News Corp. v. Perplexity AI

News Corp sues AI startup Perplexity for “massive illegal copying” of its journalistic content, accusing it of free-riding on copyrighted news articles.

Short Description

News Corp subsidiaries—Dow Jones & Company (owner of The Wall Street Journal and Barron’s) and NYP Holdings, Inc. (owner of The New York Post)—filed a lawsuit in the U.S. Southern District of New York. The complaint alleges that Perplexity AI’s “answer engine” ingests and uses their copyrighted articles without permission, diverting traffic and revenue. The suit seeks removal of content, an injunction, statutory damages up to $150,000 per work, and claims for false designation and trademark dilution. Perplexity’s attempt to dismiss or transfer the case was denied. The dispute raises core questions about AI, copyright, and fair use in digital journalism.

Facts

1.     News Corp entities filed the lawsuit in October 2024, accusing Perplexity AI of “massive illegal copying” of their contents via its AI search engine

2.     The suit targets Perplexity’s “answer engine,” alleging it repurposes proprietary news content—analysis and opinion—into AI responses, allowing users to “skip the links” and bypass publishers’ sites

3.     The plaintiffs claim Perplexity is engaging in unfair competition by "freeriding" on their content, harming traffic and revenue streams

4.     The complaint includes claims for copyright infringement, false designation of origin, and trademark dilution, demanding injunctive relief, destruction of infringing databases, and damages—up to $150,000 per instance plus profits

5.     Perplexity’s motion to dismiss or transfer jurisdiction out of New York was denied, confirming the court’s authority to proceed

6.     Perplexity responded via a blog, calling the suit "short-sighted" and defending its practices as transformative and fair use, noting it is open to revenue-sharing deals similar to those with other publishers

Findings

• The court found New York has jurisdiction, rejecting Perplexity’s arguments to dismiss or transfer the case

• News Corp’s amended complaint broadens claims to include not only copyright infringement but also trademark and false-origin allegations

• Perplexity’s defense emphasizes fair use and transformative value, while also pointing to ongoing revenue-sharing programs with other media partners

Suggestions (Legal Significance)

• This case challenges how AI tools use copyrighted journalism—whether their use of news content falls under fair use or oversteps into infringement territory.

• Courts will weigh factors like transformation, impact on market value, and attribution needs.

• Outcomes may set important precedents for AI-driven media services and how publishers are compensated.

• Broader implications for IP law in AI: fair use boundaries, licensing frameworks, and precedents for future disputes.

Judgment / Status

• No final judgment yet.

• Case is active in the Southern District of New York, under case number 24-cv-7984-KPF, filed December 11, 2024 (as amended)

• Litigation is ongoing; next steps include potential discovery, summary judgment motions, or settlement discussions.