Business
Column: Who's really winning in Sarah Silverman's copyright suit against OpenAI?
If you’ve been following the war between authors and the purveyors of AI chatbots over whether the latter are infringing the copyrights of the former, you might have concluded that comedian and author Sarah Silverman and several fellow authors suffered a crushing blow in their lawsuit against OpenAI, the leading bot maker.
In his ruling Feb. 12, federal Judge Areceli Martínez-Olguín of San Francisco indeed tossed most of the copyright claims Silverman et. al had brought against OpenAI in lawsuits filed last year.
That’s the way much of the press portrayed the outcome: “Judge dismisses most of Sarah Silverman’s copyright infringement lawsuit” (VentureBeat). And “OpenAI Scores Court Victory” (Forbes). And “Sarah Silverman, Authors See Most Claims Against OpenAI Dismissed by Judge” (Hollywood Reporter).
If someone tells you it’s not about the money but the principle, they’re really talking about the money.
— Robin Feldman, UC College of the Law
Well, not really. Of the six counts in the authors’ lawsuit, one — whether OpenAI directly copied or distributed the plaintiffs’ works — wasn’t even before the judge because OpenAI hadn’t asked him to dismiss it. It’s a key allegation, and it’s still alive.
Of the other five, the judge cleared one to proceed; that’s a claim that OpenAI engaged in an “unfair” business practice under California law. He dismissed four others but gave the plaintiffs permission to amend their complaint and try again. The amended complaint is due before him by March 13.
At best, this is a mixed victory for both sides. But this lawsuit and a couple of other similar cases provide a road map for how the copyright issue may play out, in and out of court: with settlements that outline how much the artificial intelligence industry should pay copyright holders for using their works, and how those payments should be made.
Any such settlements would have to recognize that AI chatbots are here to stay, but also that they can’t mine published material for free.
“It’s hard to imagine that you could put the genie back in the bottle — that courts would decide that generative AI may not be used under any circumstances at any time,” says Robin Feldman, an expert in intellectual property law at UC College of the Law. “At the same time, it’s hard to imagine that generative AI could end up free to do whatever it wants at any time with copyrighted material.”
It’s fair to imagine, as well, that the issue is going to pose a headache for judges right up to the point that it lands before the Supreme Court, as Feldman believes is likely. That’s because of two aspects that are anything but cut-and-dried: copyright law and a new technology. U.S. copyright law is extremely complicated, and the technology bears features that don’t resemble anything seen in earlier technology transitions. Put them together, and the complexities are magnified exponentially.
Before going further, let’s define the landscape.
OpenAI is a high-tech firm with an investment from Microsoft that has been reported to be as much as $13 billion. Its best-known product is ChatGPT, a chatbot that spits out human-sounding answers to questions posed in plain language, though sometimes the “humans” it strives to emulate come off like idiots or plagiarists.
As I’ve reported, the chatbot business, like artificial intelligence research throughout its history, has been infected with hype. But it’s currently the target of a high-tech gold rush based on expectations that it will dramatically remake industries such as manufacturing, medicine, law — almost anything you can name. We’ll see.
As I’ve also reported, it’s a misnomer to call chatbots “artificial intelligence.” They’re not intelligent by any common definition of the word; they’re just good at seeming intelligent to an outsider unaware of the electronic processing inside them — a simulacrum of human thought, not the product of cogitation.
Chatbots don’t create content, as such. They have to be “trained” by pumping their databases full of human-produced content — books, newspaper articles, junk scraped from the web, etc. All this material allows the bots to generate superficially coherent answers to questions by generating prose patterns and sometimes repeating facts they dredge up from their databases.
That brings us back to the copyright issue. Silverman and other plaintiffs, including the writers Michael Chabon and Ta-Nehesi Coates, who filed a complaint similar to hers last year, contend that in using their works to train its chatbots, OpenAI is copying their works without permission, compensation or credit. Having “ingested” their works, the bots are “able to emit convincingly naturalistic text outputs.”
Indeed, Silverman’s lawsuit states that when asked to do so, ChatGPT is able to generate accurate summaries of the copyrighted works — “something only possible if ChatGPT was trained” on those works.
Among OpenAI’s defenses is that its use of copyrighted material falls within the exemption known as “fair use.” That’s a concept that allows snippets of published works to be quoted in reviews, summaries, news reports, research papers and the like, or to be parodied or repurposed in a “transformative” way.
