May 2025
U.S. First Copyright Lawsuit Against RAG-Based AI Service: News Giants Sue Perplexity
In October 2024, the parent companies of The Wall Street Journal and the New York Post jointly filed a lawsuit in the United States District Court for the Southern District of New York
1
, accusing the generative AI company Perplexity AI of infringing on their copyrights and trademarks with its "perplexity" service.
Key Feature: First Copyright Lawsuit Against RAG-Based AI Service.
The United States has seen dozens of copyright infringement lawsuits filed against generative AI companies 2 , including one by The New York Times Company against Microsoft and OpenAI on December 27, 2023 3 . However, this case is the first copyright infringement lawsuit against a generative AI company that utilizes "Retrieval Augmented Generation" (RAG) technology.
The plaintiffs argue that Perplexity AI touts its use of RAG technology to provide users with the latest and most accurate news summaries. However, the company allegedly uses web scraping to massively copy copyrighted works published on The Wall Street Journal and New York Post websites without authorization, in order to build its RAG index. The plaintiffs believe this allows "perplexity" users to "Skip the Links" and directly access news summaries, leading to a decline in user click-through rates and website visits for news media outlets like The Wall Street Journal and the New York Post, which in turn affects their subscription and advertising revenue.
Compared to generative AI that does not use RAG technology and cannot identify the source of the information in the generated content, "perplexity" labels the sources in its generated content, allowing users to further verify or view the original information. In this regard, the plaintiffs also argue that "perplexity" sometimes generates false information (i.e., "hallucinations") and incorrectly attributes this false content to reports from The Wall Street Journal or the New York Post, damaging the plaintiffs' trademark reputation and diminishing the distinctiveness of their trademarks.
In response to the plaintiffs' accusations, Perplexity AI, like other defendants in generative AI copyright infringement lawsuits, argues that its use of news reports falls under fair use, as they provide users with more innovative services through AI tools.
The legal claims brought by the plaintiffs in this case include the following:
1. Copyright Infringement One: The act of "perplexity" inputting the plaintiff's work into the RAG index constitutes copyright infringement.
2. Copyright Infringement Two: The act of "perplexity" using the plaintiff's work to generate content in response to user queries, constitutes copyright infringement.
3. Trademark Infringement: The use of the plaintiff's trademark by "perplexity" has damaged the plaintiff's trademark reputation and diminished the distinctiveness of its trademarks.
No generative AI copyright infringement cases in Taiwan so far.
Currently, there are no generative AI copyright infringement cases in Taiwan. However, the Taiwan Intellectual Property Office (TIPO) issued an interpretative letter via email (No. 1111212) on December 12, 2022 4 , pointing out that the use of AI art generation tools like Midjourney, which utilize artificial intelligence to connect to online resources and employ algorithms to learn from copyrighted works on the internet, may involve the act of "reproduction" of others' works. Unless the situation falls under the fair use provisions stipulated in Articles 44 to 65 of the Copyright Act, consent or authorization from the copyright holder must be obtained before such use.
It is foreseeable that if similar cases emerge in the future, Taiwanese courts will likely refer to U.S. litigation practices. Therefore, it is worthwhile for us to continue monitoring the progress of generative AI-related lawsuits in the U.S.
1. Dow Jones & Co. v. Perplexity AI. Inc., No. 24-cv-7984 (S.D.N.Y. Oct. 21, 2024).
2. Chat GPT is Eating the World, Master List Copyright Lawsuits v. AI Companies in U.S., https://chatgptiseatingtheworld.com/2024/08/27/master-list-of-lawsuits-v-ai-chatgpt-openai-microsoft-meta-midjourney-other-ai-cos/ (Last viewed date: May 20, 2025).
3. The New York Times Company v. Microsoft Corporation, OpenAI, Inc., No. 1:23-cv-11195 (S.D.N.Y. Dec. 27, 2023).
4. TIPO interpretative letter via email (No. 1111212). https://www.tipo.gov.tw/copyright-tw/cp-407-916892-c036b-301.html
Key Feature: First Copyright Lawsuit Against RAG-Based AI Service.
The United States has seen dozens of copyright infringement lawsuits filed against generative AI companies 2 , including one by The New York Times Company against Microsoft and OpenAI on December 27, 2023 3 . However, this case is the first copyright infringement lawsuit against a generative AI company that utilizes "Retrieval Augmented Generation" (RAG) technology.
The plaintiffs argue that Perplexity AI touts its use of RAG technology to provide users with the latest and most accurate news summaries. However, the company allegedly uses web scraping to massively copy copyrighted works published on The Wall Street Journal and New York Post websites without authorization, in order to build its RAG index. The plaintiffs believe this allows "perplexity" users to "Skip the Links" and directly access news summaries, leading to a decline in user click-through rates and website visits for news media outlets like The Wall Street Journal and the New York Post, which in turn affects their subscription and advertising revenue.
Compared to generative AI that does not use RAG technology and cannot identify the source of the information in the generated content, "perplexity" labels the sources in its generated content, allowing users to further verify or view the original information. In this regard, the plaintiffs also argue that "perplexity" sometimes generates false information (i.e., "hallucinations") and incorrectly attributes this false content to reports from The Wall Street Journal or the New York Post, damaging the plaintiffs' trademark reputation and diminishing the distinctiveness of their trademarks.
In response to the plaintiffs' accusations, Perplexity AI, like other defendants in generative AI copyright infringement lawsuits, argues that its use of news reports falls under fair use, as they provide users with more innovative services through AI tools.
The legal claims brought by the plaintiffs in this case include the following:
1. Copyright Infringement One: The act of "perplexity" inputting the plaintiff's work into the RAG index constitutes copyright infringement.
2. Copyright Infringement Two: The act of "perplexity" using the plaintiff's work to generate content in response to user queries, constitutes copyright infringement.
3. Trademark Infringement: The use of the plaintiff's trademark by "perplexity" has damaged the plaintiff's trademark reputation and diminished the distinctiveness of its trademarks.
No generative AI copyright infringement cases in Taiwan so far.
Currently, there are no generative AI copyright infringement cases in Taiwan. However, the Taiwan Intellectual Property Office (TIPO) issued an interpretative letter via email (No. 1111212) on December 12, 2022 4 , pointing out that the use of AI art generation tools like Midjourney, which utilize artificial intelligence to connect to online resources and employ algorithms to learn from copyrighted works on the internet, may involve the act of "reproduction" of others' works. Unless the situation falls under the fair use provisions stipulated in Articles 44 to 65 of the Copyright Act, consent or authorization from the copyright holder must be obtained before such use.
It is foreseeable that if similar cases emerge in the future, Taiwanese courts will likely refer to U.S. litigation practices. Therefore, it is worthwhile for us to continue monitoring the progress of generative AI-related lawsuits in the U.S.
1. Dow Jones & Co. v. Perplexity AI. Inc., No. 24-cv-7984 (S.D.N.Y. Oct. 21, 2024).
2. Chat GPT is Eating the World, Master List Copyright Lawsuits v. AI Companies in U.S., https://chatgptiseatingtheworld.com/2024/08/27/master-list-of-lawsuits-v-ai-chatgpt-openai-microsoft-meta-midjourney-other-ai-cos/ (Last viewed date: May 20, 2025).
3. The New York Times Company v. Microsoft Corporation, OpenAI, Inc., No. 1:23-cv-11195 (S.D.N.Y. Dec. 27, 2023).
4. TIPO interpretative letter via email (No. 1111212). https://www.tipo.gov.tw/copyright-tw/cp-407-916892-c036b-301.html
