AI Privacy Implicated in Court Ruling
By Justin Sorrell — PartnerNew York Federal Court Ruling and Privacy Implication
A New York federal court just issued a ruling that could have privacy implications for AI users.
New York Times among Plaintiffs Filing Against Multiple Defendants in AI Case
In a pending multi-district litigation matter, various plaintiffs, including the New York Times, have sued multiple defendants, including OpenAI (creator of ChatGPT) and Microsoft, alleging copyright infringement. In re: OpenAI, Inc. Copyright Infringement Litigation, 25-md-3143 (S.D.N.Y. 2025).
While the outcome of the copyright claims remains to be decided, the Court just issued a ruling that has implications for a different, but equally important issue: data privacy.
In a highly-watched discovery dispute, the Court had previously issued an order requiring OpenAI to “preserve and segregate all output log data that would otherwise be deleted on a going forward basis until further order of the Court . . . , whether such data might be deleted at a user’s request or because of ‘numerous privacy laws and regulations’ that might require OpenAI to do so.” (See May 13, 2025 Order, Doc. 33).
OpenAI objected to the Order, and on June 26, 2025, the Court heard argument on the Order, at the conclusion of which the Court denied OpenAI’s objections, upholding its original Order requiring that data preservation.
Preservation of All OpenAI Data Required
To the casual observer, this data preservation order appears routine. But the Court is not ordering just any data to be preserved. Rather, the Court is ordering OpenAI to preserve all ChatGPT user chat logs, whether or not a user has hit the “delete” button, and whether or not a jurisdiction’s data privacy law requires it.
This means that, even if a ChatGPT user has deleted a particular chat, it might now be part of the massive trove of data being set aside in this litigation. And while the Court does not yet appear to have required disclosure of these chat logs, it seems inevitable the plaintiffs will ask for at least some of the data. Hopefully if the Court does require such disclosure, it will do so pursuant to a discovery protective order to keep sensitive user data out of the public eye.
Whatever the eventual outcome of this data preservation issue, the implications are enormous, and plaintiffs in similar copyright lawsuits will likely ask other AI defendants, such as Anthropic (Claude) and Microsoft to preserve, and eventually disclose similar data.
Key Takeaway: AI User Beware
The key takeaway is that users of ChatGPT, Claude, and other LLM AI services should assume that everything they enter into any non-secure AI chat service may someday be public. The old adage that “everything on the Internet lives forever” has never been more true than today.
With the evolution of LLM AI models and their ease of use, there will be many more concerns about their use in the future. If you have questions about intellectual property law, including copyright, and artificial intelligence, the attorneys of Riley Bennett Egloff are available to assist you.
Justin Sorrell – Attorney at Law
Justin is a problem-solver who seeks creative solutions to his clients’ legal issues while understanding and advising his clients of the business impact of litigation and transaction choices to help guide his clients’ decision-making. Justin has served as outside corporate counsel, including handling bank loan transactions, real estate transactions, and commercial leases, and loan work-outs and bankruptcy matters.
When disputes arise and an amicable resolution is not possible, Justin is an experienced litigator who aggressively and diligently pursues his clients’ interests in many types of disputes in federal and state courts across Indiana. He often represents businesses and employers in lawsuits including wage and retaliation claims, trade secret and confidentiality claims, non-competition and non-solicitation covenants, breach of contract claims, collections, and appeals. Justin also defends health-care providers against licensing complaints, including against consumer complaints and administrative complaints brought by the Office of the Attorney General. He has helped numerous clients amicably resolve contentious disputes, saving them and their businesses significant time and money.
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Posted on July 1, 2025 by Justin O. Sorrell