We Need to Discuss Microsoft’s Motion to Dismiss the New York Times Copyright Suit (Premium)

Like OpenAI, Microsoft believes it should be free to grow its nascent AI empire by stealing content created by others. And it has filed a motion to dismiss at least part of the recent New York Times lawsuit that charges it, and OpenAI, with copyright infringement. Sadly, its arguments in no way reach the logical and common sense defense it made during its Activision Blizzard travails. Indeed, they are no better than the nonsense that OpenAI offered up two months ago.

Microsoft’s filing starts on a purposefully dramatic note.

“‘The VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone,’ warned Jack Valenti, then head of the Motion Picture Association of America, in his 1982 testimony to the House of Representatives,” the Microsoft motion reads. “The analogy was part of an all-out effort by television and movie producers to stop a groundbreaking new technology. As Mr. Valenti spoke, the entertainment industry’s claims of copyright infringement were headed to the Supreme Court after years of litigation. The Court ultimately rejected the alarmism and voted for technological innovation and consumer choice, with its seminal decision in Sony Corp. of America v. Universal City Studios, IncSony Corp. of America v. Universal City Studios, Inc. freeing consumers from broadcast schedules and ushering in an on-demand world. And that decision did not destroy Hollywood— quite the opposite, the entertainment industry flourished when the VCR opened new markets and revenue streams. But at the time, empty warnings nearly won the day.”

This is a horrible misrepresentation of history and thus a baseless comparison to a legal precedent that in no way mirrors Microsoft’s legal battle with The New York Times. And it is rather astonishing that the software giant would present this in the opening paragraph of its motion to dismiss at least parts of The New York Times lawsuit. Because the courts will know that to be true.

For those unfamiliar, Sony Corp. of America v. Universal City Studios, Inc., was a legal battle that went all the way to the U.S. Supreme Court in 1984. Universal Studios was at the time a standalone movie studio and it sued Sony because its Betamax home video recording devices could be used to allow consumers to steal copyrighted works. Sony won the case on fair use grounds, though it then lost on appeal, with that court ruling that the primary purpose of a Betamax machine was to steal copyrighted content. Sony then appealed to the U.S. Supreme Court, which issued the ruling that Microsoft references above.

Well. Partially references.

Microsoft leaves out the central point of that case, which is that Sony won specifically because the Betamax machine was not designed to infringe on copyright, though it could be used for that purpose. Instead, it was designed to let customers time-shift by recording TV shows and movies on their televisions so they could watch them at a later time. Yes, a Betamax machine could be used to infringe on copyright, and we all know it was. But it also had other uses, and time-shifting, its primary use, was a significant non-infringing use. Significant enough to warrant the fair use designation.

This is a classic example of the nuance I try to introduce into today’s discussions about Big Tech. For example, it’s not mutually exclusive that Google might make the best search engine in the world but also be a malignant, anticompetitive force whose business practices harm consumers, competitors, and partners. Those things can both be true. Just as was the Betamax machine’s combination of non-infringing and infringing use cases.

Microsoft has purposefully left out that nuance in its motion. A motion that pretends that the Betamax case resulted in a legal precedent in which copying copyrighted content and then regurgitating it is somehow fair use and thus legal.

Worse, its argument that Hollywood flourished in the wake of Betamax and other video recorders masks a reality in which professional news publications like The New York Times have never faced a threat as serious as AI. The notion here is that no one would ever prompt Copilot or OpenAI’s ChatGPT in such a way that some significant portion of the output would be a regurgitation of content created by The New York Times, content that might be used by some users—who pay Microsoft and not The New York Times—to replace the publication entirely.

But I’ve already explained why that argument is specious: AI is still nascent, and while chatbots like Copilot don’t do that right now, they could very easily be made to do so. In fact, the introduction of Copilot custom GPTs recently, made suspiciously quietly, speaks to this future. If we can have custom versions of Copilot designed just for images, vacation planning, cooking, and fitness training, why can’t we have one for news? Why can’t we have one dedicated specifically to summarizing The New York Times each day?

But don’t take my word for it. As I noted recently in AI Stole My Content and I Don’t Feel Good About It (Premium), a lower-tier AI service called Perplexity AI already offers an AI-based news feed that replaces a list of original sources with a list of AI-generated content. (Which, yes, stole from me.) This isn’t maybe happening in the future, it’s happening right now.

But back to the Microsoft argument about fair use and Betamax.

Unlike Betamax, AI like Copilot and ChatGPT doesn’t have a non-infringing use case because its creation specifically required theft. That is, OpenAI and Microsoft didn’t approach The New York Times and other publishers and explain what they wanted to do and how they might compensate these content creators. They just quietly stole copyrighted content from behind paywalls to train their AI. This AI would not exist without that theft. It could have, had these companies behaved ethically. But they did not.

And to present a precedent like the Betamax case in this fashion is all you need to know about Microsoft and its credibility. This is beyond embarrassing because it’s not a legal mistake, but a lie. A lie the court will recognize immediately, one that should result in the immediate dismissal of this motion.

Shame on you, Microsoft. As I wrote in We Need to Discuss OpenAI’s Response to the New York Times (Premium), now that you’ve been caught red-handed, it’s time to work with the content creators from which you’ve stolen and put the fair back in fair use.