OpenAI is currently battling a copyright lawsuit in India, arguing that Indian courts lack jurisdiction due to its US-based operations. This legal challenge comes after similar defenses by Telegram failed in past cases. The case highlights the growing scrutiny of US tech firms’ compliance with local laws in foreign markets. Legal experts suggest the case could still be heard in Indian courts, despite OpenAI’s jurisdiction claim.
OpenAI is facing significant challenges as it contends that Indian courts lack jurisdiction over lawsuits related to its US-based operations. This comes in the wake of failed defenses by Telegram in similar cases, and increasing scrutiny of US tech firms regarding compliance with local laws.
With millions of users, India is OpenAI’s second-largest market, and the company is embroiled in a legal dispute initiated by the domestic news agency ANI over alleged copyright infringement.
The case gained traction recently as prominent book publishers and media entities, including those owned by billionaires Gautam Adani and Mukesh Ambani, have united against OpenAI. The company claims it develops its AI models using publicly available information in accordance with fair use principles, but it is also facing copyright lawsuits in the US, Germany, and Canada.
Also Read: [ANI vs. OpenAI] OpenAI Challenges Delhi High Court’s Jurisdiction in Copyright Case
Details of OpenAI’s legal arguments in other jurisdictions remain undisclosed. However, in New Delhi, it contends in court documents that its terms of service stipulate that disputes should be resolved in San Francisco, asserting that it is outside the jurisdiction of Indian courts and “does not maintain any servers or data centers” in India.
Dharmendra Chatur, a partner at Poovayya & Co., remarked,
“It’s a pre-Internet era argument which will not fly in Indian courts today. Google, X, Facebook all provide services through their foreign entities and are subject to litigation in India.”
He noted that courts typically evaluate whether a website is accessible and offers services to Indian customers when determining jurisdiction.
OpenAI did not respond to inquiries from Reuters, and its lawyer in India, Amit Sibal, declined to comment due to ongoing proceedings.
Legal opinions from six other lawyers and submissions from court-appointed experts in the case, Arul George Scaria and Adarsh Ramanujan, suggest that Indian judges can indeed hear the case. Scaria indicated in a January 25 submission, which has not been publicly disclosed, that “it is evident that OpenAI is making their interactive services available to users in India.”
OpenAI’s website indicates that it charges an 18% tax on paid services in India, and the company has noted a “massive uptake of ChatGPT” in this critical market. A favorable ruling on the jurisdiction issue would exempt OpenAI from facing the copyright lawsuit in India. Conversely, if it loses, it would need to address ANI’s request for the deletion of training data and could incur damages of $230,000 (approximately Rs.2 crore).
The Delhi court is scheduled to hear the case next in February regarding jurisdiction and other related arguments.
While News agency, which holds a 26% stake in ANI, clarified it is not involved in the agency’s business practices or operations, legal experts and Scaria have pointed to a 2022 ruling involving Telegram as a precedent.
In that case, an Indian author sued Telegram for leaking her copyrighted material, but the company claimed it was governed by Dubai laws and had servers outside India.
The Delhi judge ruled that,
“The conventional concepts of territoriality no longer exist… (Telegram choosing) not to locate its servers in India cannot divest the Indian courts from dealing with copyright disputes.”
OpenAI, however, cites a 2009 Indian court ruling that stated mere accessibility of an app or website does not grant jurisdiction over a foreign defendant. Even if OpenAI’s jurisdiction argument does not initially halt the lawsuit, an Indian intellectual property lawyer noted it could later aid the company in arguing that any court order would need enforcement in other countries.
Although Prime Minister Narendra Modi’s government is not directly involved in the OpenAI lawsuit, its relationship with Big Tech has been complex. In 2021, India’s IT minister criticized US tech firms for insisting they “will only be governed by laws of America,” which he deemed “plainly not acceptable.”
The most notable public confrontation occurred when Twitter, now X, refused to comply with governmental content removal orders, prompting the government to assert that “Twitter needs to comply with the laws of the land.”
Although Twitter later complied, it subsequently filed a lawsuit against New Delhi, which is still ongoing.
Despite these legal challenges, OpenAI CEO Sam Altman has plans to visit India on February 5. An email revealed that two other senior executives, James Hairston and Srinivas Narayanan, will also be in India.
OpenAI India executive Pragya Misra last year, stated,
“India is really important… we’ve seen a massive uptake of ChatGPT,”
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