Predictions are possible.

Zachary H. Valentine, “New York Times vs. OpenAI: Fair Use Fight with Billions at Stake,” DarrowEverett LLP, 01-22-2024, https://www.darroweverett.com/new-york-times-vs-open-ai-fair-use-legal-analysis/

We will be following this case on the edge of our seat. The Times’ arguments, taken in isolation, are highly convincing that a plethora of infringements occurred, and that OpenAI’s commercialized use and reproduction of copyrighted material was not fair use. While OpenAI and Microsoft have not yet filed an answer or responsive motion to the Complaint (as of the date of this article), it is anticipated that their fair use arguments will focus on the GPT-powered products’ transformative use of the copyrighted material as a whole — or, in other words, that the use of the copyrighted material by the LLMs to create the GPT tools that serve myriad non-infringing purposes — and the lack of GPT-powered products being a market substitute for prospective and existing subscribers of the Times.

Ultimately, this case will likely come down to the “single most important element” of fair use, whether the GPT-powered products serve as a market substitute for the Times’ copyrighted content. In other words, the courts will likely focus heavily on the fourth factor of the fair use analysis. While OpenAI and Microsoft may have a meritorious fair use defense, especially in the Southern District of New York where the Google case is binding precedent, ultimately, it may not be compelling enough to prevail. Indeed, it is true that the challenged products have the capability to reproduce copyrighted material nearly verbatim in response to tailored, specific prompts. While there are likely myriad other ways the GPT-powered products can engage in a “transformative use” of the Times’ copyrighted articles to augment a user’s knowledge, for example, by offering summaries or analyses of, or commentary upon, the Times’ articles, which may be taken into account by the court, the challenged use — the ability to reproduce large, verbatim excerpts of Times works to bypass a paywall, is not likely to be considered to be transformative. As the Court recognized in the Andy Warhol Foundation for the Visual Arts case, a fair use analysis focuses “on the specific use alleged to be infringing.” 598 U.S., ___ (slip op. at 37).