright infringement and unfair competition claims against the creator of ChatGPT.

The authors say they did not consent to have their books used as training material for ChatGPT.

"Defendants, by and through the use of ChatGPT, benefit commercially and profit significantly from the use of Plaintiffs’ and Class members’ copyrighted materials," the plaintiffs say in their First Amended Complaint.

The plaintiffs represent a class of anyone or any entity in the U.S. that own a U.S. copyright to any work used as training data for OpenAI beginning in June 2020.

OpenAI asked the court to dismiss the unfair competition claim, arguing it was preempted. In her five-page order, Martinez-Olguin agreed, saying that the Copyright Act expressly preempts state law claims that fall within the the subject matter of copyright.

The plaintiffs did not properly claim that the unfair competition is based on OpenAI having created a commercial product “making available a source of content generation that distorts the legal marketplace in which Plaintiffs and Class members compete,” Martinez-Olguin said. She added that the plaintiffs only described some harms arising from the unauthorized use of their copyrighted books.

The judge added that the plaintiffs’ unfair competition claim is "qualitatively" the same as their direct copyright infringement claim.

“Even though the elements of the UCL claim are not identical to the copyright claim, ‘the underlying nature’ of Plaintiffs’ UCL claim is ‘part and parcel of [the] copyright claim,’” Martinez-Olguin said.

Attorneys for both sides did not immediately respond to requests for comment Tuesday evening. 

The parties are set to return to court for a settlement conference on Sept. 13.

Follow @nhanson_reports

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