The old sues the new; our latest "clash of titans" takes the form of one of the most significant lawsuits filed this year. Full disclosure: this post was not generated or assisted by any AI tool; it is the original work product of the author, Attorney Timothy P. Flynn.

Last week, the New York Times sued Open AI and its affiliated companies, along with Microsoft, alleging copyright infringement. The Times alleges that Open AI, in the development of its proprietary machine learning neural network, scraped millions of copyrighted Times' articles and other protected content from the Internet. 

Further, the Times alleges that despite efforts to negotiate a resolution with the defendant companies, the paper is now owed money damages for the use of its content. This claim is based on the Times' allegations that they have made a significant investment, literally over centuries, in their news platform. Here is a link to the complaint that was filed in the United States District Court in Manhattan.

Core Allegations in the NYT Complaint

The first paragraph of the Times' complaint fittingly reads like a piece of finely-tuned journalism: 

Independent journalism is vital to our democracy. It is also increasingly rare and valuable. For more than 170 years, The Times has given the world deeply reported, expert, independent journalism. Times journalists go where the story is, often at great risk and cost, to inform the public about important and pressing issues. They bear witness to conflict and disasters, provide accountability for the use of power, and illuminate truths that would otherwise go unseen. Their essential work is made possible through the efforts of a large and expensive organization that provides legal, security, and operational support, as well as editors who ensure their journalism meets the highest standards of accuracy and fairness. This work has always been important. But within a damaged information ecosystem that is awash in unreliable content, The Times’s journalism provides a service that has grown even more valuable to the public by supplying trustworthy information, news analysis, and commentary.

These are the self-proclaimed attributes the Times asserts it brings to world-class professional journalism:

• Investigative reporting; 
• Breaking news reporting; 
• Beat reporting; 
• Reviews and analysis; 
• Commentary and opinion; 
• 10.1 million digital and print subscribers worldwide; 
• 250 articles publised every day; and 
• an unparalelled archive of content

At certain points, the complaint editorializes that the cost of the world class journalism the Times brings to the news-consuming public has drastically increased due to general AI products and that flood "today's information ecosystem". The complaint notes the hundreds of newspapers that have gone out of business as a direct result of the Internet and laments the open floodgates of "misinformation".

To protect its work product, the Times alleges that it has copyrighted every edition of its newspaper for over 100 years; it has deployed a paywall; and has strict licensing agreements. 

Here are the counts of the complaint which lay out the legal theories of liability for the Defendant companies: 

Count I - Copyright Infringment

Count II - Vicarious Copyright Infringment

Counts III and IV - Contributory Copyright Infringment

Count V - Violation of the Digital Millennium Copyright Act

Count VI - Unfair Competition by Misappropriation

Count VII - Trademark Dillution

In their prayer for relief, the Times seeks statutory and compensatory damages; disgorgement; an injunction against ChatGPT; destruction of all ChatGPT models that use NYT content in violation of their copyrights, and, of course, attorney fees.

The NYT is bringing the house in this suit. All within the context of Artificial Intelligence, Artificial General Intelligence, and machine learning. 

Machine Learning Basics

The term "Artificial Intelligence" is one of the most grotesque misnomers of all time. Tech industry professionals eschew the term for the more proper: "machine learning". 

Good old fashioned AI was a complex system of math-based rules. Then, sometime around the turn of the last Century, neural computing networks -computer networks designed to function more like a human brain- began to develop along with high-capacity supercomputers, giving birth to the new era of AI or, more appropriately, machine learning. 

The idea behind machine learning is that language, through prompts, is broken down to its basic component parts -words and characters- and assigned numeric value. With massive computing capacity behind it, the machine then uses probability to determine an accurate, or humanly appropriate, output in response to a given prompt. In the coding and design process, various outputs are then ranked. Thus, through a series of prompts, the computer learns to provide a better, more responsive, higher quality output.

Another feature of modern machine learning is the large language model [LLM]. A massive amount of language data is stored in the machine from which it retrieves and fashions its natural language response to a specific set of prompts. While human users think up the prompts, its the machine that has total access to the massive LLM and vast stores of other data. Think in terms of the Library of Congress combined with every college library on the planet, and then some. 

