Table of Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• TOGETHER WITH BARBRI SQE* 🤝

• A BIT OF FUN 😄

• IN OTHER NEWS 🗞

• AROUND THE WEB 🌐

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

A few weeks ago, the Financial Times released a new mini-documentary addressing the challenges facing the UK's struggling stock market.

We’ve written about companies like Arm choosing to go to New York instead of London.

It’s a worrying trend for the country’s long-term economic health.

A key issue that’s raised is the UK's flawed pension system (which is important to resolve these problems).

Anyway, thought I’d share in case it’s interesting to you.

- Idin 

FEATURED REPORT 📰

😡 Mums aren’t happy with ChatGPT

What's going on here?

This week, the law firm Harbottle & Lewis announced it’s representing Mumsnet (a UK-based internet forum for parents) in its dispute with OpenAI (the creator of ChatGPT). It’s the first legal action against OpenAI in the UK.

Why is Mumsnet suing OpenAI?

They’re not happy that OpenAI’s been “data scraping” their site.

Data scraping is where a computer reads data from publicly available web pages. Mumsnet believes OpenAI scraped the 6 billion words in its forums without its permission to train ChatGPT (the popular AI chatbot).

Why is data scraping an issue?

Before large language models like ChatGPT, the closest thing to data scraping was called “data crawling”. This is where search engines like Google trawled the internet to find and make a catalogue of websites. Mumsnet is fine with data crawling because appearing in Google’s results means they get traffic sent to their site.

But companies like OpenAI that scrape data are different – the websites that are scraped get nothing in return (unless they have a licensing agreement where the tech company pays them for the content). Data scraping is actually harming the sites because if ChatGPT can directly give a user the content from the website, the website loses out on clicks.

How are companies preventing data scraping?

They’re using robots to protect themselves.

Well, something called “robots.txt” – this is a file they can put on their website which blocks their content from specified data scrapers. Mumsnet has now used this to prevent AI companies like OpenAI and Google Gemini from training their AI products on Mumsnet’s data.

But Mumsnet’s still worried about what OpenAI managed to scrape before they blocked it.

How likely is Mumsnet to succeed in its claim?

Mumsnet has two main complaints against OpenAI:

1. OpenAI has infringed upon its copyright, and

2. OpenAI has breached the terms of use on its website.

Copyright: Proving copyright infringement is hard. Mumsnet would need to show that ChatGPT is exactly reproducing its copyrighted content in response to certain prompts (it’s what The New York Times had to do in its lawsuit against OpenAI last year in the US). Mumsnet would have to prove that ChatGPT couldn’t have gotten that material from anywhere else.

Terms of use: Mumsnet could have a better chance arguing that OpenAI breached its terms of use. Literally the first term in its terms of use (you can see it below) says: “No part of the Website may be distributed, scraped, or copied for any commercial purposes without express approval and a licence to do so”.

How can you resolve this? One way is a licensing agreement which allows OpenAI to pay Mumsnet for access to its content (this is what OpenAI did with News Corp – the company that owns brands like The Wall Street Journal, The Times and The Daily Telegraph). Mumsnet approached OpenAI to talk licensing earlier this year – but discussions broke down.

What’s OpenAI’s defence?

OpenAI says “it would be impossible to train today’s leading AI models without using copyright materials” – they believe they’re legally allowed to use copyrighted material to train large language models.

Will this argument work? Well… maybe, in the US. Over there, they’ve got a “doctrine of fair use” which allows excerpts of copyrighted material to be quoted exactly for some “fair use” purposes (like criticism, news reporting, teaching, and research) without permission from the copyright holder. But the UK doesn’t have this “fair use” right (we have something called “fair dealing” which is similar, but more strict and unlikely to help OpenAI here).

Under EU law (which the UK kept after Brexit), there’s something called the “transient copy” exception. This exists to help tech companies develop while protecting copyrighted works.