OpenAI argues that previous court rulings say that creating copies of a copyrighted work as a preliminary step in developing a new, non-infringing product falls safely under the fair use protection, and that’s all it’s doing.
But it’s not at all clear that OpenAI’s interpretation will stand. In copyright law, fair use is a moving target, interpreted by judges on a case-by-case basis. “There are no hard-and-fast rules, only general guidelines and varied court decisions,” according to a digest by Stanford University librarians.
As chatbot developers snarf up more content to “train” their products, the potential copyright claims are only going to multiply. A disclosure: At least three of my books are in a database used to train some chatbots. I’m not a plaintiff in any of these lawsuits, but since they’re all fashioned as class actions in which I might qualify as a class member, it’s conceivable that if any go to trial and end with a class settlement, I might get a (probably vanishingly tiny) payout.
The lawsuits by individual writers are only one category. As I reported earlier, Getty Images has sued an AI company for copying millions of historical and contemporary photographs to which it holds licensing rights, allegedly to build a competing business. Dozens of music publishers have sued another AI firm for its “mass copying and ingesting” of copyrighted song lyrics to enable its bot to regurgitate them to its users by generating “identical or nearly identical copies of those lyrics” on request.
A lawsuit brought by New York Times Co. against Microsoft and OpenAI has attracted heavy attention not only because of the prominence of the plaintiff but because the newspaper produced evidence that OpenAI’s chatbot actually spits out lengthy verbatim passages from Times articles. This allows the Times to assert that the chatbot is cutting into the market for its work, a factor that judges have sometimes considered to reject a fair-use defense.
That’s a claim that the Silverman and Chabon lawsuits weren’t able to back up with evidence, which is what prompted Judge Martínez-Olguín to put some of their copyright claims on hold. He invited the plaintiffs to come back with allegations “that any particular output is substantially similar — or similar at all — to their books,” at which point he might reconsider.
Feldman observes that this entire legal issue is in the early “posturing” stage. The AI industry bases its defense on the principle that it’s doing nothing wrong and doesn’t owe creators anything. The creators say the principle is that what the chatbot developers are up to produces “an irreparable injury that cannot fully be compensated or measured in money,” to quote the Silverman lawsuit.
But money has settled previous donnybrooks over new technologies. Most notably, the recording industry and broadcasters solved their dispute over radio and television broadcasting of music with a licensing arrangement initially reached more than 80 years ago and that has survived in its essence to cover not only radio and television stations but also “streaming services, concert venues, bars, restaurants, and retail establishments.” (That’s not to say that artists are necessarily fairly compensated for these uses.)
That’s the best bet for how the chatbot issue will unfold, in time: with a financial arrangement sufficiently fair to both sides to be blessed by a judge. Feldman advises not to buy into the assertions on both sides that with principles at stake, no financial arrangement is possible. The New York Times, indeed, says that it filed its lawsuit only after negotiations to place a financial value on the use of its content failed to produce a “resolution.”
Feldman cites an adage (often attributed to the turn-of-the-century humorist Kin Hubbard) that holds: “If someone tells you it’s not about the money but the principle, they’re really talking about the money.”
Business
How the FIFA World Cup is providing a boost for L.A. businesses
Johnny Beig may have played in a semi professional cricket league in Australia, but this summer he’s a big fan of soccer in the United States.
It’s not just because he’s rooting for the World Cup team, though.
FIFA emblems are featured on jerseys that were created by the Dioz Group and distributed for all employees at the 16 FIFA World Cup venues this summer.
(Genaro Molina / Los Angeles Times)
Last year, Beig’s Beverly Hills-based company, Dioz Group, won a $2.5 million contract with On Location, FIFA’s hospitality partner, to design, manufacture and distribute uniforms for all employees working at FIFA World Cup venues this summer.
These include the people welcoming attendees into stadiums, VIP lounge chefs, waiters and the flagbearers during the opening ceremony.
After a multi-step application process, including presentations of its planning and strategy, Dioz says it produced more than 50,000 clothing garments including suits, jackets, shirts and hats and delivered them to the 16 World Cup venues around the U.S., Canada and Mexico in June.
Thanks in part to the World Cup contract, the company’s revenue has reached $15 million so far this year, compared with $20 million last year, Beig said. He declined to disclose the company’s net income but said the business was profitable.
“We are working with larger names that we would have never imagined we would,” he said. “The FIFA World Cup is the pinnacle. Working with the largest sporting event in the world is what we’re very proud of. I don’t think it gets any bigger than that.”
