April 4 (Reuters) - The New York Times ( NYT ) made its

case, for now, that OpenAI and its most prominent financial

backer Microsoft ( MSFT ) were responsible for inducing users to

infringe its copyrights, a New York federal judge said in a

court opinion on Friday explaining an order from March 26.

U.S. District Judge Sidney Stein, whose three-page order

last week rejected parts of OpenAI and Microsoft's ( MSFT ) motion to

dismiss, said in Friday's decision that the Times' "numerous"

and "widely publicized" examples of ChatGPT producing material

from its articles justified allowing the claims to continue.

The Times sued OpenAI and Microsoft ( MSFT ) in 2023, accusing them

of using millions of its articles without permission to train

the large language model behind its popular chatbot ChatGPT.

The case is one of several brought by copyright owners such

as authors, visual artists and record labels alleging that tech

companies including OpenAI, Microsoft ( MSFT ) and Meta Platforms ( META ) used

their material without permission to train AI systems.

Stein's decision also rejected OpenAI's argument that some

of the newspaper's direct infringement claims were time-barred

but dismissed some of the Times' related claims, such as

allegations of unfair competition.

When asked for comment, an OpenAI spokesperson referred to a

previous statement that said the company's models "empower

innovation and are trained on publicly available data and

grounded in fair use."

Judges are beginning to consider whether the tech companies

are immune from the main allegations based on U.S. copyright

law's fair use doctrine, which allows for the unauthorized use

of copyrighted works in some circumstances. OpenAI and Microsoft ( MSFT )

asked Stein to dismiss some of the Times' claims last year on

other grounds.

Stein allowed the Times to continue pursuing claims that

OpenAI's output contained copyrighted material and led to user

infringement, breaking with California judges who have dismissed

related allegations. Stein also denied OpenAI's bid to dismiss

infringement claims based on AI training from 2019 and 2020,

rejecting OpenAI's argument that they failed to meet a

three-year statute of limitations.

"All of our copyright claims will continue against Microsoft ( MSFT )

and OpenAI for their widespread theft of millions of The Times's

works, and we look forward to continuing to pursue them," The

New York Times ( NYT ) said in a statement.

Attorneys and spokespeople for Microsoft ( MSFT ) did not immediately

respond to a request for comment.

The case is The New York Times Co ( NYT ) v. Microsoft Corp ( MSFT ), U.S.

District Court for the Southern District of New York, No.

1:23-cv-11195.

For the Times: Ian Crosby, Davida Brook, Elisha Barron,

Genevieve Wallace and Katherine Peaslee of Susman Godfrey;

Steven Lieberman and Jennifer Maisel of Rothwell Figg Ernst &

Manbeck

For OpenAI: Andy Gass, Joe Wetzel, Sy Damle and Alli

Stillman of Latham & Watkins; Joseph Gratz, Allyson Bennett and

Rose Lee of Morrison & Foerster; Bob Van Nest of Keker, Van Nest

& Peters

For Microsoft ( MSFT ): Annette Hurst and Chris Cariello of Orrick

Herrington & Sutcliffe; Jeffrey Jacobson of Faegre Drinker

Biddle & Reath

Read more:

NY Times sues OpenAI, Microsoft ( MSFT ) for infringing copyrighted

works

OpenAI copyright lawsuits from authors, New York Times ( NYT )

consolidated in Manhattan

(Reporting by Blake Brittain in Washington)