Tag Archives: Company Legal & Law Matters

Apple (mostly) loses its appeal in Epic Games case

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Apple has clawed back a bit of ground in its legal fight with Epic Games that could have wide-reaching consequences for all app developers. Today, the 9th U.S. Circuit Court of Appeals mostly upheld a previous contempt ruling regarding fees Apple levied on third-party payment systems. However, the judges did decide to reverse the order that Apple cannot charge any commissions on those external payments, which was one of the company's main arguments in this ongoing debate.   

To catch you up, US Judge Yvonne Gonzalez Rogers initially ruled in 2021 that Apple must allow third-party payment systems, although her decision fell shy of calling the tech company's control over the App Store a monopoly. In May 2025, she ruled that Apple's 27 percent commission on those outside payments violated her previous order. Apple responded with an emergency motion to appeal that finding. 

Epic Games had taken its smash hit Fortnite off both the Apple App Store and Google Play Store while it was in court arguing these cases. Fortnite returned to iOS in the spring and just arrived back on Android devices today.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/apple-mostly-loses-its-appeal-in-epic-games-case-235509557.html?src=rss

Disney’s deal with OpenAI is about controlling the future of copyright

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This morning Disney and OpenAI announced a three-year licensing agreement: Starting in 2026, ChatGPT and Sora can generate images and videos incorporating Disney IP, including more than 200 characters from the company's stable of Star Wars, Pixar and Marvel brands. To say these companies make for strange bedfellows is an understatement.  

The agreement brings together two parties with very different public stances on copyright. Before OpenAI released Sora, the company reportedly notified studios and talent agencies they would need to opt out of having their work appear in the new app. The company later backtracked on this stance. Before that, OpenAI admitted, in a regulatory filing, it would be "impossible to train today's leading AI models without using copyrighted materials." 

By contrast, Disney takes copyright law very seriously. In fact, you could argue no other company has done more to shape US copyright law than Disney. For example, there's the Sonny Bono Copyright Term Extension Act, which is more derisively known as the Mickey Mouse Protection Act. The law effectively froze the advancement of the public domain in the United States, with Disney being the greatest beneficiary. It was only last year that the company's copyright for Steamboat Willie expired, 95 years after Walt Disney first created the iconic cartoon.

On the face of it, it's unclear OpenAI is getting much value out of the deal. As part of the pact, Disney will host a "curated" selection of Sora-generated videos on its streaming platform Disney+, legitimizing the medium of AI-generated video in a way it hasn't been before, but it would appear Disney has the option to spotlight as much or little of it as it sees fit.

Additionally, the $1 billion Disney agreed to invest in OpenAI is a drop in the ocean for a company that's expected to burn through more cash in five years than Uber, Tesla, Amazon and Spotify did combined before they became profitable. If anything, the addition of Disney characters is likely to make operating ChatGPT and Sora more expensive for OpenAI; the company will now need to pay a licensing fee on top of the cost of running its servers to generate images and videos. At this stage, it's also hard to put a value on Disney's pledge to use OpenAI's APIs. The company has said those tools will "enable new products, tools and experiences," including some found inside of Disney+, but beyond that it hasn't shared specifics.

Bob Iger might be feckless, but he's not stupid. Sometime this week or soon after, President Trump is expected to sign an executive order that makes good on part of his AI Action Plan from July. Specifically, the president has promised to fight against "burdensome" state-level regulation of AI. According to CNN, a recent draft of Trump's order calls for the creation of an AI Litigation Task Force to challenge and preempt state AI laws in favor of the president's own more lax regulatory regime. 

It's unclear how successful the administration will be in that effort, but clearly Disney is thinking ahead. It's banking on the fact that this time it won't be able to count on the federal government to shape copyright law in its interest, so instead it's making a deal with an industry pushing the boundaries of intellectual property rights as we know them. More importantly, it has partnered with the one AI company it can actually leverage. 

As I argued in a recent piece, OpenAI is in a far different and more precarious position now than it was at the end of 2022 following the release of ChatGPT. The company is just one AI provider in a sea of competition, and you can't even argue its models are the best, based either on benchmarks or user feedback. Moreover, OpenAI has yet to turn a profit, and has adopted an extremely risky investment strategy. In recent months it has signed more than $1.4 trillion worth of infrastructure deals, hoping to outmuscle the competition that's already beating it through scale.  

It's not an accident Disney sent a cease-and-desist letter to Google a day before its agreement with OpenAI became public. OpenAI might be the most valuable private company in the world, but Alphabet, Google's parent company, is worth more than $3 trillion. In any negotiations between the two, at best Disney would be on equal footing, and certainly not in a position where it could demand some amount of control over Google's AI projects. 

