pleading – Attorney Evan Brown

June 26, 2025 Copyright, Litigation

Court lets authors expand copyright case to target Databricks’ new AI models

amending complaing

Five copyright holders sued Databricks and Mosaic ML, claiming their copyrighted works were used to train artificial intelligence systems without permission. Plaintiffs originally alleged that Mosaic ML directly infringed their works by training its MPT large language models on datasets that included their works. Plaintiffs also accused Databricks, Mosaic ML’s parent company, of vicarious liability for that conduct.

After Databricks released a new set of AI models called DBRX, plaintiffs moved to amend the complaint. Plaintiffs asked the court to allow a new claim of direct copyright infringement against Databricks for allegedly using the same protected works to train DBRX. Plaintiffs also sought to update the list of copyrighted works allegedly copied. Defendants opposed the request, arguing that the amendment came too late and would unfairly change the case.

Timing

The court acknowledged that plaintiffs waited more than a year after DBRX was released before requesting to amend the complaint. That delay was significant, and plaintiffs did not provide a strong explanation. However, the court noted that discovery was still open, and key deadlines had not yet passed. Because the case was still active, the court said the delay alone was not enough to deny the motion.

Intent

Defendants claimed plaintiffs acted in bad faith by dragging out the case and making vague statements in court filings. But the court saw no signs of deliberate delay or dishonesty. Instead, it found that plaintiffs’ motion to amend reflected an effort to match the complaint with new information obtained through discovery.

Prejudice

Defendants argued that allowing new claims about DBRX would cause unfair prejudice by drastically changing the case. The court disagreed. It found that the parties were already engaged in discovery related to DBRX and that any added burden would be limited. Since the DBRX and MPT models might rely on overlapping data, the new claims would not require a completely new approach to the case.

Futility

Defendants also said the new claims were too vague and would not survive a challenge. But the court said such issues should be dealt with after the complaint is amended. Unless the new claims are clearly invalid, courts usually allow amendments and address legal sufficiency later in the process.

So the court granted plaintiffs’ motion to amend. The lawsuit will now include direct copyright infringement claims against Databricks based on its newer DBRX models, along with an updated list of works that plaintiffs claims were copied.

In re Mosaic LLM Litigation, 2025 WL 1755650 (N.D. California, June 25, 2025)

July 13, 2010 Fraud/Misrepresentation, Spam

State law spam claim in federal court not pled with required particularity

Hypertouch, Inc. v. Azoogle.com, Inc., 2010 WL 2712217 (9th Cir. July 9, 2010)

Pleading in federal court is generally a straightforward matter. Federal Rule of Civil Procedure 8 requires only that the plaintiff set forth a short and plain statement as to why that party is entitled to relief. But in cases involving fraud, there is a heightened pleading standard imposed by Rule 9.

In the case of Hypertouch, Inc. v. Azoogle.com, Inc., the plaintiff sued the defendants in federal court over almost 400,000 allegedly spam email messages. Hypertouch brought claims under California law (California Business and Professions Code § 17529.5(a)) but did not meet the heightened pleading standard of Rule 9. So the district court dismissed the case.

Plaintiff appealed to the Ninth Circuit. On review, the appellate court affirmed. It found that not only does the California statute speak in terms of commercial e-mail advertisements that contain “falsified,” “misrepresented,” “forged,” or misleading information — terms common to fraud allegations — but the complaint repeatedly described the advertisements and their content as “fraudulent.” The court held that plaintiff could not circumvent the requirements of the Rules by arguing that it did not plead all of the allegations sufficiently to set forth a claim of fraud.

It’s important to note that the court made clear, despite its holding, that it was not articulating a standard for pleading under this California statute. It merely found that in the circumstances of this case, the claim was not pled with the requisite particularity.

January 28, 2008 Computer Crime, Litigation

Damage under CFAA must involve some diminution of the system to be actionable

Garelli Wong & Assoc. v. Nichols, No. 07-6227, 2008 WL 161790 (N.D. Ill. January 16, 2008)

A recent decision from the U.S. District Court for the Northern District of Illinois presents a pretty typical fact pattern (employee leaves with sensitive data to work for a competitor), but also gives some useful guidance on the scope of the Computer Fraud and Abuse Act, 18 U.S.C. 1030 et seq. (CFAA).

Plaintiff Garelli Wong and Associates provides temporary placement for accounting professionals. When defendant Nichols worked for Garelli, he signed an NDA and learned a lot about the company’s clients, employees and strategy.

So when Garelli learned that Nichols allegedly copied a bunch of information before jumping ship, it sued. In addition to breach of contract, Garelli claimed Nichols violated the CFAA.

Nichols moved to dismiss the CFAA claim pursuant to Fed. R. Civ. P. 12(b)(6). The court granted the motion. It held that the CFAA requires a plaintiff to plead both damage and loss, and that Garelli failed to sufficiently plead both.

The CFAA defines “damage” as “impairment to the integrity or availability of data, a program, a system, or information.” Citing approvingly to the unpublished case of ResDev v. Lot Builders, 2005 WL 1924743 (M.D. Fla. August 10, 2005), which held that the word “integrity” required “some diminution in the completeness or useability of data or information on a computer system,” the court sided with Nichols. He had contended that CFAA liability does not arise merely by copying data. A violation of the CFAA requires more — some adverse effect on the system.

Garelli’s loss allegation essentially got Twomblied. The court found that Garelli’s allegations of loss — essentially a formulaic recitation of the CFAA’s $5,000 threshold language — did not provide the grounds of the entitlement to relief with more than labels and conclusions.