In the NYT copyright infringment lawsuit, the newspaper alleges that when Open AI's ChatGPT program scraped all manner of language data from the Internet, it swept proprietary NYT content along with it in the process. The Times further alleges that ChatGPT favors the NYT "style" of language as it lends itself to a highly ranked quality output. Makes sense when you think about it. If ChatGPT responds to a series of prompts in the manner of a seasoned NYT journalist, the AI user is ahead of the game. 

One of the many interesting allegations contained in the NYT complaint is that ChatGPT's first two versions were constructed on open source platforms with detailed specifications made public. Not so with ChatGPT's third and fourth iterations, notes the Times. This is because, according to the newspaper, Open AI purposely concealed the data it copied from the Internet to train its latest computer models. 

As an offer of proof set forth in the complaint itself, the NYT compares ChatGPT output and the text of a NYT article; the similarity is unmistakable. Plagiarism, says the Times. In another example, the times cites to a prompt complaining that the user was "paywalled out" of a specific NYT article, and asked ChatGPT to reproduce a portion of the article. The program complied with alacrity, reproducing the copyrighted and paywalled text.  

Another very interesting offer of proof and allegation of injury is the Times assertion that ChatGPT committed what is known in AI parlance as "hallucination". Hallucination occurs when a machine, like a chatbot, generates seemingly realistic sensory experiences that do not correspond to real world input; "misinformation", says the Times. They cite to an example where the prompt seeks a reproduction of the sixth paragraph of a specific NYT article, referenced by date, title and author. The output, however, contains non-existent quotes and other text not found in the article. This has obvious implications to the Times' journalistic reputation and could lead to a claim for damages.

It will be interesting to see how Open AI and Microsoft respond to these highly specific allegations. 

What's happening over at Open AI?

You may have heard about all the drama over at Open AI when they suddenly fired their CEO, Sam Altman last fall. Open AI originally started out as a non-profit, as noted in the NYT complaint. Their stated mission back in 2015 was to develop AI for the good of humanity, not to maximize profits. The company's board of directors had a distinctly non-tech world look; mostly academics and other non-profit professionals, except for Altman, whose tech credentials are solid. 

Despite its stated mission, as the potential for this powerful computing tool came into better focus, Microsoft jumped aboard with billions of venture capital in exchange for a 49% ownership of Open AI's for profit subsidiary. Microsoft, with its myriad tech professional contacts, supported Altman's installation as CEO. 

Last November, however, a giant board of directors misunderstanding led to Altman's firing amid great backlash by Open AI's employees and by Microsoft, its benevolent investor. Some key folks at Microsoft quietly, then not so quietly, reached out to the Open AI board and reinstalled Altman. All seems to be well for the moment. Then, last week, here comes the NYT lawsuit. 

What's Next in the Lawsuit?

The Defendant companies now have the option to answer the Times' complaint or, in lieu of an answer, they can file a motion for summary judgment pursuant to the Federal Rules of Civil Procedure. 

Given the recent board of directors drama, we will stay tuned to what Open AI and Microsoft do next. They need to focus on this lawsuit because if they lose, every content generator, including this 15-year old -nearly 650 post- blog, will have their collective hands out for a portion of Open AI's profits generated from our content. 

With Manhattan as the venue, this lawsuit will feature a high tech litigation battle between some of the most sophisticated law firms in the world. Four Big Law firms representing the NYT hail from New York, Washington, DC, Seattle, and Los Angeles. 

Post #637

www.clarkstonlegal.com

To put it bluntly, some federal judges are saying, "NO", rejecting requests to open gun stores.

The COVID-19 pandemic is all-consuming. Of course then, one of its tendrils has intersected America's sacred Second Amendment right to purchase and bear arms.

States Determine What Businesses Are Essential

Whether gun stores are "essential" businesses and thus can stay open under various state stay-at-home orders is a hotly debated topic. The issue involves local law enforcement and the national gun lobby attempting to work out an answer in federal  courts across the nation. As is so often the case in federal court, the answer depends on the judge, the region, and the circumstances.

