The Delhi HC Hands Big Tech an AI Copyright Free Pass, While the DPDP Act Enters Constitutional Purgatory

The Generative AI Copyright Shocker: Stretching Section 52 Beyond Recognition

If you represent content creators, publishers, or media houses, the Delhi High Court’s latest prima facie ruling on artificial intelligence and copyright should have alarm bells ringing across your practice. In a highly controversial interim order, the Court declined to injunct OpenAI from using Asian News International’s (ANI) copyrighted works to train ChatGPT, holding that such data scraping and storage likely falls under Section 52(1)(a) of the Copyright Act, 1957.

For the uninitiated, Section 52(1)(a) protects "fair dealing with any work... for the purposes of private or personal use, including research." Let us be absolutely clear: applying a "private or personal use" exception to a multi-billion-dollar commercial enterprise building a for-profit Large Language Model (LLM) is a staggering judicial stretch.

To equate OpenAI’s algorithmic ingestion of millions of copyrighted articles with a scholar photocopying a book in a library fundamentally misunderstands the commercial reality of generative AI.

Historically, