Perplexity Faces Lawsuit from Britannica, Merriam-Webster Over Copyright, Trademark Violations

AI chatbot Perplexity is now a subject of a lawsuit with two long-established giants of knowledge sharing: Encyclopedia Britannica and Merriam-Webster.

The latter have sued Perplexity for copyright and trademark infringement. They claim that the AI software has harmed their earnings streams by diverting web traffic away from their websites.

What Are the Lawsuit Allegations Against Perplexity

Perplexity Faces Lawsuit from Britannica, Merriam-Webster Over Copyright, Trademark Violations

As per an early Reuters report, Britannica and Merriam-Webster contended that Perplexity has been copying their content without authorization, which violates their copyrights.

The lawsuit, filed in a New York federal court, asserts that Perplexity's AI tool "free rides" on the content of these reputable sources, siphoning web traffic away from their sites.

Both Britannica and Merriam-Webster rely on website traffic to sell subscriptions and generate ad revenue, and this shift in traffic is argued to be harmful to their business model.

As we know, a single enter into our device's keyboard means that real-time web searches will instantly come out. With that, we no longer visit the original source website. That saves us time, but it does not spare the information providers.

While generative AI tools like Perplexity and OpenAI's ChatGPT often scrape content to train their models, Perplexity's method of sourcing data in real time for instant user responses takes this issue a step further, as it circumvents direct visits to the websites of content creators.

Expanding Jurisprudence of Generative AI

Perplexity's lawsuit is one of many class action suits against generative AI firms. In 2024, media conglomerate News Corp brought a similar lawsuit against Perplexity for allegedly infringing on Dow Jones and The New York Post articles through use without permission.

To meet these challenges, most AI firms, including Perplexity, have been testing revenue-sharing arrangements with publishers.

Perplexity actually introduced a program last month designed to pay publishers when their material is utilized to generate the AI's response. This is all part of a larger effort across the AI sector to create a more equitable and sustainable business model, one that rewards content providers for their role in feeding AI systems.

AI "Hallucinations" and Trademark Issues

Aside from copyright infringement, Britannica and Merriam-Webster are also concerned with the "hallucinations" frequently produced by AI programs such as Perplexity. These AI products sometimes give out wrong or incorrect information, and in this regard, certain mistakes have been traced back to Britannica and Merriam-Webster content.

Both firms said that the use of their material for wrongful purposes is not only a copyright infringement but also a trademark infringement, as these hallucinations have the potential to damage their reputations.

According to Digital Trends, the complaint asks for money damages, although the amount has not been made public. The lawsuit arrives as generative AI firms are coming under growing scrutiny over how much they depend on third-party material to power their models.

Earlier this month, PayPal collaborated with Perplexity to roll out AI tools and other rewards to PayPal and Venmo users. One exclusive perk is free access to Perplexity's Comet AI browser.