And yet by accounts it won exactly that from OpenAI. According to Axios, the deal gives Disney a fair amount of control over how its intellectual property is used. The two will form a joint steering committee designed to monitor the content users create on ChatGPT and Sora. As you surf the web today, you'll likely see a lot of opinions on how this legitimizes AI video. And while that's true, far more important is the fact Disney has secured a seat at the table to decide how the technology evolves over the coming years. 

Much like with news publishers, OpenAI and other chatbots concerns took a stance of begging forgiveness rather than asking permission towards copyright. It seems to have paid off. Most of the highest-profile news organizations have signed licensing deals to at least be paid a little rather than be ripped off until reaching an uncertain verdict in court. Disney seems to be signalling that the same speculation rush is about to begin for audiovisual licensing, and it may have already secured the most favorable terms. 

This article originally appeared on Engadget at https://www.engadget.com/ai/disneys-deal-with-openai-is-about-controlling-the-future-of-copyright-213009504.html?src=rss

The New York Times and Chicago Tribune sue Perplexity over alleged copyright infringement

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The New York Times and the Chicago Tribune have filed separate lawsuits against Perplexity over alleged copyright infringement. The Times said it had sent Perplexity several cease-and-desist demands to stop using its content until the two reached an agreement, but the AI company persisted in doing so. 

In the lawsuit [PDF], the Times accused Perplexity of infringing on its copyrights at two main stages. First, by scraping its website (including in real time) to train AI models and feed content into the likes of the Claude chatbot and Comet browser. Second, in the output of Perplexity's products, with the Times accusing the company’s generative AI products of often reproducing its articles verbatim. The Times also says Perplexity damaged its brand by falsely attributing completely fabricated information (aka hallucinations) to the newspaper.

The Chicago Tribune also filed a lawsuit against Perplexity for similar reasons. "Perplexity’s genAI products generate outputs that are identical or substantially similar to the Chicago Tribune’s content,” the newspaper claimed in its suit. “Upon information and belief, Perplexity has unlawfully copied millions of copyrighted Chicago Tribune stories, videos, images and other works to power its products and tools."

These lawsuits are the latest in dozens of legal cases involving copyright holders and AI companies in the US. The Times, for instance, previously sued OpenAI and Microsoft. It accused the companies of training their large language models on millions of its articles without permission. That case is ongoing.

Copyright holders have licensed their content to AI companies in some cases, though. OpenAI has struck multiple deals with media companies. The Times and Amazon reached an agreement this year that's said to be worth as much as $25 million per year to the media company.

This article originally appeared on Engadget at https://www.engadget.com/ai/the-new-york-times-and-chicago-tribune-sue-perplexity-over-alleged-copyright-infringement-153656431.html?src=rss

iam8bit is suing Skybound Game Studios alleging fraud and theft of designs

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Skybound Game Studios is being sued by indie outfit iam8bit over fraud and breach of contract, including the theft of original designs. Skybound Entertainment, the parent company of Skybound Game Studios, is chaired by Robert Kirkman, who may be best known for creating the original comic book of The Walking Dead. We've reached out to Skybound for comment on the lawsuit but have not received a response as of publication.

iam8bit is a video game producer as well as a merchandise operation selling vinyl soundtracks and other geek gear. The company entered into a partnership with Skybound Game Studios in April 2021. Since then, iam8bit alleges that Skybound conducted a multi-year accounting scheme and failed to provide accurate financial reports for the partnership each month. "Skybound failed to provide the monthly reports as agreed," the Los Angeles Superior Court complaint reads. "It also padded its expenses with millions of dollars in fake line items." iam8bit claims Skybound has yet to explain the line items, even to a third-party auditor that it engaged. The company is alleging more than $4 million in damages related to the accounting issues. 

iam8bit also accused Skybound of cutting it out of a deal regarding indie video game Stray. According to the company's counsel, iam8bit designed and developed promotional materials for the launch of Stray on PlayStation and Xbox consoles. The complaint claims that Skybound used trade secrets from iam8bit to secure its own deal for the Nintendo launch of the game. It alleges Skybound used confidential information about iam8bit’s royalty split with publishing Annapurna Interactive to cut out its business partner, while also using “almost exact copies” of its creative output for marketing.

The full list of allegations in iam8bit's complaint include breach of contract, fraud, conversion, unjust enrichment and misappropriation. The company's legal team is seeking monetary damages, punitive damages and attorneys' fees in compensation.

This article originally appeared on Engadget at https://www.engadget.com/gaming/iam8bit-is-suing-skybound-game-studios-alleging-fraud-and-theft-of-designs-000822886.html?src=rss

Tencent agrees to stop promoting its Horizon ripoff during Sony lawsuit

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Tencent has agreed to stop promoting and publicly testing Light of Motiram as a lawsuit with Sony works its way through the courts, according to a report by TheGamePost. This is Tencent's game that looks suspiciously similar to Sony's Horizon franchise, so much so that Sony sued the publisher.

