U.S. Court Partly Dismissed GitHub, Microsoft, OpenAI Bulk of Class Action over AI Copyright Lawsuit

U.S. Court Partly Dismissed GitHub, Microsoft, OpenAI Bulk of Class Action over AI Copyright Lawsuit

The U.S. District Court of Northern District of California, has dismissed many software privacy claims against Microsoft, GitHub and OpenAI but left the door open for an anonymous group of code writers to improve their case.

In 2021, a class action was filed which claimed Microsoft and other companies’ AI-powered coding assistant, GitHub Copilot, relies on “software piracy on an unprecedented scale.”

GitHub, which was acquired by Microsoft in 2018, is the largest internet hosting service for software projects stored in Git, a widely used open-source version control system for managing software source code.

In 2021, GitHub launched a ‘CoPilot’ which is trained on public repositories of code scraped from the web. Some of those get published using licenses requiring anyone reusing the code to credit the creators, since it sometimes produces strings of licensed code without providing credit, the plaintiffs alleged copyright infringement and claimed penalties in excess of $9 billion.

Per contra, Microsoft, GitHub and OpenAI filed motions to dismiss the proposed class action. It was contended by the defendants that the claims submitted by the plaintiff cannot be granted due to lack of injury and failure to state an otherwise viable claim, as well as failing to plead violations of cognizable legal rights.

The companies argued that the plaintiffs failed to describe how they were personally harmed by the tool or even identify themselves. They also asserted that CoPilot simply helps developers write code by generating suggestions based on what it has learned from the entire body of knowledge gleaned from public code.

The U.S. District Judge Judge Jon Tigar, advanced the plaintiffs’ claims for breach of license and to file under pseudonyms to protect their identities. According to him plaintiffs had sufficiently identified which contractual obligations were breached, as well as emails containing death threats that sufficiently proved their concern about identifying themselves.

The judge found that the plaintiff had a plausible argument that without injunctive relief, there could be a substantial risk that CoPilot may copy their licenced code, even though the plaintiffs had not directly asserted that they had suffered the harm.

However, the Judge dismissed their claims for civil conspiracy and declaratory relief with prejudice as they were not standalone claims.

Judge Tigar also dismissed with leave to amend the claims for tortious interference in a contractual relationship, fraud and unjust enrichment, unfair competition, injury to privacy rights, breach of the GitHub privacy policy and terms of service, negligence and violation of the California Consumer Privacy Act.

The Court ruled that the plaintiffs could retry their copyright pre-emption claim as their state law claims were qualitatively distinct from claims made under the Copyright Act as they were related to unauthorised use of code, rather than only the unauthorised duplication of the plaintiff’s code.

The Court was of the considered view that the unfair competition claim lacked adequate evidence of injury to the plaintiffs' intellectual property rights and subsequent monetary damages.

Therefore, the judge rejected the defense motion to dismiss the plaintiff’s claim that Codex's capacity to reproduce code represents a breach of software licensing terms. The Court further rejected the defense effort to toss a claim under Section 1202(b) of the Digital Millennium Copyright Act that Copilot and Codex reproduce copyrighted code without the required copyright management information – author, title, owner, terms and conditions, and so on.