IP Hot Topic: Privilege Preserved: OpenAI Escapes Forced Disclosure of Attorney Communications in Major Copyright Fight
In a ruling with significant implications for AI companies navigating copyright litigation, a federal judge in a copyright action against OpenAI has drawn a clear distinction between denying wrongdoing and inviting discovery into privileged legal advice. This case, In re OpenAI, Inc., Copyright Infringement Litigation, No. 25-md-3143, D.N. 1776 (S.D.N.Y. Feb. 6, 2026), offers a roadmap for defendants aiming to protect attorney-client communications while contesting allegations of willful infringement.
Background
In April 2025, the U.S. Judicial Panel on Multidistrict Litigation centralized twelve copyright infringement actions against OpenAI and Microsoft into a single MDL in the Southern District of New York, assigned to Judge Sidney H. Stein. The cases stem from allegations that the defendants used copyrighted works—including books, news articles, and video transcripts—without consent to train their large language models.
Before this litigation commenced, OpenAI had deleted its “Books1” and “Books2” training datasets—datasets created from pirated books downloaded from Library Genesis (LibGen). OpenAI stated that the reason for the deletion was the “non-use” of the datasets. However, when Class Plaintiffs sought discovery regarding the deletion reasons, OpenAI asserted attorney-client privilege.
The Magistrate Judge’s November 2025 Ruling
On November 24, 2025, Magistrate Judge Ona T. Wang ruled that OpenAI had waived attorney-client privilege concerning communications related to the deletion of its “Books1” and “Books2” training datasets. Judge Wang identified three grounds for the waiver:
- OpenAI’s position that all reasons for the deletion were privileged led to the voluntary disclosure of a privileged reason (“non-use”).
- OpenAI made a “moving target” of its privilege assertions.
- OpenAI put its good faith and state of mind at issue by denying willful infringement allegations.
Judge Wang did not find that the crime-fraud exception applied in this case. The scope of that waiver encompassed all communications in 2022 related to the reasons for deleting the datasets and all internal references to LibGen. Consequently, Judge Wang ordered the production of the communications and depositions of OpenAI’s in-house attorneys.
Judge Stein’s Order of February 6, 2026
On February 6, 2026, Judge Stein upheld OpenAI’s objection under Federal Rule of Civil Procedure 72(a) and set aside the magistrate judge’s order, finding each basis for waiver to be “clearly erroneous” or “contrary to law.”
No disclosure of privileged material: Judge Stein held that OpenAI’s statements regarding the datasets being deleted “due to non-use” did not reveal any legal advice from an attorney. Since these statements were not privileged on their own, disclosing them could not trigger a waiver.
No “moving target”: The court found that OpenAI consistently maintained that attorney-client communications about the deletion were privileged. While OpenAI’s later formulations were described as “inartful,” these missteps did not amount to the deliberate re-engineering of privilege assertions that courts have sanctioned with waiver.
No “at-issue” waiver: Judge Stein also rejected the conclusion that merely denying willful infringement constituted an “at-issue” waiver. The court made a clear distinction between denying willfulness—on which the plaintiff bears the burden—and affirmatively asserting a good faith belief in the lawfulness of one’s conduct. “At-issue” waiver requires a party to rely on privileged advice to support its defense. OpenAI represented that it would not introduce evidence of state of mind at trial, opting instead to defend on substantive grounds such as fair use.
Crime-fraud exception rejected: Judge Stein affirmed the finding that plaintiffs failed to show probable cause that the privileged communications were made in furtherance of, or intended to conceal, criminal copyright infringement.
Key Takeaways
- Disclosing facts does not waive privilege over related legal advice. A party may describe what it did without forfeiting privilege over communications that informed why it did so.
- Denying willfulness is not the same as asserting good faith. AI defendants can contest willful infringement without triggering “at-issue” waiver, provided they do not introduce evidence of their subjective belief in the legality of their conduct.
- Precision in privilege assertions matters. The court flagged OpenAI’s “inartful” formulations and improper deposition instructions. Practitioners should clearly and consistently state privilege positions from the outset.
- Willfulness strategy carries high stakes in AI copyright cases. Under 17 U.S.C. § 504(c)(2), statutory damages range from $200 for innocent infringement to $150,000 for willful infringement. The distinction between denial and affirmative defense has tangible consequences for privilege and exposure.
