The Ontario Court of Appeal on Friday dismissed OpenAI's attempt to shut down a copyright lawsuit brought by a coalition of Canadian news publishers, ruling that the case is sufficiently connected to the province to be heard there. The decision allows the first Canadian case over the use of copyrighted news content to train generative AI to move toward a trial on the merits [3].
The lawsuit, filed by a coalition including the Toronto Star, alleges that OpenAI illegally used their articles to train ChatGPT and is profiting unjustly from that use [1]. OpenAI, based in California, had argued that because it lacks a physical office in Ontario, the dispute belongs in a U.S. court [1].
Superior Court Justice Jessica Kimmel rejected that argument last year, finding that three OpenAI-affiliated entities — OpenAI OpCo, LLC, OpenAI, LLC and OpenAI, Inc. — were "doing business" in Ontario [1]. The Court of Appeal upheld her ruling in a unanimous decision written by Justice Bradley Miller [1]. Miller wrote that Kimmel did not err in finding multiple instances of the companies carrying on business in the province, including contractual arrangements, advertising to Ontario users and licensing tools to customers directly or through third parties [1]. The court also ordered OpenAI to pay $100,000 in legal costs [1].
OpenAI had "relied heavily" on the absence of a physical presence, Miller noted, but the case law it cited did not support the proposition that physical presence is required for assumed jurisdiction [1]. The company did not respond to a request for comment by publication time [1].
"This decision matters well beyond the news media industry," said Sana Halwani, a lawyer at Lenczner Slaght LLP representing the publishers. "Digital businesses earn money from Canadian content and users, and their activity reaches into Canada. When disputes arise, they must answer to Canadian law in Canadian courts." The firm added that the media companies welcome technological innovation but insist all participants follow the law [1].
Alissa Centivany, an associate professor of information and media studies at Western University, said the outcome could affect "a big range of copyright rights holders in Canada." Most jurisdictions permit scraping for non‑commercial or research purposes, she noted, "but we don't have any jurisdictions that have said it's OK to do this for commercial reasons or for reasons that involve creating expressive outputs that compete with the originals." She added she hopes courts will find such use infringing [1].
OpenAI may still seek leave to appeal to the Supreme Court of Canada, which hears only a small fraction of cases brought before it [1].
The ruling arrives as similar litigation proceeds south of the border. The New York Times sued OpenAI in 2023, and eleven other U.S. publishers have joined that case [1]. In Canada, the same coalition of news organizations has also sued Anthropic over alleged copyright infringement in the training of its Claude models, and La Presse has filed a separate suit against Anthropic in Quebec [3]. Class actions on behalf of Canadian authors are pending in British Columbia and Quebec [3].
For now, the Ontario case returns to the lower court, where the publishers' claims of copyright infringement and unjust enrichment will be tested against whatever defences OpenAI mounts. The Court of Appeal's decision establishes only that a Canadian court can hear them.
Sources #
- OpenAI loses appeal to dismiss major copyright lawsuit by ... (thestar.com)
- Roiled by AI and an ongoing trade war, the cleantech ... (thestar.com)
- Court allows news publishers' copyright lawsuit against OpenAI to go ahead (ca.finance.yahoo.com)