Sony wants the court to block the game from sale entirely, but as the case continues Tencent has agreed to keep Light of Motiram out of the spotlight. The company submitted a court filing that says there will be "no new promotion of public testing" of the game as Sony's injunction request is argued. In return, Sony will give Tencent more time to respond to the injunction.

Tencent has also issued a request to dismiss the lawsuit entirely. Both companies have jointly requested that the injunction request and the motion to dismiss be moved to the same day, which could be as early as January.

For the uninitiated, Light of Motiram is an open-world hunting game that has some obvious similarities to Horizon Zero Dawn and its sequel. The basic setup is similar, as is the visual appearance of the characters and marketing materials. This all caused Sony to refer to it as a "slavish clone" in the lawsuit.

Image from suit.
Sony

To be fair, there are differences. The Horizon games are third-person adventures in the mold of Zelda, but Light of Motiram looks to be primarily a cooperative survival game.

Tencent is a giant multi-tentacled company that actually owns Riot Games, Supercell and Funcom. It also has investment stakes in Epic, Ubisoft, Activision and Blizzard and Larian Studios, among many others. 

This article originally appeared on Engadget at https://www.engadget.com/gaming/tencent-agrees-to-stop-promoting-its-horizon-ripoff-during-sony-lawsuit-193043644.html?src=rss

OpenAI can’t use the term ‘Cameo’ in Sora following temporary injunction

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Cameo, the app that allows people to buy short videos from celebrities, has won an important victory in its legal battle against OpenAI. On Monday, a federal judge granted the company a temporary restraining order against OpenAI, CNBC reports. Until December 22, the startup is not allowed to use the word “cameo” in relation to any features inside of Sora, its TikTok-like app for creating AI-generated videos. The order covers similar words like “Kameo” and “CameoVideo.”

“We are gratified by the court’s decision, which recognizes the need to protect consumers from the confusion that OpenAI has created by using the Cameo trademark,” Cameo CEO Steven Galanis told CNBC. “While the court’s order is temporary, we hope that OpenAI will agree to stop using our mark permanently to avoid any further harm to the public or Cameo.”

An OpenAI spokesperson told Engadget: “We disagree with the complaint’s assertion that anyone can claim exclusive ownership over the word ‘cameo’, and we look forward to continuing to make our case to the court.”

Cameo sued OpenAI in October, claiming the company’s use of the term was likely to confuse consumers and dilute its brand. Before filing the suit, Galanis said Cameo tried to resolve the dispute “amicably,” but claims OpenAI refused to stop using the name. Sora’s cameo feature allows users to upload their likeness to the app, which other people can then use in their own videos. US District Judge Eumi K. Lee, who granted Cameo the temporary junction, has scheduled a hearing for December 19 to determine if the order should be made permanent.

Update, November 24, 7:25PM ET: This article was updated after publish to include comment from an OpenAI spokesperson.

This article originally appeared on Engadget at https://www.engadget.com/ai/openai-cant-use-the-term-cameo-in-sora-following-temporary-injunction-213431626.html?src=rss

Meta allegedly buried research showing its products are harming users

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Meta allegedly suspended internal research into the mental health effects of its products after it showed that people who stopped using Facebook experienced less depression, anxiety and loneliness. This comes from unredacted court filings in a lawsuit filed by multiple US school districts against major social media companies, as reported by Reuters. The suit alleges that these companies had knowledge of the health risks posed by these platforms but intentionally hid this from users.

Meta started the research project, dubbed "Project Mercury," in 2020. The company's scientists worked with survey firm Nielsen to investigate what effect, if any, "deactivating" Facebook had on its users. The suit alleges that when this research showed mental health benefits to quitting Facebook, Meta shut down the project, chose not to publish the results and decreed the findings tainted by “existing media narrative” surrounding the company.

According to Reuters, the filings also showed internal research staffers clearly expressing that the findings had merit, writing “the Nielsen study does show causal impact on social comparison.” Another compared the findings to the tobacco industry “doing research and knowing cigs were bad and then keeping that info to themselves.” The allegations call to mind the now well-known decisions by Shell and Exxon to bury internal research connecting fossil fuels with catastrophic climate change as far back as the 1980s.

In a statement obtained by Reuters, a Meta spokesperson said, “the full record will show that for over a decade, we have listened to parents, researched issues that matter most, and made real changes to protect teens." The statement touted the company's Instagram Teen Accounts and said, "We strongly disagree with these allegations, which rely on cherry-picked quotes and misinformed opinions.”

Meta is arguing to strike the documents underlying these allegations, which are not yet public, claiming the nature of what plaintiffs want to unseal is overly broad. These lawsuits, filed by hundreds of school districts, are being consolidated and handled in the Northern District of California, with a hearing regarding this particular filing set for January 26.  