With temporary but protracted government-forced business closures, the NRA, other pro-weapon organizations, and individual gun store owners are filing federal lawsuits by the hundreds, seeking to enjoin the local sheriff from shuttering gun businesses. These cases have a common ingredient: the gun-lobby puts the matter into suit with a motion seeking a temporary restraining order to enjoin the sheriff from closing the gun store.

Pro-gun groups assert that the forced government shut-downs violate citizens' rights to purchase and possess weapons under the Second Amendment to the United States Constitution. Further, the argument goes, the Second Amendment is unique in that it makes gun stores essential by its very text.

The Second Amendment

The pithy text of the amendment states:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

On the other side of the argument, state actors -governors across the nation- assert that their "stay-at-home" business closure executive orders are consistent with a state's health and safety interests to the extent that closed businesses reduce the spread of the disease. Michigan would be "Exhibit A" in this debate.

Executive Orders Here in Michigan

When word gets out in our local communities that certain businesses are in operation, the legal question becomes: is the business "essential" or "non-essential". Then the next question is whether the local county sheriff has the political will -the prosecutorial discretion- to ticket the local business for rogue operations.

Here in Michigan, four Northern Michigan sheriffs [from Mason, Manistee, Benzie, and Leelaneau Counties; contiguous counties along Lake Michigan] have banded together to protest Governor Gretchen Whitmer's latest executive shut-down order - Executive Order 2020-42; arguably one of the most restrictive in the country.

The primary thrust of the critique is that EO 2020-42 contains vague and inconsistent language that has proven difficult to enforce. The Lake Michigan sheriff's group said that EO 2020-42 was "a vague framework of emergency laws that only confuse Michigan citizens."

Aside from the general protestation against a state's power to close a legitimate business, a secondary question is whether gun stores are "essential". There is no simple answer to that one. Gun groups contend that the ability to possess weapons and ammunition is as essential as electricity, fuel and groceries. This is especially the case, they say, in these uncertain and fearful times. [Contact your neighborhood prepper for more info.]

Federal Courts Getting Drawn Into the Debate

Meanwhile, as this debate rages on, two federal judges in California, both Obama appointees, have refused to issue TROs sought by the NRA and other gun groups against the sheriffs in Ventura and Los Angeles Counties. These decisions will, no doubt, be appealed to the infamous Ninth Circuit Court of Appeals in San Francisco. We can expect one of the cases now percolating in the federal courts to emerge as a SCOTUS certiorari grantee.

We here at the Law Blogger anticipate that the various circuits will issue a patchwork of differing decisions; decisions highly-dependent on the specific texts of the state government orders. The right case going to the Supreme Court will offer a unique opportunity for a now-conservative Court to address the text of the Second Amendment. Look for such a case in the 2021-2022 term; we'll be monitoring the High Court's docket so we can report back to our readers.

We Can Help

If you own or operate a business that has been enjoined from serving your customers and your business is arguably "essential", our law firm can provide assistance. Simply click on the link below to access our web site for contact information.

Post #628
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Most serious-minded lawyers will tell you they prefer to practice law in federal court. It is a whole different professional arena.

Whenever I get to appear in Detroit for the occasional federal case, or in Cincinnati on appeal, I step-up my game a notch or two; you cannot help but do so. The moment you pass through security, into the sweeping marble halls, the history of the typical federal courthouse envelopes you. In addition to lots of marble, long usually uncrowded hallways, and spacious airy well-appointed courtrooms, you always find helpful but serious clerks.

One of the sacred traditions of federal practice is that no cameras are allowed into the courtroom. That's just the way it has been for the past 70-years.

Now, the unfortunately-named "Sunshine in the Courtroom Act" is again making its way through the U.S. House of Representatives; since 2005, the bill keeps getting reintroduced with various judges across the country expressing keen interest in getting cameras in their courts. If enacted, the bill calls for media coverage in federal courts at the discretion of the presiding judge.

