OpenAI Says "Consolidate This!" Asks The Courts to Shrink-Wrap Eight Infringement Cases Into One

So Is That Something Media & Entertainment Companies Should Cheer or Jeer?

Dec 16, 2024

Happy Holidays dear readers! Here’s your latest brAIn dump. First, it’s the “mAIn event” (my feature story about OpenAI’s attempts to consolidate virtually all of its litigations into one — and why this matters, to each of you). Next, speaking of litigation, it’s the “AI Litigation Tracker” — updates on key generative AI infringement cases by leading IP law firm McKool Smith.

Since I’m no Scrooge, I’ll be giving you newsletter gifts throughout the holidays, especially since AI never sleeps (that’s why it’s so tantalizing for some to use synthetic actors … synths have such few demands!). Here’s my holiday schedule:

(1) Next Monday, the 23rd, I’ll highlight my “greatest hits” of the past year — those articles that you readers found to be most impactful. These also highlight the most important issues to contemplate during your “down time.”

(2) Then, on December 30th, in my last newsletter of the year, I’ll preview what’s to come in 2025 for GenAI as it impacts media and entertainment. It’ll help you prep for your conversations in Vegas as you start your year in over-drive at CES.

And speaking of CES, reach out via peter@creativemedia.biz if you’d like to meet.

I. The mAIn event - OpenAI Says “Consolidate This!”

What a week for OpenAI! It finally released Sora (its video generator) to the masses. For a “mere” $200/month, now you can create up to 20 second videos in 1080p. It also got caught up in the general net of the Writer Guild of America’s open letter to CEOs of major studios demanding that they take “immediate legal action” against generative AI companies for allegedly using decades of films and television shows to train their LLMs.

But OpenAI takes center stage here for very different reasons — due to one of the latest significant developments in generative AI infringement litigation that its legal team engineered. OpenAI just asked the federal courts to consolidate 8 separate litigations in which it is a defendant into one (shrink-wrapped the holidays!).

First, Why This Story Should Matter to You

I know, I know. You heard “legal” and you’re already shutting down and turning to your eggnog. I get it. But trust me, everyone in media, entertainment and tech — no matter what role you play — needs to understand what’s going on here. The end result in the courts will ultimately define all of our professional lives (including how much we get paid). That means yours too.

OpenAI Did It Before, and Now It’s Going Even Bigger!

Several months ago, OpenAI asked the Courts to consolidate three separate generative AI class action lawsuits against it into one — Paul Tremblay v. OpenAI, Inc., Sarah Silverman v. OpenAI, Inc., and Chabon v. OpenAI. The courts dutifully obliged, and now that single case is captioned In re OpenAI ChatGPT Litigation (note: this consolidated case, together with other key GenAI media cases, are closely tracked in the “AI Litigation Tracker” (see below), with the help of my friends at McKool Smith).

And now, OpenAI is seeking to consolidate eight (yes, count ‘em, 8!) individual copyright and DMCA infringement cases into what is called a single “multidistrict litigation” (or “MDL”). It’s a move with wide-ranging implications for the future of all copyright cases pending against OpenAI (not to mention all other defendant GenAI companies). The 8 cases all hail from two federal district courts — the Northern District of California and Southern District of New York (I identify the 8 individual cases at the end of this article for the sake of clutter).

Chad Hummel, Partner at McKool Smith. Not only is he handsome. He is the best damn litigator on the planet.

What Is an MDL & How Do They Work?

I’m an intellectual property/entertainment lawyer and litigator by trade, and even I had never heard of MDL’s (I practiced law for several years and clerked for the Chief Justice of the U.S. District Court in Hawaii as my first job. Why Hawaii, you ask? Literally because it was “there” for this Minnesota frozen tundra kid). So naturally, I turned to an expert on the subject — Chad Hummel, partner at McKool Smith — the leading litigation firm in the country that represents rights-holders (McKool Smith monitors and updates my “AI Litigation Tracker” below). Chad has participated in MDL’s himself, so he has first-hand experience of what they are and how they work.

