Open AI must pay GEMA licence fee for ChatGPT

The Munich Regional Court ruled that OpenAI infringed copyrights by using German artists' song lyrics to train older ChatGPT versions (4 and 4o) without a GEMA license, ordering the company to cease and desist and pay damages. This landmark decision, while specific to older models and German law, sets a significant precedent for generative AI operators, highlighting escalating intellectual property risks and the potential for increased licensing costs for training data. OpenAI is considering an appeal, emphasizing the ongoing legal uncertainty for AI development and the need for clearer European-level guidance on AI and copyright.

Analysis

The Munich Regional Court ruled on November 11, 2025, that OpenAI infringed copyrights by using German artists' song lyrics to train older versions of ChatGPT (4 and 4o) without a GEMA license (case ID: 42 O 14139/24). The court ordered OpenAI to cease and desist and pay damages, citing that both memorization in language models and reproduction in chatbot outputs constitute copyright infringement. This decision, while specific to older models and German jurisdiction, establishes a significant precedent for generative AI operators regarding intellectual property rights.

This landmark judgment, following a similar ruling against TikTok in 2024 by the same chamber, signals escalating intellectual property risks for AI developers globally. The court explicitly rejected the argument that such use falls under text and data mining restrictions, potentially increasing compliance burdens and licensing costs for training data across the AI industry. OpenAI's statement, acknowledging the ruling applies to a "limited set of lyrics" but seeking European-level clarity, underscores the ongoing legal uncertainty.

OpenAI is considering an appeal, indicating a prolonged legal battle and a lack of immediate resolution for the broader industry. The company's dissatisfaction with the first-instance proceedings highlights the fundamental disagreement between AI developers and content creators over data usage. This legal challenge, coupled with GEMA's second case against Suno AI, suggests a growing trend of litigation against AI companies for copyright infringement.

Key Decisions for Investors

• Investors should closely monitor the evolving legal landscape surrounding AI and copyright, particularly appeals and potential EU-level guidance, as this ruling sets a precedent for licensing requirements and operational costs for AI companies.
• Evaluate AI companies' strategies for managing intellectual property risks, including their approach to data sourcing, licensing agreements, and potential litigation exposure, especially for those heavily reliant on large datasets for training.
• Factor in the potential for increased licensing costs for training data, which could impact the profitability and business models of generative AI firms, and assess companies' ability to absorb or pass on these costs.