A US District Court judge has denied a request by OpenAI to dismiss the long-running lawsuit against it, in the latest chapter of the consolidated class action by The Authors Guild and a group of 17 prominent fiction authors against the generative AI platform provider OpenAI, some of OpenAI’s business units and Microsoft Corporation.
OpenAI moved to dismiss class plaintiffs’ claim of direct copyright infringement, saying that “the complaint fails to plausibly allege substantial similarity between plaintiffs’ works and ChatGPT’s outputs or to cite or attach examples of allegedly infringing outputs.”
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.,’” said the Hon. Sidney H. Stein, US District Judge for this case.
The Opinion by Judge Stein cited multiple examples of infringing ChatGPT outputs which, in the Judge’s Opinion, contained both copyrightable and non-copyrightable elements; but also that both ‘discerning’ and ‘ordinary’ observers “would conclude that the allegedly infringing outputs are substantially similar to plaintiffs’ copyrighted works.”
“The Consolidated Class Action Complaint adequately states a prima facie claim of copyright infringement based on ChatGPT’s outputs. Nothing in this Opinion is intended to suggest a view on whether the allegedly infringing outputs are protected as fair uses of the original works.
“OpenAI’s motion to dismiss the Consolidated Class Action Complaint’s output-based infringement claim is therefore denied,” said Judge Stein.
Why the lawsuit?
The lawsuit contended that “OpenAI and Microsoft have built a business valued into the hundreds of billions of dollars by taking the combined works of humanity without permission,” and “(feeding) them into their “large language models” or “LLMs,” algorithms designed to generate human-like text responses to users’ prompts and queries.”
“Rather than pay for intellectual property, they knowingly ignored the laws protecting copyright,” said the Complaint (linked below). “…at the heart of these algorithms is systematic theft on a mass scale.” OpenAI’s 2023 revenue was reported at $1.3 billion, while analysts estimated that ChatGPT’s integration into Microsoft CoPilot and other Microsoft offerings were “already generating more than $100 million in annual recurring revenue.”
OpenAi and Microsoft “could have paid a reasonable licensing fee to use copyrighted works,” said the writers, but instead, “copied and data-mined the works…without permission or compensation.”
Overall, the Class acting as the Plaintiff in the lawsuit consists of more than one hundred thousand authors and copyright holders, according to the Consolidated Class Action Complaint filed June 13, 2025 (linked below)
Why it matters
“This suit highlights the particularly egregious harm to the fiction market. For fiction writers, OpenAI’s unauthorized use of their work is identity theft on a grand scale. Fiction authors create entirely new worlds from their imaginations—they create the places, the people, and the events in their stories,” said Authors Guild CEO Mary Rasenberger, in a prepared statement by The Authors Guild when the Complaint was filed.
“People are already distributing content generated by versions of GPT that mimic or use original authors’ characters and stories. Companies are selling prompts that allow you to ‘enter the world’ of an author’s books. These are clear infringements upon the intellectual property rights of the original creators,” she said.
Further reading
Consolidated Class Action Complaint. David Baldacci (et al), The Authors Guild, Belfry Holdings Inc, Columbus Rose Ltd, Daring Greatly Corporation, Gappopardo LLC, Hieronymus Inc, Sylvia Day LLC, WO & Shade LLC, Plaintiffs, v. OpenAI Inc (and business units). Document 183. Case 1:25-md-03143-SHS-OTW. Filed June 13, 2025. US District Court, Southern District of New York
Class Action Complaint. Authors Guild (et al), Plaintiffs, v. OpenAI Inc. (and business units), and Microsoft Corporation. Document 39. Filed December 4, 2023. Case 1:23-cv-08292-SHS. US District Court, Southern District of New York
The Authors Guild, John Grisham, Jodi Picoult, David Baldacci, George R.R. Martin, and 13 other authors file class-action suit against OpenAI. Press release. September 20, 2023. The Authors Guild