Applying this concept to current affairs, it would mean we would all have the opportunity to follow the Boston Marathon bombing case; or the battle-of-the experts bench trial in the same-sex adoption case that unfolded here in Detroit just over a year ago.  Imagine the public interest in real-time coverage of the Supreme Court's proceedings in Bush v Gore, when the SCOTUS basically selected a President.

The prohibition of cameras is based on Federal Rule 53, which states:

Except as otherwise provided by a statute or these rules, the court must not permit the taking of photographs in the courtroom during judicial proceedings or the broadcasting of judicial proceedings from the courtroom.

This rule applies to all federal courtrooms, including -as amended- the U.S. Supreme Court. Despite occasional pressure from the legislature, and with three quarters of the American public indicating approval of placing cameras into federal courts, we predict that cameras will remain banned from federal courts.

One effect of the occasional pressure to open-up the federal courts has been to release digital recordings of the proceedings. This, of course, is a far-cry from real time streaming of the arguments and proceedings.

Some legal scholars question the public utility of having real-time media coverage of federal appellate argument, especially at the SCOTUS-level. The idea is that appellate courts do not issue on-the-spot decisions but rather, the appellate tribunals issue opinions and orders weeks after the submission of briefs and argument. Some say oral argument is but frosting on an already baked cake; so why the need for cameras?

Obviously, the countervailing argument is our need for the openness of government. As a member of the public, any one of us can go to Washington D.C. and stand in line at the SCOTUS to hopefully obtain one of the few hundred seats in the gallery of the High Court to observe the legal arguments first hand. But seriously, what's the likelihood of that?

For now, a federal court is one of the few areas of our government where the sun does not shine. We'll see whether the Sunshine in the Courtroom Act will get any traction to change all that...

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I've never been one to participate in the variety of silly game apps offered by Facebook; particularly the ones for which you must pay.  Most kids, on the other hand, are eager participants.

In Michigan, when a company contracts with a minor, that contract is voidable.  The Internet has taken voidable contracts with minors to another level with the emergence of digital currency.

A lawsuit filed against the mighty Facebook by a pair of minors has been grinding along out in Northern California for the past few years.  Here at the Law Blogger, we've been following developments in the case courtesy of Eric Goldman's Technology and Marketing Law Blog.

The minors filed suit against FB in federal court alleging a variety of claims stemming from their purchase of Facebook Credits; the minors used parental credit cards without authorization.  Facebook Credits are units of credit that are purchased in a user's local currency such as the dollar, pound, drachma, mark, or yen [no bit coins please] for use in say, the Ninja Saga game.

Facebook keeps bringing motions for summary judgment in the case, slowing stripping away some of the claims advanced in the lawsuit.

Last week, the federal judge dismissed the minors' claims for violation of California's unfair competition statute on the basis the minors' did not use their own money, so they did not have standing to make this claim.  Goldman is rightly troubled by the fact that no one seems to have standing to bring a claim under the state consumer protection statute; neither the minors nor their parents.

The court also granted Facebook's motion as to the federal Electronic Funds Transfer Act claims, ruling that the EFTA does not apply to FB because it is not a "financial institution" under the definition of the Act. Goldman characterizes this portion of the opinion as an "oddity" to the extent that Facebook Credits are a form of digital currency.

Arguably the most significant portion of the lawsuit  -the voidability of contracts with minors- survived FB's most recent procedural attack, so the case marches onward.  You can expect to see more of this type of litigation in the future as minors become increasingly active with the various forms of digital currency.

When discovery finally ends in this case, the presiding federal judge will likely be asked to decide yet another round of dispositive motions brought by both David and Goliath.  Stay tuned for those developments as the outcome could have a significant impact on both FB and how business with minors is conducted.

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The church can fire its priest, but can it fire the altar boy?

The case of Hosanna-Tabor Evangelical Lutheran Church and School v EEOC is one of the first cases to be argued in the 2011-2012 SCOTUS term that opens today in Washington D.C. This First Amendment freedom of religion case arises from an employment dispute at a now-defunct church in Redford, MI.

