New York Times Sues Perplexity AI for Copyright Infringement

The New York Times Initiates Copyright Infringement Suit Against Perplexity

On Friday, The New York Times initiated legal action against the AI search company Perplexity, alleging copyright infringement. This marks the second such lawsuit filed by The Times against an artificial intelligence firm.

Joining a Growing Trend of Legal Challenges

The Times’ action follows a similar suit brought by the Chicago Tribune earlier this week, as several media organizations are now pursuing legal recourse against Perplexity.

Core of the Claim: Unlicensed Content Usage

The lawsuit asserts that Perplexity delivers products to users that effectively act as substitutes for the original content provided by The Times, all without obtaining the necessary permissions or providing any form of compensation.

Strategic Use of Litigation in AI Negotiations

This legal maneuver is part of a broader, ongoing strategy employed by publishers. Recognizing the inevitability of the advancement of AI, these organizations are leveraging lawsuits to gain negotiating power.

The aim is to compel AI companies to establish formal licensing agreements that appropriately compensate content creators and ensure the continued economic viability of original journalism.

Perplexity's Attempts at Addressing Compensation Concerns

Last year, Perplexity introduced a Publishers’ Program in an effort to address demands for compensation. This program offers participating news outlets, including Gannett, TIME, Fortune, and the Los Angeles Times, a portion of the generated ad revenue.

Furthermore, in August, Perplexity launched Comet Plus, allocating 80% of its $5 monthly subscription fee to participating publishers. A recent multi-year licensing agreement was also established with Getty Images.

The Times' Firm Stance on Unlicensed Use

Graham James, a spokesperson for The Times, stated the organization’s firm objection to Perplexity’s unauthorized utilization of its content for product development and promotion.

“We will continue to hold accountable companies that fail to recognize the value of our journalistic work,” James affirmed.

RAG Technology at the Center of the Dispute

The Times’ lawsuit mirrors the concerns raised by the Tribune, focusing on Perplexity’s methodology for responding to user inquiries.

This involves gathering information from websites and databases to generate responses through its retrieval-augmented generation (RAG) products, such as its chatbots and Comet browser AI assistant.

Repackaging and Reproduction of Copyrighted Material

According to the suit, Perplexity subsequently repackages the original content into written responses for users.

These responses frequently consist of verbatim or near-verbatim reproductions, summaries, or abridgments of the original material, including copyrighted works belonging to The Times.

Concerns Over Paywall Circumvention

James highlighted that RAG technology enables Perplexity to bypass The Times’ paywall and deliver content to its customers in real-time.

He emphasized that this content should remain exclusively accessible to paying subscribers.

Brand Damage Through Hallucinations and Misattribution

The Times also alleges that Perplexity’s search engine has generated inaccurate information and falsely attributed it to the outlet, thereby causing damage to its brand reputation.

Perplexity's Response and Historical Context

Jesse Dwyer, Perplexity’s head of communications, noted that publishers have historically pursued legal action against new technologies, including radio, television, the internet, and social media.

Dwyer expressed optimism that, like previous cases, this lawsuit would ultimately prove unsuccessful.

Prior Attempts at Resolution

The lawsuit follows a cease and desist letter sent by The Times to Perplexity over a year ago, demanding that the company cease using its content for summaries and other outputs.

The outlet claims to have contacted Perplexity multiple times over the past 18 months, seeking a resolution through negotiation or an agreement.

Ongoing Legal Battle with OpenAI

This is not The Times’ first legal confrontation with an AI company. The Times is also currently suing OpenAI and Microsoft, alleging that the two companies trained their AI systems using millions of the outlet’s articles without providing any compensation.

OpenAI has countered by arguing that its use of publicly available data for AI training constitutes “fair use,” and has even accused The Times of manipulating ChatGPT to generate evidence.

Precedent-Setting Case with Anthropic

A similar lawsuit against OpenAI competitor Anthropic could establish a precedent regarding fair use in the context of training AI systems.

In that case, the court ruled that while lawfully acquired books may represent a safe fair use application, the use of pirated books infringes on copyrights. Anthropic subsequently agreed to a $1.5 billion settlement.

Expanding Legal Pressure on Perplexity

The Times’ lawsuit adds to the growing legal pressure on Perplexity, which previously faced similar claims from News Corp, Encyclopedia Britannica, Merriam-Webster, Nikkei, Asahi Shimbun, and Reddit.

Allegations of Plagiarism and Unethical Scraping

Outlets like Wired and Forbes have accused Perplexity of plagiarism and unethically crawling and scraping content from websites that explicitly prohibit such practices.

Internet infrastructure provider Cloudflare recently confirmed the latter claim.

The Times' Demands in the Lawsuit

The Times is seeking financial compensation for the alleged harm caused by Perplexity and a permanent injunction prohibiting the startup from continuing to use its content.

Willingness to Collaborate with Compensating AI Firms

The Times has demonstrated a willingness to collaborate with AI firms that provide fair compensation for its reporters’ work.

Earlier this year, the outlet entered into a multi-year licensing agreement with Amazon to utilize its content for training the tech giant’s AI models.

Numerous other publishers and media companies have also established licensing agreements with AI firms for content training and inclusion in chatbot responses. OpenAI has secured deals with Associated Press, Axel Springer, Vox Media, The Atlantic, and others.

This article has been updated with comment from Perplexity.