Minimum Competence - Daily Legal News Podcast
Minimum Competence
Legal News for Fri 12/29 - NYTimes vs. OpenAI, Trump Gets Bumped in Maine, Bankrupt Celsius Network Moves to Mining

Legal News for Fri 12/29 - NYTimes vs. OpenAI, Trump Gets Bumped in Maine, Bankrupt Celsius Network Moves to Mining

In today’s episode we have the New York Times suing OpenAI, Trump gets bumped from another ballot owing to that whole insurrection thing, and bankrupt Celsius Network moves into bitcoin mining.

South Texas, pencil sketch

This Day in Legal History: Texas Becomes a State

On December 29, 1845, a pivotal moment in American history unfolded as Texas, after a complex and contentious journey, officially became the twenty-eighth state of the United States. This event was the culmination of a series of political and diplomatic maneuvers, beginning with the U.S. Congress passing the Annexation of the Republic of Texas Joint Resolution on March 1, 1845. Texas, with a history as part of Mexico and then as an independent republic, faced a unique path to statehood, marked by debates over territorial claims and national sovereignty.

In October 1845, the people of Texas, exercising their democratic rights, voted in favor of the Ordinance of Annexation, setting the stage for the final steps of this historic process. The U.S. Congress, recognizing the strategic and political significance of Texas, ratified the annexation. Finally, on this day in 1845, President James K. Polk signed the Ordinance of Annexation, officially welcoming Texas into the Union. This act not only expanded the United States territorially but also added to the complex tapestry of its federal structure.

However, the story of Texas' statehood did not end there. The post-annexation years brought their share of challenges, culminating in the secession of Texas during the Civil War. This led to a significant legal confrontation in the case of Texas v. White. In this landmark decision, the U.S. Supreme Court ruled that despite Texas' unique history and path to statehood, it did not possess the right to secede from the Union. This ruling reinforced the indissoluble nature of the Union and set a precedent for the legal status of states within the United States.

Thus, the annexation of Texas stands not just as a historical event but also as a legal milestone, and a study in the complexities of statehood, federalism, and the nature of the Union. This day in legal history reminds us of the intricate interplay between law, politics, and history in shaping the nation.

The New York Times Co. has initiated a significant legal action against Microsoft Corp. and OpenAI Inc., alleging copyright infringements related to the development of AI services. This lawsuit underscores the growing tension between media organizations and emerging AI technologies. The New York Times accuses the technology firms of using millions of its copyrighted articles to train AI chatbots like ChatGPT and other features, causing substantial financial damage. The exact monetary demands of the lawsuit, however, were not specified.

OpenAI, known for its popular chatbot ChatGPT, has faced previous lawsuits from authors but this is the first challenge from a major media company. Efforts by OpenAI to secure licensing deals with publishers, similar to those of Google and Facebook, were highlighted. Despite ongoing discussions with the New York Times, which reportedly started in April, an amicable solution was not reached, leading to this legal confrontation. OpenAI expressed surprise and disappointment at this development, stating their respect for the rights of content creators and their intention to work towards mutually beneficial arrangements.

OpenAI has previously secured agreements with news agencies like the Associated Press and Axel Springer SE, suggesting a willingness to legally access content for AI training. Despite these efforts, OpenAI continues to face multiple lawsuits, including from cultural figures like Sarah Silverman, George R.R. Martin, and Michael Chabon. These cases, still in early stages, highlight the complex legal terrain AI technology companies must navigate.

Amidst this legal challenge, OpenAI is reportedly seeking new financing, aiming for a valuation of $100 billion, which would make it one of the most valuable U.S. startups. Microsoft, OpenAI's primary backer, is implicated in the lawsuit for allegedly using the New York Times' content in its Bing search engine, contributing to a significant increase in its market value. The lawsuit contends that both Microsoft and OpenAI have failed to obtain necessary permissions for the commercial use of the New York Times' work.

The New York Times' lawsuit against Microsoft Corp. and OpenAI Inc. over alleged copyright breaches is a multifaceted legal battle that raises questions about the ethical use of AI in journalism. The Times claims that both firms used its vast repository of articles, including news pieces, opinion columns, and reviews, to train their AI systems like ChatGPT without permission, leading to potential financial and competitive harms. This lawsuit, however, extends beyond a straightforward copyright claim, delving into the broader implications and practices in the news and technology sectors.

The Times portrays itself as a defender of journalistic integrity, highlighting its 170-year history of providing independent journalism. It argues that the use of its content by AI technologies like GPT not only infringes on its copyright but also threatens the viability of its journalistic model. This stance, however, has been critiqued for potentially leading to an array of legal consequences, not just for OpenAI and Microsoft but for the Times itself. Critics point out that the Times regularly summarizes articles from other sources without credit, a practice that could come under fire if their lawsuit sets a precedent where such summarization is deemed infringing.

OpenAI has previously navigated these waters by striking deals with other publishers, such as Axel Springer, suggesting a willingness to find legal avenues for content use. The Times acknowledges its attempts to reach a similar agreement with OpenAI, indicating that the lawsuit might partly be a negotiation tactic. However, OpenAI's recent decision not to strike a deal with the Times, speculated to be due to high cost demands, might have triggered the legal action.