Chad tells me that MDL’s are a completely separate animal from class actions. MDL’s are overseen by the U.S. Judicial Panel on Multidistrict Litigation (JPML) — which is essentially a committee composed of seven judges appointed by Chief Justice Roberts of the Supreme Court. Defendants like OpenAI have a right, under the relevant federal rules of court, to ask the JPML to consolidate multiple cases into a single MDL to promote litigation efficiency and legal certainty — i.e., consistency in the law so that individuals and companies can act accordingly. Imagine that novel concept? The search for efficiency and certainty! See? Even lawyers can be practical!

How Does The JPML Decide That A Case Qualifies for Consolidation (& How Does the JPML Decide Which Judge Should Oversee It?)

To qualify for consolidation into an MDL, it’s critical for the JPML to find that the separate individual cases share common issues of fact — i.e., shared claims of harm, products, or other relevant shared circumstances. Common purely legal issues alone are not enough.

In the case of OpenAI — and the multiple litigations it’s now defending in multiple federal courts — the requisite common issues of fact likely center on how OpenAI trains its LLM (on unlicensed media content) and then how its LLM generates its responses (and what those responses are) based on specific prompts. If the JPML agrees with OpenAI that these issues of fact are qualifying, then it must decide which individual federal judge will oversee the consolidated cases.

When selecting “the chosen one” — the relevant judge, to whom the consolidated cases are assigned — the JMPL considers several factors: (i) the relevant experience and expertise of the judge, (ii) the stage of litigation in each case, and (iii) the optimal venue from a geographic standpoint, so that the burden of changing venues on individual plaintiffs is mitigated to the extent possible.

Why OpenAI’s Move Matters (& The Odds That OpenAI’s MDL Request Will Be Granted)

If consolidated, the court chosen by the JPML to oversee the newly single “big” (very big) case will have enormous power to shape the future of AI and copyright law. Rather than the possibility of a dozen inconsistent “fair use” rulings, for example, there would be just one decision with a massive impact.

Regarding the odds of success for OpenAI with its MDL request, Hummel tells me that it is “more likely than not” that the JMPL will grant it due to the common issues of fact he sees in these individual infringement litigations.

And if the JMPL does, in fact, grant OpenAI’s MDL request, then I believe it’s likely that it would assign the consolidated cases to Judge Araceli Martinez-Olguin of the Northern District of California, since he is already hearing the three consolidated class action litigations and, therefore, has deep experience and expertise in these GenAI-media facts and issues.

But until the JPML makes its decision, OpenAI has already gone on record that it will continue to move forward in each of the 8 relevant litigations. I’ll follow all of this closely for you.

NOTE: The 8 relevant cases that OpenAI has requested to consolidate into an MDL are the following: In re OpenAI ChatGPT Litigation (the one mentioned above, which had already consolidated three cases), Millette v. OpenAI, Authors Guild v. OpenAI, New York Times v. OpenAI, Daily News v. OpenAI, The Center for Investigative Reporting, Inc. v. OpenAI, Raw Story Media v. OpenAI, and Intercept Media v. OpenAI.

My Recommended Podcast of the Week

“Hard Fork,” by The New York Times, is a tech podcast I highly recommend. The latest episode covers TikTok’s potential ban, gives a worthwhile primer of quantum computing (and Google’s break-through with its new “Willow” chip” — and, most importantly for our purposes here, lays out a fascinating case for using Anthropic’s Claude as your AI Chatbot of choice. Great listening as you walk your dog — or simply want to get some “me” time during the holidays!

LISTEN TO HARD FORK PODCAST EPISODE

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II. AI Litigation Tracker: Updates on Key AI Infringement Cases (by McKool Smith)

Partner Avery Williams and the team at McKool Smith (named “Plaintiff IP Firm of the Year” by The National Law Journal) lay out the facts of — and latest critical developments in — the key generative AI/media infringement cases listed below via this link to the “AI Litigation Tracker”.