The lawsuit is only the second known non-class action copyright claim filed against OpenAI in Canada
VerticalScope, which operates a digital platform of more than 1,200 online communities, including the deal-hunting forum RedFlagDeals.com, has sued OpenAI, alleging the AI company infringed its copyright and violated its terms of use by scraping content from its websites to train generative AI products like ChatGPT.
Filed in the Ontario Superior Court of Justice on Tuesday, VerticalScope’s statement of claim alleges that OpenAI’s misuse of its content unjustly enriched the San Francisco-based AI giant. The Canadian company is seeking damages and a permanent injunction to stop OpenAI from scraping its content.
Sana Halwani, one of the Lenczner Slaght lawyers who represents VerticalScope, told Law Times on Thursday that the company’s websites represent “one of the richest repositories of authentic human-generated content on the internet,” noting that much of it is generated by community members.
“That kind of content is really uniquely valuable to the development of large language models,” Halwani says. “You’ve got humans, lots of them, on these websites, in these forums and communities that endorse each other and rank each other and correct each other and have all these contributions that iterate and go back and forth.
“That means that you surface the highest-quality answers through this kind of genuine human vetting.”
In response to a request for comment about the lawsuit, a spokesperson for OpenAI said in a statement, "“ChatGPT helps enhance human creativity, advance scientific discovery and medical research, and enable hundreds of millions of people to improve their daily lives.
"Our models empower innovation, and are trained on publicly available data and grounded in the principles of fair use," the spokesperson added.
Headquartered in Toronto, VerticalScope operates websites for specialized enthusiast communities, including RedFlagDeals.com, AutoGuide.com, which focuses on automotive news and reviews, and PetGuide.com, which focuses on pet care. Together, the websites feature billions of editorials, articles, posts, user comments, product reviews, and topic summaries, created by both professionals and website users.
According to its statement of claim, the company’s core business involves helping advertisers deliver highly personalized, relevant ads to different demographics across their portfolio of websites.
Each of its websites features publicly available terms of use that stipulate that its content can only be used for personal, non-commercial purposes, cannot be copied, reproduced, or redistributed in any way, and cannot be used to entice users to visit a competing website.
VerticalScope alleged that, as early as 2015, OpenAI or its third-party crawlers had scraped content from its websites without its authorization, violating the websites’ terms of use. The company claimed OpenAI and its third-party crawlers have also accessed, scraped, or copied that content from the websites of other third parties, including commoncrawl.org, which “provides a free, open repository of web crawl data.”
“Using its models and retrieved data, OpenAI communicates outputs to Canadians via the internet that contain the [content] in verbatim, near verbatim, summarized or paraphrased form,” VerticalScope argued. “OpenAI drives traffic away from VerticalScope’s websites by delivering its content to users directly.”
The company added, “OpenAI is aware that its services have been used by Canadian users primarily to enable acts of copyright infringement and has taken no steps to prevent such infringement.”
Halwani says that, to her knowledge, this week’s lawsuit is only the second non-class-action copyright claim filed against OpenAI in Canada.
The first, Toronto Star Newspapers Limited v. OpenAI Inc., was brought by Canadian media outlets in 2024. Last year, the Ontario Superior Court of Justice issued Canada’s first-ever decision in a case involving copyright claims against OpenAI, affirming the court's jurisdiction over the claims even though the tech giant is based in the US. Halwani also represented the plaintiffs in that case.
“The cases that are not class actions… tend to move a lot more quickly than class action cases, [which] have to go through a lot of procedural hoops,” Halwani says. She adds, “We’re seeing pronouncements – at least preliminary pronouncements from the courts – come faster in these cases than in the class actions.”
Editor's Note: This story has been updated with a statement from an OpenAI spokesperson.
