Perplexity AI loses bid to dismiss or transfer News Corp copyright case

By Blake Brittain

Aug 21 (Reuters) - Perplexity AI failed on Thursday to convince a New York federal court to dismiss or transfer a lawsuit brought by News Corp's NWSA.O Dow Jones and the New York Post over the artificial intelligence startup's alleged misuse of their articles to train its AI systems.

U.S. District Judge Katherine Failla said that San Francisco-based Perplexity did not demonstrate that her court lacked jurisdiction over the claims from the Rupert Murdoch-owned publishers or that the case should be moved to California.

Spokespeople for Perplexity and News Corp did not immediately respond to requests for comment on the decision. The lawsuit is one of several high-stakes cases brought by news outlets and authors against tech companies over the unauthorized use of their copyrighted materials to train AI chatbots and other systems.

Wall Street Journal publisher Dow Jones and New York Post owner NYP Holdings said in their lawsuit filed last year that Perplexity's AI "answer engine" copies their content without permission or compensation to generate responses to user prompts.

"What Perplexity does not tout is that its core business model involves engaging in massive freeriding on Plaintiffs’ protected content to compete against Plaintiffs for the engagement of the same news-consuming audience, and in turn to deprive Plaintiffs of critical revenue sources," the complaint said.

Perplexity asked the court in February to transfer the case to its home state of California or dismiss it based on a lack of jurisdiction in New York. It also said that its system relies on "publicly available factual information that is not protected by copyright law."

Failla rejected Perplexity's jurisdiction arguments on Thursday and said that her court could hear the case based on the company's business, marketing and customer base in New York.

The case is Dow Jones & Co v. Perplexity AI Inc, U.S. District Court for the Southern District of New York, No. 1:24-cv-07984.

For News Corp: William Barr, Paul Cappuccio, Justin Romeo and Brett Katz of Torridon Law

For Perplexity: James Day and Eugene Mar of Farella Braun & Martell

Read more:

Murdoch's Dow Jones, New York Post sue Perplexity AI for 'illegal' copying of content

Perplexity CEO 'surprised' by Dow Jones, New York Post lawsuit against startup

Perplexity says will defend itself in the Dow Jones, New York Post lawsuit