NEW DELHI, Jan 31 (Reuters) - OpenAI is facing a tough legal battle asserting that Indian courts lack jurisdiction to preside over lawsuits related to its U.S.-based operations. This challenge comes in the wake of similar failed defenses by Telegram and increased scrutiny faced by U.S. technology companies in India regarding compliance issues.
One of India's major markets for OpenAI, the company is embroiled in a dispute triggered by a domestic news agency alleging copyright infringement.
The case has garnered attention as book publishers and media groups, including those owned by billionaires Gautam Adani and Mukesh Ambani, have united against OpenAI in the legal proceedings.
OpenAI, currently challenged by a Chinese startup in AI computing, maintains that its AI models are developed using publicly available information in adherence to fair use principles. The company is also grappling with copyright infringement lawsuits in the U.S., Germany, and other markets.
In response to the legal action by ANI in New Delhi, OpenAI argues that its terms of use mandate conflict resolution exclusively in San Francisco, asserting that Indian courts lack jurisdiction as the company does not operate servers or data centers in the country.
Legal expert Dharmendra Chatur believes that OpenAI's jurisdictional argument might not hold up in Indian courts today, contrasting it with the practices of other foreign tech companies like Google, X, and Facebook who engage in litigation across India.
Various legal experts and court-appointed advisors in the OpenAI case support the notion that Indian courts can hear the matter, emphasizing the company's active provision of services to users in India.
As the case progresses, a favorable ruling on jurisdiction could spare OpenAI from facing the copyright lawsuit in India, while an adverse decision could lead to demands for data deletion and financial penalties.
The Delhi court is scheduled to convene in February for further deliberations on jurisdiction and other pertinent issues.