The lawsuit also highlights the role of Common Crawl, a resource used in training AI models. The Times' decision to exclude its articles from Common Crawl, combined with its allegations against GPT's use of its content, stirs debate over fair use and the nature of content archiving on the internet. This aspect of the lawsuit underlines the importance of preserving web history and the legality of utilizing such archives for AI training.

Furthermore, the Times' complaint includes claims that GPT's responses often mimic or summarize its articles, which could be seen as bypassing its paywall or creating substitutive products. The Times argues that this practice infringes on its copyright, yet this stance is contested on grounds of fair use, especially when considering that summarizing factual information is generally not copyrightable.

The lawsuit also opens up discussions about the nuances of AI-generated content. It points out instances where GPT produces outputs closely resembling Times' articles, but critics argue this is due to the way GPT is prompted, rather than an inherent flaw in AI training methodologies. The effectiveness and accuracy of AI in replicating or substituting for human journalism remain a topic of debate.

Ultimately, the Times' lawsuit against OpenAI and Microsoft is not just a legal dispute over copyright infringement. It's a complex case that touches upon the ethics of AI in journalism, the challenges of preserving internet history, and the evolving landscape of fair use in the digital age. The outcome of this lawsuit could have significant implications for AI development, journalistic practices, and the broader relationship between technology companies and content creators.

New York Times Sues Microsoft, OpenAI for Copyright Breaches (2)

The NY Times Lawsuit Against OpenAI Would Open Up The NY Times To All Sorts Of Lawsuits Should It Win | Techdirt

Maine has become the second U.S. state, following Colorado, to bar former President Donald Trump from appearing on a Republican presidential primary ballot for the 2024 election. These actions are based on legal challenges invoking Section 3 of the 14th Amendment of the U.S. Constitution, which prohibits individuals who have engaged in "insurrection or rebellion" from holding public office. This provision was originally enacted in 1868 to prevent former Confederacy members from serving in the U.S. government.

These challenges argue that Trump's actions on January 6, 2021, when he encouraged his supporters to stop the certification of the 2020 election results, amounted to insurrection. Following this, his supporters stormed the U.S. Capitol. In Maine, a group of former state lawmakers successfully argued that Trump, due to these actions, is not qualified to serve as president again under this constitutional provision. Maine's top election official, Democrat Shenna Bellows, ruled to keep Trump off the ballot for the Republican primary, although this decision is on hold pending appeal.

Colorado's highest court similarly ruled that Trump engaged in insurrection, but this ruling is also on hold to allow for an appeal to the U.S. Supreme Court. Trump's defense challenges these disqualifications as undemocratic and argues that Section 3 does not apply to presidents and that his actions on January 6 were protected free speech. Additionally, Trump has pleaded not guilty to criminal charges related to the 2020 election but has not been charged with insurrection.

While some states like Minnesota and Michigan have rejected these ballot challenges, at least 12 states have pending cases. The U.S. Supreme Court is likely to review the Colorado case due to its significant political and legal implications. The outcome of these cases could have profound effects on the 2024 presidential election and the broader political landscape in the United States.

Trump foes turn to Constitution's 'insurrection' ban to keep him off 2024 ballot | Reuters

Celsius Network, a cryptocurrency lender, has received approval from a U.S. bankruptcy judge to shift its focus to bitcoin mining as part of its restructuring process. This move comes after the U.S. Securities and Exchange Commission (SEC) rejected Celsius' original plan to earn fees from validating crypto transactions and start new business lines. The bankruptcy judge, Martin Glenn, ruled that this pivot to bitcoin mining does not adversely affect creditors and customers compared to the previously approved bankruptcy plan.

Celsius had filed for Chapter 11 protection in July 2022 amidst a series of bankruptcies in the crypto lending sector, triggered by rapid industry growth during the COVID-19 pandemic. The revised plan involves parting ways with some of the original bidders selected to manage the new company, leaving US Bitcoin Corp, led by Hut 8's Asher Genoot, to run the creditor-owned mining business.

The change in the company's direction had raised concerns among some creditors and the U.S. Department of Justice's bankruptcy watchdog, who argued that the shift was significant enough to warrant a new vote by creditors. However, Judge Glenn ultimately approved the new mining-focused restructuring plan without requiring a fresh vote.

Celsius' interim CEO, Chris Ferraro, expressed optimism about the decision, stating that the company's focus remains on promptly distributing cryptocurrency to its creditors. The revised plan also releases $225 million in cryptocurrency assets, previously allocated for the rejected business lines, increasing the amount of cryptocurrency to be returned to customers. In addition, customers will receive equity shares in the new bitcoin mining business. Celsius anticipates emerging from bankruptcy in early 2024.

Celsius Network wins court approval for shift to bitcoin mining | Reuters

Minimum Competence - Daily Legal News Podcast
Minimum Competence
The idea is that this podcast can accompany you on your commute home and will render you minimally competent on the major legal news stories of the day. The transcript is available in the form of a newsletter at