OpenAI faces an uphill battle as it argues that Indian courts cannot hear lawsuits related to its American business in a country where Telegram failed with similar defenses, and American tech companies face government pressure to comply with regulations.
OpenAI, which views India as its second-largest market with millions of users, is embroiled in a tense legal battle initiated by domestic news agency ANI over alleged use of copyrighted content.
The case has garnered attention in recent weeks as book publishers and media groups, including billionaires Gautam Adani and Mukesh Ambani, have united to oppose OpenAI in the case.
OpenAI, facing new challenges from breakthrough cheap AI-driven computing from Chinese startup DeepSeek, claims that it creates its AI models using publicly available information in line with fair use principles. The company is also facing similar copyright infringement lawsuits in the U.S., Germany, and Canada.
Details of OpenAI's legal disputes in other markets are unknown, but in New Delhi, it is fighting ANI's claim, stating in court filings that its terms of use require disputes to be resolved solely in San Francisco and that the company is beyond the jurisdiction of Indian courts and "has no servers or data centers" in the country.
"This is an argument from the internet age, which won't pass in Indian courts today," said Dharmendra Chatur, partner at Poovayya & Co., which advises foreign tech companies. "Google, X, Facebook provide services through their foreign companies and are parties to lawsuits across India," Chatur added, explaining that courts typically assess whether a website is accessible and offers services to customers in India when deciding the issue.
OpenAI did not respond to Reuters' requests for comment on this article. Its lawyer in India, Amit Sibal, declined to comment, citing ongoing legal proceedings.
Six other lawyers and two appointed court experts in OpenAI's case, Arul George Skaria and Adarsh Ramanujan, stated that Indian judges could hear the case.
"Clearly, OpenAI is making its interactive services available to users in India," Skaria wrote in his January 25 filing to the court, which was not made public but was reviewed by Reuters.
OpenAI's website shows that it collects an 18% Indian tax on paid offerings, and it recently stated that there has been a "massive uptake of ChatGPT" in the critical market.
In the case of OpenAI-ANI, a complete victory on jurisdiction would mean that OpenAI would not have to face a copyright lawsuit in India. If it loses this argument, it will have to contest ANI's demand to remove training data and pay $230,000 in damages.
The Delhi court intends to hear the case next in February on jurisdiction and other arguments.
Responding to questions about the lawsuit, Reuters, which owns 26% of ANI, stated that it is not involved in ANI's business practices or operations.
"FOREIGN DEFENDANT"
Fighting for the power of Indian courts, lawyers and appointed court expert Skaria referred to a 2022 ruling involving Telegram as a legal precedent.
An Indian author sued Telegram for leaking her copyrighted works, which appeared in Telegram groups, but the company refused to share details, stating that it is regulated under laws in Dubai, where it is based, and has servers outside India.
Telegram disclosed details after a judge in Delhi ruled: "There are no longer any universally accepted concepts of territoriality... (Telegram's decision) not to place its servers in India cannot deprive Indian courts of the ability to adjudicate copyright disputes."
The court did not impose a penalty.
However, OpenAI argues that there is a 2009 Indian legal precedent stating that merely having an app or website available there does not mean courts can assert jurisdiction "over a foreign defendant."
Even if OpenAI’s jurisdiction argument cannot block the lawsuit initially, an Indian intellectual property lawyer said it might help the company later prove that a court order needs to be enforced abroad. The lawyer declined to be named due to the sensitivity of the issue.
Although Prime Minister Narendra Modi’s government is not a party in OpenAI’s lawsuit, it has had a love-hate relationship with Big Tech.
India’s IT minister in 2021 mentioned American tech companies and remarked about their "stance of 'I will be governed only by U.S. laws'... this is clearly unacceptable."
In the most intense public showdown of that year, Twitter, now X, refused to comply with orders to remove certain content, and the government issued a press release titled "Twitter Must Comply with Laws of the Land."
Later, the company agreed but sued New Delhi. The case is ongoing.
Even before legal troubles arose in India, OpenAI CEO Sam Altman was planning a visit to India on February 5. An email shows that two other top executives, James Hurston and Srinivas Narayanan, are also planning to be in India.
"India is really important... we're seeing massive adoption of ChatGPT," said OpenAI's India executive director Pragya Misra last year.