Content for this Newsletter:
1. New York’s Ban on DeepSeek
2. The Intercept’s Copyright Lawsuit Against OpenAI
3. Thomson Reuters’ Copyright Lawsuit Against Ross
4. Privacy Class Action Lawsuit Against Amazon
5. Elon Musk’s Lawsuit Against OpenAI
6. Copyright Office’s Report on AI and Copyright
- AI Compliance Audit Questionnaire
I have prepared a 7-page AI compliance audit questionnaire. If you’re in-house legal counsel or a senior executive, and even ONE of the following conditions applies to your company, this questionnaire is a must:
- Your employees are using ChatGPT or other generative AI tools for work-related tasks.
- Your company is developing AI tools or systems.
- Your company is deploying AI systems or tools in business operations. (Note: This may not always be obvious, as your vendors might not disclose AI components in their products or services.)
- AI is being used for decision-making processes that affect individuals (e.g., hiring, lending, customer service).
- Your company uses AI for advertising purposes, including content creation, targeting, or campaign optimization.
- Your company uses AI for pricing decisions, market analysis, or other competitive strategies that could potentially impact market competition.
- Your company collects or uses large datasets to train AI models.
- Your AI systems process the personal data of individuals.
- You operate in regulated industries such as healthcare, finance, or education.
- Your AI systems could potentially impact fundamental rights or safety (e.g., facial recognition, autonomous vehicles).
- Your company operates in or sells AI products/services to multiple jurisdictions with different AI regulations.
- Your company is acquiring an AI company.
- You’re using AI systems developed by third-party vendors.
- Your AI systems interact directly with customers or the public.
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Now, let’s move on to the latest developments in AI law.
1. New York’s Ban on DeepSeek
Governor Kathy Hochul has banned the Chinese AI app DeepSeek from New York state government devices due to security concerns. Just last week, a bipartisan bill, the “No DeepSeek on Government Devices Act,” was introduced in Congress by Reps. Josh Gottheimer (D-N.J.) and Darin LaHood (R-Ill.) to ban DeepSeek from all federal government devices, citing national security threats.
While these government actions are a step in the right direction, the question remains: What about businesses using AI? This is a wake-up call for corporate AI governance. The risks of security breaches, privacy violations, IP theft, and regulatory non-compliance become ever more pressing.
2. The Intercept’s Copyright Lawsuit Against OpenAI
The Intercept’s lawsuit against OpenAI, alleging the misuse of its news articles to train ChatGPT, will proceed, while similar lawsuits from Raw Story and AlterNet were dismissed. Judge Rakoff determined that The Intercept plausibly argued harm due to OpenAI’s removal of copyright management information, a key distinction from the other dismissed cases. However, he dismissed The Intercept’s claim of unlawful distribution after the removal. The Intercept’s case against Microsoft, OpenAI’s backer, was also dismissed. This ruling is part of a larger wave of lawsuits against AI companies regarding copyright infringement in training data. The Intercept’s unique claim centers on the Digital Millennium Copyright Act and the removal of copyright information, rather than direct copyright infringement itself. This case is important because it highlights a different angle in the ongoing legal battles surrounding AI and copyright.
3. Thomson Reuters’ Copyright Lawsuit Against Ross
In a significant copyright ruling with implications for AI, the Delaware District Court granted summary judgment to Thomson Reuters against ROSS Intelligence. ROSS, a legal research startup, used AI to analyze legal documents, not to generate new content. The court found ROSS liable for directly infringing Thomson Reuters’ copyrighted headnotes, deeming them original works despite sometimes being verbatim from legal opinions. Crucially, the court rejected ROSS’s fair use defense, emphasizing the commercial nature of ROSS’s product, its direct competition with Westlaw, and the potential harm to Thomson Reuters’ market for licensing its data for AI training. While some fair use factors favored ROSS, the court stressed the greater importance of the factors related to commercial purpose and market impact.
Judge Bibas’s ruling specifically addressed non-generative AI. Developers working with generative AI may have stronger fair use arguments than ROSS because generative AI models create new, original content and can thus argue that their training models on copyrighted material is a transformative use. The courts have yet to rule on the validity of such arguments.
4. Privacy Class Action Lawsuit Against Amazon
Amazon faces a potential class-action lawsuit in Seattle, the first of its kind, alleging the company violated Washington’s My Health My Data Act. The lawsuit claims Amazon’s advertising network, embedded in phone apps, collected consumer health data, including location information, without consent, using it for targeted advertising. This activity is prohibited by the landmark Washington law, designed to protect personal health data, especially in the wake of the Supreme Court’s overturning of Roe v. Wade. The lawsuit alleges Amazon collected data like biometric information and precise location that could indicate attempts to access health services, from users of apps like OfferUp and the Weather Channel app, without their knowledge or consent to share with Amazon. Amazon denies the allegations, stating their agreements with publishers prohibit sharing such data and that they discard any such information received. The lawsuit also alleges violations of other state and federal laws.
5. Elon Musk’s Lawsuit Against OpenAI
A federal judge has indicated that parts of Elon Musk’s lawsuit against OpenAI, challenging its transition to a for-profit entity, are likely to go to trial, with Musk himself required to testify. Judge Rogers expressed skepticism about Musk’s request for a preliminary injunction to halt the conversion, suggesting his team lacked sufficient evidence. Musk, who co-founded OpenAI in 2015 but later left and founded rival xAI, argues that OpenAI’s shift violates its original nonprofit mission focused on benefiting humanity. OpenAI, seeking to secure billions in funding for AI development, claims the for-profit structure is necessary to achieve that mission and has moved to dismiss Musk’s claims. The outcome of the lawsuit has significant implications for OpenAI’s financial future, as its ongoing and potential future fundraising rounds are contingent on the restructuring.
This case could have far-reaching implications for AI governance and ethical oversight in AI development. As AI continues to evolve, so do the legal challenges surrounding it.
6. Copyright Office’s Report on AI and Copyright
The U.S. Copyright Office’s report on AI and copyright doesn’t introduce anything significantly new but consolidates and clarifies existing principles.
a. Existing laws apply – The current copyright framework can address AI-related issues.
b. AI as a tool – Using AI to assist creativity doesn’t negate copyright protection.
c. Human creativity is central – Copyright protects original human expression, even when AI is involved.
d. Purely AI-generated content remains uncopyrightable.
e. Case-by-case analysis – Human contributions to AI-generated works will be evaluated individually.
f. Clarification on prompts – Simply providing prompts isn’t enough for copyright protection.
g. No special rules – The report doesn’t support additional protections for AI-generated content.
In my co-presentation with Michael Dilworth, “Protect Your AI Clients’ Innovations with a Comprehensive Legal Strategy,” a CLE program hosted by Thomson Reuters Westlaw, I addressed some of those key principles.
If you’re interested in learning more, feel free to reach out.
Please feel free to reach out if you need assistance with AI or privacy matters. Learn more about my services and client testimonials at www.lklawfirm.net
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