It lets you copy something without permission if the copying:

• Is incidental or transient (meaning it happens by accident or is temporary and short-lived)

• Is essential to the technological process (meaning it’s necessary for the technology to work properly)

• Is to enable lawful use of the copyrighted work (meaning the copied work is used in a way that’s legal)

• Has no independent economic significance (meaning the copying itself doesn’t create a separate economic value or benefit)

This exception hasn’t been tested in English courts for products like ChatGPT. But you can only use it if you don’t unfairly harm the rights of the copyright owner – so training an AI chatbot without permission from the copyright owner probably wouldn’t meet this standard.

What’s a lawyer’s role in this?

Mumsnet has turned to Harbottle & Lewis for help – and they’ve taken the first step in starting a claim. They’ve written to OpenAI setting out a summary of the facts, the legal basis of the complaint, and what compensation their client would like. 

This initial communication is part of the “pre-action protocols” required as the first step in any dispute. The parties need to exchange enough information to:

• Understand each other’s positions and decide how to proceed

• Consider alternative ways to resolve the dispute (avoiding court)

• Ensure the proceedings are managed efficiently

OpenAI’s lawyers must respond to this letter (in a complex case like this, they’ll usually have up to three months). It’s the first time OpenAI’s dealing with this sort of complaint in the UK, so it’s not clear which firm will be representing them. In the US, they’ve usually gone to Morrison Foerster or Wachtell Lipton.

Credit: Laura White

TOGETHER WITH BARBRI SQE* 🤝

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A BIT OF FUN 😄 

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IN OTHER NEWS 🗞

• 🇯🇵 Japan opens up to foreign lawyers. Before, it was a long process to register as a foreign lawyer in Japan. But the Law Society, the British Embassy in Tokyo, the Ministry for Justice, and the Department for Business and Trade have been working together to make it easier. This will mean foreign lawyers can more easily access Japan’s $5 billion legal services market.

• 💼 A&O Shearman and Hogan Lovells are defending a £9.9 billion crypto class action claim. The UK Competition Appeal Tribunal (a specialist judicial body handling competition-related cases) has approved a case for 240,000 investors against four major cryptocurrency exchanges. The claim alleges that the exchanges colluded to delist a cryptocurrency called BSV in 2019, affecting competition, and that two exchanges caused additional losses by converting BSV to other cryptocurrencies without consent. The trial will determine if cryptocurrency exchanges must follow the same competition laws as other businesses.

• 🤖 The EU’s AI Act enters into force after a year of negotiations. It covers any product or service which is offered in the EU that is using artificial intelligence. Restrictions on these products or services depend on their classification into one of four risk categories. Most AI systems are expected to be low-risk, but the highest-risk ones must meet transparency obligations. For instance, AI-generated content like deepfakes must now be clearly labelled. Companies that don’t comply will face fines of up to 7% of their global annual revenue. (Here’s our breakdown of the AI Act).

• 📷 Meta (Facebook’s parent company) will pay $1.4 billion to settle a Texas lawsuit which claims it used facial recognition technology to collect biometric data without consent. Texas claims Facebook collected biometric data billions of times from user photos and videos through a discontinued feature. The lawsuit, filed in 2022, was the first major case under Texas' 2009 biometric privacy law, which allows for damages up to $25,000 per violation. This is the largest settlement granted by any single state.

• 🇬🇧 The Bank of England (BoE) just cut interest rates to 5%, the first drop in four years. The move shows the BoE’s confident about reducing inflation. They also think the UK's economy will grow by 1.25% this year. Other central banks in Europe and the US are also talking about cutting rates. The pound, which was strong against the dollar, dropped after this news. Lower rates usually make a currency less appealing.

AROUND THE WEB 🌐

• 🏅 Olympics: Can you correctly arrange the Olympic flag?

• 👩‍💻 Tech: This free newsletter covers tech, startup, and coding stories in a quick 5-minute email*

• 🖱️ Game: See if you can figure out this clicky mouse maths game (reply to this email if you’re stuck figuring it out — I’ll explain)

Credit: r/internetisbeautiful

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STUFF THAT MIGHT HELP YOU 👌

• 📹️ Free application help: If you're applying to commercial law firms, check out my YouTube channel for actionable tips and an insight into the lifestyle of a commercial lawyer in London.