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In what is the first case of its kind in Canada, they argue OpenAI is breaching copyright by scraping large amounts of content from Canadian media, and then profiting from the use of that content without permission or compensation.

OpenAI is challenging the jurisdiction of the Ontario Superior Court to hear the case, arguing the company isn’t located in Ontario and doesn’t do business in the province. It’s headquartered in San Francisco and the court documents note all of the companies’ subsidiaries were “incorporated or formed under the laws of Delaware.”

OpenAI says in a court filing that “the alleged conduct — namely, the training of AI models and the automated crawling of web content — occurred entirely outside Ontario.”

OpenAI is arguing the Copyright Act doesn’t apply to activities that occurred outside Canada and the case should be heard in the United States.

“Canadian copyright law does not apply to extraterritorial conduct,” it says in its submission. “The fact that the Plaintiffs are located in Canada or that some of their websites are hosted on servers in Canada is immaterial to the extraterritorial conduct alleged.”

In their filing, the news publishers say the case should proceed in Ontario. They argue there is a “real and substantial connection to Ontario” and that they deliver the “vast majority” of journalistic content in Ontario and Canada.

“The News Media Companies are each Canadian owned or controlled, with their headquarters in Ontario,” the document states.

It argues the news content “is property that was largely created in Ontario, is owned by companies based in Ontario, and resides in significant part in Ontario,” and that much of OpenAI’s “scraping” of that online content happened in the province.

Many of the arguments in case are technical and revolve around factors like the locations of servers and whether a protocol used to disallow web crawling is a technological protection measure under the Copyright Act.

But the news publishers also argue the case involves bigger questions.

“Aside from being wrong in law, adopting OpenAI’s arguments and defining digital jurisdiction based solely on what they say is their lack of physical presence in the jurisdiction would mean Canada giving up jurisdiction over a large part of its digital economy,” their court document says.

They call that a “sobering prospect, particularly in the context of news media and its importance to Canadian sovereignty.”

OpenAI, in turn, accuses the news publishers of politicizing the case. It says their court filing “improperly invokes themes such as national sovereignty and the importance of journalism.”

“These hyperbolic submissions are irrelevant to the jurisdictional issues,” the company says. “Copyright’s territorial nature does not raise sovereignty concerns and attempts to politicize the motion through appeals to sentiment should be rejected as distractions from the legal issues.”

The lawsuit, which was launched last year, is the first Canadian case to address the practice of using copyrighted content to train generative AI systems.

Multiple lawsuits dealing with AI systems and copyright are underway in the United States, some dating back to 2023. While AI companies won victories in two of those cases in June, U.S. courts have not yet set a clear precedent on the wider question.

OpenAI notes in its document that the “the permissibility of training AI models on copyright-protected works is an active issue before the U.S. courts.”

It says in a partially-redacted section of the filing that if U.S. courts were to decide such use is lawful — by, for instance, determining that it falls under the fair use doctrine — “it would be problematic for this Court to reach a contrary conclusion under Canadian law.”

The news publishers disagree and say there is no risk of conflicting decisions.

“The consideration under this factor is whether different courts may reach conflicting decisions in respect of the particular facts of this case, not whether courts in the U.S. and Canada may apply their respective jurisprudence to reach different conclusions on novel legal issues,” says their filing.