Volunteers line up to prepare to display the Canadian flag before a World Cup round of 32 knock-out match between Canada and South Africa at SoFi Stadium on Sunday.
(Kelvin Kuo / Los Angeles Times)
Dioz is among the many small businesses across Los Angeles that are getting a boost from the global sporting event, said Kevin Klowden, a senior fellow at the Milken Institute.
The influx of hundreds of thousands of fans into the city has been a boon to hotels, transportation services and restaurants, in addition to those in the special events and logistics economy, Klowden said, calling the event the “equivalent of multiple Super Bowls.”
“The number of contracts that are there, it’s a big deal,” he said. “Given the fact that L.A.’s filming is only slowly recovering, having something like the World Cup is definitely a boost.”
Dioz was co-founded by Johnny, 44, and his brother Tony in 2006. The brothers were born in India and raised in Australia, where Johnny enjoyed a brief career as a semi professional cricket player.
He realized his future wasn’t as a professional athlete, but he wanted to stay connected to the sports world, so he began making uniforms for his cricket team in 2006.
He then got a referral to make uniforms for multiple teams in the area before starting an apparel company.
“I wanted to stick with something I was passionate about, which is sports,” he said.
Volunteers unravel the center field display before a World Cup round of 32 knock-out match between Canada and South Africa at SoFi Stadium on Sunday.
(Ronaldo Bolanos / Los Angeles Times)
In 2012, Beig moved to Los Angeles and established Dioz‘s Los Angeles headquarters to tap into the U.S. market. During the pandemic, the company started supplying medical apparel to hospitals and schools, and the business took off, with revenue doubling in 2020, Beig said.
Dioz now has over 150 employees, including 15 in L.A., and manufactures its apparel at factories in China, India, Bangladesh, Turkey and the Philippines. Tony runs an office in Dubai.
Before the World Cup, Dioz provided employee uniforms for events including Super Bowl LIX and Copa America, which may have given it a leg up on the FIFA contact.
Now, with a World Cup contract on their resume, Beig said he’s setting his sights on even bigger events.
“This gives us an edge over the next FIFA events worldwide as well, where we can showcase our skills and we can handle it,” Beig said. “So it gives us a good opportunity to work with sporting events like the UEFA Championship and Premier League.”
As companies get new business from the World Cup, Klowden said it’s important that they leverage their new position to continue that growth.
Companies that benefited from the World Cup might be in a position to bid on even bigger contracts, especially with the Olympics coming up in 2028, Klowden said.
“The really important part in any of these deals is that if a company ran something like this, then they are able to build off of that success,” Klowden said. “Let’s say you’re a company that did a big uniform order or a big food order, and the World Cup goes, and you invested in new manufacturing capacity, or you invested in new clothing machines, or whatever you do; suddenly you don’t have that market anymore, then you’ve just wasted all that money ramping up.”
Business
Home insurer surcharges for wildfires is legal, judge rules
Surcharges that California homeowners have been hit with statewide by insurers defraying the costs of Los Angeles County’s wildfires were ruled legal in a decision released late Tuesday.
L.A. County Superior Court Judge Tiana Murillo turned down a petition by advocacy group Consumer Watchdog to halt the charges, which insurers began levying last year after the state’s insurer of last resort couldn’t pay all its January 2025 fire claims.
The California FAIR Plan, financially backed and operated by the state’s licensed home insurers, needed a $1-billion bailout from the insurers after it was hit with some $4 billion in claims.
Under a deal Insurance Commissioner Ricardo Lara worked out with the FAIR Plan in 2024, the insurers could seek state approval to surcharge their residential policyholders for up to half of any assessment totaling $1 billion in case the plan needed a bailout in an “extreme worst case scenario” — as it turned out it did.
A total of 105 insurers, including State Farm General — California’s largest home insurer — Farmers and Mercury sought and received approval for the surcharges.
Because the FAIR Plan assessed its member insurers based on their share of the state’s home insurance market, the policyholder surcharges were in the same ballpark. The median fee for homeowners was $28, according to the department of insurance.
The fee can be more or less according to the size of a homeowner’s premium and is split into monthly payments that insurers can spread over one or two years. Condo owners and renters on average were surcharged less.
In a court filing, Consumer Watchdog said $420 million in surcharges were approved.
In its April 2025 lawsuit filed against Lara, the Los Angeles group made a series of arguments in seeking to overturn the residential surcharges, which it deemed an industry bailout. It did not sue over related commercial surcharges.
