Context:
- Different categories of right holders have brought dozens of copyright infringement lawsuits against AI providers, above all, OpenAI, though the biggest news so far has been the $1.5B+ settlement between book authors and Anthropic (October 28, 2025 exclusive interview by ai fray).
- The first OpenAI copyright trial worldwide took place in the Landgericht München I (Munich I Regional Court) this fall, and OpenAI faced a hostile (not in the sense of biased) court that agreed with the positions taken by music rights collecting society Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (GEMA) apart from a minor inconsequential detail (September 29, 2025 ai fray article). The decision was scheduled for today.
What’s new: Presiding Judge Presiding Judge Dr. Elke Schwager, accompanied by Judges Mattes and Hahn, just announced the decision, which is consistent with the inclinations expressed by the three-judge panel in late September. The court has enjoined OpenAI from reproducing unlicensed German song lyrics (GEMA provided 30 examples) and from storing the related data on any infrastructure located in Germany. The court also declared OpenAI liable for damages to be determined in a subsequent proceeding. It declined to adopt a suggestion by both parties to refer certain questions concerning the interpretation of EU copyright law to the European Court of Justice (ECJ). The judgment will be published in a local newspaper at OpenAI’s expense, which is a rather drastic (albeit symbolic) remedy.
Direct impact:
- GEMA’s General Counsel says the importance of this decision cannot be overstated. See his exclusive comments to ai fray further below.
- OpenAI will appeal, but after losing on virtually every count it will be an uphill battle to turn this around.
- Even if GEMA elected to enforce the injunction during the appellate proceedings, and if the appeals court (Oberlandesgericht München, Munich Higher Regional Court) denied a motion to stay enforcement, there would be no risk of ChatGPT becoming unavailable in Germany. OpenAI would have to take certain measures.
- It appears that OpenAI has already made some changes in response to this lawsuit. In the event of enforcement, GEMA would bear the burden of proof of any violations, meaning in practical terms that GEMA would have to identify prompts that result in the reproduction of the asserted works or significant parts thereof.
- GEMA made it clear from the beginning that this is about the defense of its licensing model. It appears, however, that OpenAI has so far declined to negotiate a license agreement.
Wider ramifications:
- It is only a first-instance ruling, so there could be several more rounds of litigation, potentially all the way up to the ECJ. But this court is well-respected, particularly in connection with intellectual property enforcement where it has often shaped the case law beyond its borders.
- EU copyright law does not have a “fair use” exception like U.S. law, just like billion-dollar statutory damages for the use of pirate libraries (which was the risk Anthropic addressed through a settlement) are unavailable in Europe.
- In addition to European/German copyright law, AI providers must also deal with other types of claims. Last month, the Hamburg Regional Court held Grok/xAI liable for falsehoods (October 13, 2025 ai fray article).
- GEMA’s next copyright trial against an AI provider will take place in the same court on January 26, 2026. The defendant is Suno, and that one is about compositions as opposed to lyrics.
Based on how the September trial went, OpenAI’s defenses failed in this court primarily for the following reasons (for further detail, we refer you to our trial report):
- Even a slightly modified (due to hallucinations) output of a copyrighted work constitutes reproduction and gives rise to liablity for copyright infringement.
- The fact that OpenAI, according to its own representations, does not archive texts in a conventional format, but rather derives and stores statistical correlations.
- OpenAI cannot successfully invoke the EU’s text and data mining (TDM) exception because substantial parts of the copyrighted works were found in OpenAI’s output. In any event, GEMA had declared an opt-out from TDM on its members’ behalf.
- OpenAI can’t shift the blame to its users for provoking copyright infringements through prompts. The court views this as different from using tools that, for example, browse the web.
- The court also rejected the theory that there was anything abusive about GEMA enforcing copyright in order to protect its licensing model.
After announcing the operative part of the decision, the court provided detailed explanations as to how it reached its conclusions. Those were consistent with what was said at the late-September trial.
With respect to both parties’ requests for a referral to the ECJ, the court recalled that a first-instance court does not have an obligation to make a preliminary reference. In this case, the court considered the case clear-cut and entered a final judgment.
Exclusive GEMA comments to ai fray: “One can’t overstate the importance and this will to some extent set a standard for other European cases”
We have had the opportunity to talk to GEMA’s General Counsel, Dr. Kai Welp, about the decision and its ramifications.
ai fray: You won this round, congratulations, but is the glass half-full or half-empty considering that the first-instance declined to exercise its discretion to refer certain questions of EU copyright law to the ECJ?
Dr. Welp: This is clearly all positive because for the first time a court in Europe has made a determination that there must be compensation for right holders. This is a milestone for right holders. We are fighting hard for this licensing model. One can’t overstate the importance of today’s ruling. The whole of Europe is going to look at this and it will definitely, to a certain extent, set a standard for other European cases. It also shows to the tech industry that it must take licenses. Whether certain questions are referred to the ECJ is in the discretion of the court. Here, the court concluded that there are clear violations of our members’ rights.
ai fray: But it is only a first-instance judgment, subject to appeal, with the possibility of further appeals. What does that mean for the importance of this judgment?
Dr. Welp: It became clear at the oral hearing that the panel has gone to extreme lenghts to analyze this matter from all angles. We are glad that it reached its decision so quickly. It is of the utmost importance that the relevant legal questions be clarified and legal certainty be attained.
ai fray: What’s next, now that you’ve won the first round and OpenAI will appeal?
Dr. Welp: First and foremost, we want to establish our licensing model. I continue to have hope that this can be achieved amicably, especially under the impression of judicial guidance. We are interested in a swift resolution of the matter and hope for a growing realization that licensing is the solution.
ai fray: Has OpenAI indicated a willingness to talk?
Dr. Welp: We hope that discussions can take place in the wake of this decision. The court has unequivocally clarified the law. Whether there will be a growing realization somewhere now or in the long run, licensing will be the answer. The tech industry as a whole should be interested in incentivizing creativity as it needs to feed its systems with new material.
ai fray: Is the European situation divergent from what we can observe in the U.S.?
Dr. Welp: The legal frameworks differ, and that is why the relevant decisions must be assessed separately. The application of U.S. law will be clarified in the U.S., and to the extent that decisions have come down, they point in one direction or the other. The European market is an extremely important one, and those operating in it must abide by European copyright law. Ultimately this is also necessary to protect local players: there must be a level playing field. For Europe as a whole it could even be a competitive advantage in this era that there is a clear and balanced legal framework that will also work for the tech industry.
ai fray: Thank you very much for talking to us on this historic occasion.
Court and counsel
Munich I Regional Court, 42nd Civil Chamber: Presiding Judge Dr. Elke Schwager with side judges Judge Mattes and Judge Hahn.
Counsel for GEMA: Raue’s Dr. Robert Heine, a specialized media and copyright attorney whose practice also includes AI-specific matters.
Counsel for OpenAI: Quinn Emanuel (lead counsel: Dr. Marcus Grosch).