MUNICH, Nov 11 (Reuters) - A German court on Tuesday

sided with the country's music rights society GEMA in a closely

watched copyright case against U.S.-based artificial

intelligence firm OpenAI.

The court in Munich ruled that OpenAI could not use song

lyrics without a license and presiding judge Elke Schwager

ordered the firm to pay damages for the use of copyrighted

material.

GEMA had argued OpenAI's chatbot ChatGPT reproduces lyrics

from copyrighted German songs without authorisation, and that

its AI was trained on protected content from the repertoire of

its roughly 100,000 members, who include best-selling musician

Herbert Groenemeyer.

OpenAI responded by saying that GEMA's arguments reflected a

misunderstanding of how ChatGPT works.

The case could set a precedent for how generative AI

systems are regulated in Europe. GEMA is seeking the

establishment of a licensing framework that would require AI

developers to pay for the use of musical works in both training

and output.

The decision can be appealed. OpenAI and GEMA said they

would issue statements on the verdict later on Tuesday.