Consumer Watchdog contended in its lawsuit that the surcharges violated Proposition 103 — the 1988 measure that governs insurer rate hikes — because the proposition does not allow for them.
It also claimed Lara did not follow regulatory protocol in promulgating the new policy.
The group further alleged that the FAIR Plan’s governing statutes do not give Lara the authority to permit the surcharges — and that the statutes require insurers to share in the plan’s profits and losses, and not shift losses to policyholders.
Murillo, and another judge who previously heard the case, turned down all of the consumer group’s arguments in separate rulings, the last of which Murillo issued Tuesday night.
Lara celebrated his legal victory over Consumer Watchdog, which has accused Lara of having close ties to insurers and sought to oust him from office. His terms ends in January.
“This victory sends a loud and clear message: The era of allowing special interests to derail consumer choice is over. We have the momentum, we have the authority, and we will continue to fight until every Californian has access to the coverage they deserve,” Lara said in a statement.
Attorney Will Pletcher, litigation director of Consumer Watchdog, said the group disagreed with the decision and would “consider all options to move this forward.”
“It’s important to try to protect California consumers from these surcharges that we think are in pretty clear conflict with both Proposition 103 and the FAIR Plan,” he said.
Hilary McLean, a spokesperson for the plan, said in a statement it did not have any position on the ruling, given the plan “does not have a role in determining how insurers manage costs associated with assessment.”
Denni Ritter, vice president of state government relations for the American Property Casualty Insurance Assn., a major industry trade group, said the decision rejected “the reckless lawsuit brought by the self-interested group Consumer Watchdog…”
“This ruling preserves a vital tool to protect the stability of the California insurance market. Blocking cost recovery would have undermined the state’s last-resort coverage option,” she said in a statement.
The 2024 policy was issued in response to the rapid growth of the plan due to a series of wildfires over the last decade that prompted multiple insurers to retreat from the state’s home insurance market.
The plan had 264,000 homeowners on its rolls in September 2022, a figure that rose to 452,0000 in the months before the fires — and its residential policyholders have since increased to 663,000 as of March.
The FAIR Plan offers policies that typically cost more than those issued by regular insurers while offering less coverage.
A Times analysis last year found that in the Palisades and Eaton fire zones, the plan’s rolls nearly doubled to 28,440 from 2020 to 2024.
That concentration of policyholders led to the plan’s large losses during the Jan. 7 wildfires, which damaged or destroyed more than 18,000 structures, killing at least 31 people.
It’s been estimated that the insured losses for the wildfires could ultimately total as much as $40 billion, exceeding any past wildfires worldwide. Ritter said that so far insurers have paid $23.7 billion in claims.
The 2025 wildfires were not the only time the FAIR Plan has needed a bailout, though it is the first time its member insurers surcharged policyholders.
In 1993, it assessed carriers after fires in Altadena and Malibu, and in 1994 it did so after the Northridge earthquake. The assessments totaled $260 million.
The plan received approval this year from the insurance department for a 29% rate increase for its homeowner dwelling policy that will take effect in October.
Business
First recorded Tesla Semi crash kills two people in Nevada
An electric Tesla Semi truck crashed into two vehicles in Dayton, Nev., over the weekend, killing two people and raising questions about the truck’s safety features.
The Lyon County Sheriff’s Office responded to a major collision around 7 a.m. on Sunday at the intersection of Highway 50 and Traditions Parkway about 40 miles east of Reno, the office said.
The office confirmed a semi-truck was involved in the accident, and footage of the scene shows it was a Tesla Semi.
It is the first known crash involving a Tesla Semi, an electric Class 8 truck that Tesla is building in Nevada and plans to ramp up production of. As interest in Tesla’s electric passenger vehicles wanes, the company is betting on the truck to give it a needed boost.
The trucks do not have the Full Self-Driving mode available in Tesla cars, but Tesla’s website says they come standard “with active safety features that pair with advanced motor and brake controls to deliver traction and stability in all conditions.”
According to the Lyon County Sheriff’s Office, preliminary statements obtained at the scene suggest the truck driver may have fallen asleep behind the wheel.
The crash is under investigation by the Nevada State Police Highway Patrol, which said additional information may be released next week.
The Record-Courier identified the victims as Sergio and Jennifer Villanueva, a couple who got married in 2022.
Tesla has not clarified if its semitruck has an automatic emergency braking system. Federal regulators are currently weighing a mandate for emergency braking systems in vehicles more than 10,000 pounds.
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