Court Holds Indian Copyright Act Applies Despite Servers Abroad; Denies Interim Injunction Against Open AI, Emphasizing Public Interest and Transformative Use
In a landmark judgment delivered on July 24, 2026, the Delhi High Court, presided by Justice Amit Bansal, addressed pivotal issues surrounding artificial intelligence, copyright infringement, and jurisdiction in the case of ANI Media Pvt. Ltd. versus Open AI Opco LLC. The plaintiff, ANI, had filed a suit alleging that Open AI unlawfully used ANI’s copyrighted news articles to train its Large Language Models (LLMs), including ChatGPT, without authorization, amounting to copyright infringement.
The Court undertook a thorough examination of the technical functioning of LLMs, explaining how Open AI collects vast publicly available textual data, processes it through tokenization and vectorization, and trains AI models to generate responses. ANI's claim encompassed two main allegations: unauthorized copying and storage of ANI’s data for training (“training claim”) and reproduction of ANI’s works in ChatGPT’s output (“reproduction claim”).
A foundational issue was the Court’s territorial jurisdiction, challenged by Open AI on grounds that its servers and training processes were located outside India. The Court rejected this argument, holding that under Section 62(2) of the Indian Copyright Act, 1957 and Section 20 of the Civil Procedure Code, the Delhi High Court has jurisdiction because ANI’s principal place of business lies within its territory and Open AI targets Indian users. The Court underscored that locating servers abroad does not oust Indian jurisdiction, especially when the alleged infringing activities occur within India.
On the substantive allegations of infringement, the Court examined whether Open AI’s temporary or permanent storage of ANI’s copyrighted works during training amounts to infringement under Section 14(a)(i) of the Copyright Act, which confers exclusive reproduction rights including electronic storage. However, the Court held that such storage and use fall within the “fair dealing” exception under Section 52(1)(a) of the Act, which permits fair dealing for private or personal use, including research.
Applying a two-step test—the purpose test and the fairness test—the Court found that Open AI’s use qualifies as private use including research. The Court emphasized that the commercial nature of Open AI’s operations does not automatically negate fair dealing, noting that the statute excludes commercial use only in specific provisions, and Section 52(1)(a) does not limit the exception to non-commercial use.
Further, the Court examined ANI’s reproduction claim, assessing whether ChatGPT memorized and regurgitated ANI’s copyrighted works. ANI failed to demonstrate substantial or verbatim reproduction as the ChatGPT outputs either predated ANI’s publication dates or were generated using the Retrieval-Augmented Generation (RAG) technique, which references external sources rather than the training data. The Court found no prima facie case of infringement on this basis.
The Court also weighed the balance of convenience and irreparable injury, noting that granting an interim injunction would harm public interest by impeding AI development in India and affecting millions of ChatGPT users. ANI was found to have remedies through monetary compensation if successful at trial and had the option to block web crawling of its content, which it had not exercised.
Conclusively, the Court dismissed ANI’s application for interim injunction, declaring Open AI’s storage and use of ANI’s copyrighted works for AI training protected under the fair dealing exception of Section 52(1)(a) of the Indian Copyright Act. The judgment recognizes the necessity of adapting copyright laws to emerging AI technologies while balancing creators' rights and public interest.
Bottom Line:
Copyright Act - Storage and use of copyrighted literary works by Open AI for training its Large Language Models (LLMs) including ChatGPT falls under fair dealing exception under Section 52(1)(a) of the Indian Copyright Act, 1957, and does not amount to copyright infringement; the Court has territorial jurisdiction to entertain the suit despite servers being located outside India.
Statutory provision(s): Copyright Act, 1957 Sections 14, 17, 51, 52, 62; Civil Procedure Code, 1908 Section 20
ANI Media Pvt. Ltd. v. OPEN AI OPCO LLC, (Delhi) : Law Finder Doc id # 2947227
