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French Publishers and Authors Sue Meta for Alleged Copyright Infringement in AI Training

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France’s leading publishing and authors’ associations have filed a lawsuit against Meta, accusing the U.S. tech giant of using copyrighted content without permission to train its artificial intelligence (AI) systems. The lawsuit was filed earlier this week in a Paris court, with the plaintiffs alleging copyright infringement and economic “parasitism.”

The groups behind the lawsuit include the National Publishing Union (SNE), the National Union of Authors and Composers (SNAC), and the Society of Men of Letters (SGDL), which represent authors and publishers in France. They argue that Meta, the parent company of Facebook, Instagram, and WhatsApp, has been illegally using copyright-protected material to enhance its AI models.

Maia Bensimon, general delegate of SNAC, described the actions as a form of “monumental looting.” Renaud Lefebvre, Director General of SNE, referred to the lawsuit as “David versus Goliath,” emphasizing that the legal action aims to set a precedent for the protection of copyright in the face of rapidly advancing AI technologies.

This lawsuit marks the first of its kind in France against an AI giant, though similar legal actions are already underway in other countries, particularly in the United States. In 2023, Sarah Silverman, an American actress and author, along with other plaintiffs, sued Meta for allegedly misusing their works to train its Llama language model. Other authors, including Christopher Farnsworth, have also filed lawsuits against Meta for similar claims.

In addition to Meta, OpenAI, the creator of ChatGPT, faces similar copyright lawsuits in the United States, Canada, and India over the data used to train its generative AI systems.

EU Files Complaint Against China Over High-Tech Patent Royalties at WTO

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The European Commission has filed a formal complaint with the World Trade Organization (WTO) against China, accusing the country of “unfair and illegal” practices regarding the setting of global royalty rates for European Union (EU) standard essential patents (SEPs). This dispute centers on the pressure placed on European tech companies, particularly those in the telecom sector, to lower their patent rates globally without their consent.

Key Points of the Complaint:

  • China’s Role: The European Commission claims that China’s courts have been empowered to set royalty rates for SEPs, a move that allegedly forces European companies to lower their rates, thus providing Chinese manufacturers with unfair access to European technology at lower costs.
  • SEPs and Impact on Tech: SEPs are patents that protect technologies essential for manufacturing products that meet specific standards, such as 5G technologies in mobile phones. Major European companies like Nokia and Ericsson are holders of these patents.
  • Chinese Response: China’s commerce ministry expressed regret over the EU’s decision to take the matter to the WTO, affirming that it would address the issue in accordance with WTO rules while safeguarding its rights and interests.
  • Previous Related Dispute: The case is connected to another ongoing WTO dispute filed by the EU in 2022, regarding Chinese anti-suit injunctions that hinder the ability of telecom patent holders to enforce their intellectual property rights in courts outside of China.

Steps Forward:

  • Consultations: The European Commission has requested consultations with China as the first step in WTO dispute resolution. If an agreement is not reached within 60 days, the EU may request the establishment of an adjudicating panel, which typically takes around 12 months to resolve.

Kadokawa Shares Fall as Sony Announces Investment, Not Acquisition

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Shares of Japan’s Kadokawa, a media conglomerate known for its role in creating the hit game “Elden Ring,” plummeted by their daily limit on Friday after the company announced a capital partnership with Sony Group instead of the expected full acquisition. The two companies revealed that Sony would invest approximately 50 billion yen ($317 million) in Kadokawa by acquiring a 10% stake through a new share issuance.

Stock Impact

Kadokawa’s stock fell sharply by 15.95% on Friday, ending the day at 3,689 yen, the daily limit, as sell orders overwhelmed the market. This comes after a surge of about 45% in Kadokawa’s stock price over the past month, fueled by reports of potential acquisition talks with Sony. Analysts pointed out that investors had expected a premium offer through a tender bid, which did not materialize, contributing to the sharp drop in Kadokawa’s share price.

Market Reaction

The investment from Sony, while making it the largest shareholder in Kadokawa, was seen as a disappointment by some market participants, especially given that the sale price of 4,146 yen per share was a discount of more than 5% compared to Kadokawa’s closing price the day before. Analysts like Shunki Nakamura from Jefferies also noted that the move would be dilutive due to the new share issuance.

Strategic Goals

The deal between Sony and Kadokawa is aimed at enhancing Sony’s position in the growing anime market, with Kadokawa’s publishing business playing a key role in the creation and distribution of anime content. However, while the partnership stops short of a full acquisition, there is potential for increased collaboration and future moves toward a larger stake in Kadokawa, according to analysts.

Sony’s Position

Despite the negative reaction in Kadokawa’s stock, Sony’s shares rose by 2% in the morning and ended the day with a modest 0.7% gain. Traders noted that this more limited partnership with Kadokawa would free up Sony to allocate capital to other projects.