AI Class Actions – a cause for concern for Scottish businesses?

Legal actions spearheaded by well-known US comedian and writer Sarah Silverman against companies developing Artificial Intelligence ("AI") have been widely reported in recent weeks. Does this herald a new wave of litigation in Scotland or is it just another technological 'fad'?

The AI class actions

Silverman and two fellow writers are reportedly seeking to bring class action lawsuits in the San Franscisco Federal Court against OpenAI, the developer of ChatGPT, amongst others, on behalf of copyright owners across the USA whose rights they allege were infringed by these companies. AI products use vast datasets to train their models to produce content imitating the style of human text. The lawsuits allege that the writers' copyrighted texts were used as training material for the defenders' models without their consent, having been sourced from illicit online 'shadow libraries' (online databases containing millions of (often) copyrighted works).

While this may turn out to be a landmark case on the relationship between established law and emerging technology, the lawsuits are not unique. Again in San Francisco, a group of artists have sought to bring a class action against image-generating AI companies. They allege their artwork has been unlawfully used to train AI systems and that the creation of AI-generated images in the style of their work violates their copyright.

Could we see AI related group proceedings in Scotland?

Any organisation whose operations interact with the public is potentially at risk of becoming the subject of group proceedings, and their use in Scotland is only going to grow. What is unclear, however, is whether any of these emerging group proceedings will concern AI.

Jurisdiction can be a contentious issue where actions have an international aspect, with forum shopping in high value class actions appearing to be alive and well, as we discussed in our recent blog relating to the Kenyan Tea Farmers litigation. Normally, an action brought against a company in a Scottish court is raised on the basis that they have their registered office in Scotland. In proceedings for alleged copyright infringement, however, Scottish courts will also have jurisdiction if the alleged harmful event occurred in Scotland.

The Court of Session was previously asked to determine whether the Scottish courts had jurisdiction in a case concerning an alleged copyright breach by a website made in Greece but read in Scotland. It was held that the Scottish courts had jurisdiction on the basis that the harmful event or 'wrong' had occurred in all countries where the website was intended to be of significant interest, which included Scotland.

It remains to be seen where Scottish courts would determine a harmful event – if any – occurred in an AI copyright case. If the publication of content using copyrighted material is deemed to be an infringement, it is likely the Scottish courts would have jurisdiction where the content could be accessed in Scotland. If, however, the reading and processing of copyrighted material in the dataset used to train the models is deemed to be an infringement, this may be deemed to have occurred where an AI developer is physically located.

At present, many of the companies developing the models which the AI class actions relate to are based in Silicon Valley. However, with a number of AI start ups choosing Scotland as their home and an increasing number of Scottish firms using AI products and tools, including Chat GPT, AI based group proceedings (and court actions more generally) could see a rapid increase in the coming years.

We will continue to monitor developments in respect of AI related class actions and the potential impact in Scotland. However, even if this turns out to be another technological fad, one thing is for certain, group proceedings more broadly are here to stay.

For more information about group proceedings generally, and links to insights into the potential risks for Scottish businesses of different types of group proceedings, visit our class actions webpage.