The issue in the case is the scope of the long-recognized exception to the federal employment discrimination laws when it comes to hiring or firing the clergy for a church, synagogue, or mosque.  This so-called "ministerial exception" has been recognized by all 12 federal appellate courts with the authority to hear such cases, as well as the supreme courts of 10 states.

The rationale behind the exception is that religious organizations, under the freedom of religion, should be allowed to make their own decisions about hiring and firing clergy, without concern of the normal anti-bias laws.  The question to be argued before SCOTUS on Wednesday morning is how deep into the staff and the payroll this ministerial exception goes.

Most religious institutions want the freedom to make all staffing decisions without concern for federal employment law; not just decisions relating to the pastor, the priest, the rabbi or the imam.  They are pushing for a flat-out ban on all anti-bias laws for any staffing decisions.

The Solicitor General asserts that, to the extent it is recognized, the church's interpretation of the exception is too broad.  Church staff members, the federal government will argue, are protected by federal and state employment laws.

The Hosanna-Tabor Church case involves a parochial school teacher who was fired allegedly because of her numerous disability-related complaints; the claim is that her firing by the church-school was retaliatory.  If the High Court considers her to be the equivalent of a clergy member, then she cannot seek the shelter of the Americans with Disabilities Act; if she is deemed to be a mere staffer, then she is entitled to protection under the applicable laws.

SCOTUS has seen disputes akin to this in prior petitions.  One of the reasons the Redford, MI church's petition may have been selected is because it was prepared and filed by University of Virginia Law School's Professor Douglas Laycock; one of the nation's leading experts on church-state law.

Our First Amendment jurisprudence continues to grow ever richer.  Stay tuned for the result.

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Like the "war on drugs", there has been much federal focus on eradicating those ubiquitous illegal gaming sites.  Yesterday, the feds moved against the owners of two of the biggest sites on the web.

Indictments were unsealed by the U.S. Attorney in Manhattan against the owners of PokerStars and Full Tilt Poker.  The feds have seized all their holdings in the United States.

You may recall that back in 2006, Congress passed the Unlawful Internet Gambling Enforcement Act, an anti-gaming law prohibiting banks from processing winnings from internet gambling sites.  PokerStars and Full Tilt Poker, among other sites, developed ways around the law, disguising gamblers' payments as sales for jewlery, flowers and other goods.

The U.S. Attorney alleges the schemes amount to bank fraud and money laundering.  The case is complicated by the foreign residence of the primary defendants.  Two of the gambling sites, for example, are located in Ireland.

At least 3 arrests were made, however, in Las Vegas and Utah, while the FBI coordinates with Interpol to secure nearly a dozen other named defendants.

The Internet domains of the main sites have been seized by the FBI with a notice posted on the home pages warning would-be Internet gamblers of possible crimes they could be committing under the United States Code.  Approximately 15-million Americans visit gambling sites on any given day.

Well, looks like this could be the end of Internet gambling in the U.S.

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Barry Bonds
Associated Press

Barry Bonds, formerly of the Pittsburgh Pirates and San Fransisco Giants, is the defendant in a federal perjury case that began today; the case was charged back in 2007.

Bonds holds several major league baseball records, including most home runs in a career (762), and in a single season (73).  He is the son of former all-star Bobby Bonds.  Son Barry has been named league MVP more than any other player, taking that award 4 straight years at the height of his career.

Unfortunately, he ended his career under the cloud of the federal indictment that is now unfolding in a San Fransisco trial.  The charges allege Bonds testified falsely to a federal grand jury on the subject of his use and sources of steroids.

Earlier, Bonds had been offered immunity in exchange for truthful testimony.  Bonds insisted he was unsure of what the substance(s) were, claiming he was "juicing" with flaxseed oil and arthritis cream for all he knew.

It's in the hands of the attorneys and jurors now.  On the first day of trial, however, Bonds received a bit of good news when his former trainer, Greg Anderson, chose a holding cell over live trial testimony.

This does not have the makings of a quick trial. 

Not the best lead into Opening Day.  Let's just hope its all done by the playoffs.