This isn't even the first time the company has been accused of burying research that yielded inconvenient results. In 2023 Meta also faced a massive lawsuit from 41 states as well as the District of Columbia over allegations that its platforms harm and addict young users. A judge in that case ruled that Meta's lawyers tried blocking internal research showing its social media platforms were harmful to teen mental health.

There is growing concern surrounding the effects of social media on mental health, particularly for children. Today Malaysia joined a growing list of countries including Denmark and Australia in a plan to ban social media for underage users.

This article originally appeared on Engadget at https://www.engadget.com/social-media/meta-allegedly-buried-research-showing-its-products-are-harming-users-152236073.html?src=rss

A decision about breaking up Google’s adtech monopoly is on the horizon

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Google made its final arguments in a longstanding case against the US Department of Justice on whether it has to split up its ad tech practices. However, the judge presiding over the case may be looking to wrap up the case before Google has a chance to appeal, according to a report from Reuters. 

On Friday, both sides made their closing statements in the lawsuit where the Justice Department accused the tech giant of illegally monopolizing the ad tech market. While the US District Court Judge Leonie Brinkema ruled in April that Google held a monopoly in the online adtech space, the judge recently asked the Justice Department how quickly an anticompetitive measure could go into effect, adding that "time is of the essence."

Google's attorney, Karen Dunn, argued that forcing Google to sell its advertising tech subsidiary would be extreme and hurt customers in the process, according to the report. Google is also reportedly planning to appeal the latest decision. According to Reuters, Brinkema noted that any sort of remedy "most likely would not be as easily enforceable while an appeal is pending," meaning that Google could delay the forced sale until the appeal is concluded. At the same time, Google is facing a $3.5 billion fine for violating the European Union's antitrust laws within the adtech industry.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/a-decision-about-breaking-up-googles-adtech-monopoly-is-on-the-horizon-184409011.html?src=rss

Tesla wins bid to decertify class action lawsuit alleging racial discrimination

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Tesla has secured a ruling to strip a 2017 lawsuit claiming a racist work environment of its class-action status, as reported by Reuters. California Superior Court Judge Peter Borkon, appointed by Gov. Gavin Newsom in 2021, ruled that the lawsuit could not proceed with class-action status because the plaintiffs' attorneys had failed to find 200 class members willing to testify. The judge said he could not assume that the experiences of a select group of workers could be applied to the entire class of would-be plaintiffs.

The 2017 lawsuit began with a single employee who filed suit alleging Tesla's Fremont production floor was a "hotbed for racist behavior," and that over 100 employees had experienced racial harassment.

In 2024, a lower court judge ruled the case could move forward as a class action, a decision that Tesla had been appealing since. A trial in the case was scheduled to begin in April, though now that the case has lost its class-action status, each plaintiff would have to bring their case against Tesla separately.

This is not the first time that Tesla has found itself in court over alleged racial misconduct. In 2023, the automaker was sued by the US Equal Employment Opportunity Commission over allegations that Black employees were subjected to racial slurs and retaliation.

Last year, Tesla reached a confidential settlement with a single employee who said he faced discrimination at the same California plant, reporting that his coworkers left drawings of swastikas and racist figures on his workspace.

This article originally appeared on Engadget at https://www.engadget.com/transportation/evs/tesla-wins-bid-to-decertify-class-action-lawsuit-alleging-racial-discrimination-191256294.html?src=rss

A federal jury ruled that Apple has to pay $634 million for infringing smartwatch patents

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In a longstanding and complicated legal battle between Apple and Masimo, a recent ruling from a California jury may be the first step towards a certain conclusion. As reported by Reuters, a federal jury sided with Masimo, a medical tech company known for its patient monitoring devices, when it said that Apple infringed on the company's patent for technology that tracks blood-oxygen levels.

The case revolves around whether Apple violated Masimo's patent related to blood-oxygen sensors, which the jury claimed can be seen with the Apple Watch's Workout and Heart Rate apps. According to Reuters, Apple disagreed with the verdict, adding that "the single patent in this case expired in 2022, and is specific to historic patient monitoring technology from decades ago." The tech giant is reportedly planning to appeal the decision. 

While there may be some closure with this California lawsuit, Apple and Masimo are entangled in a web of related but separate lawsuits. Masimo first accused Apple of infringing on its pulse oximeter patents, leading to Apple temporarily halting sales of its Series 9 and Ultra 2 smartwatches. In August, Apple redesigned its blood-oxygen monitoring feature and rolled it out to the Series 9, Series 10 and Ultra 2. The redesign was approved by the US Customs and Border Protection, but Masimo filed a suit against the agency for overstepping its authority by allowing the sale of these updated Apple Watches without input from Masimo.

This article originally appeared on Engadget at https://www.engadget.com/wearables/a-federal-jury-ruled-that-apple-has-to-pay-634-million-for-infringing-smartwatch-patents-202846266.html?src=rss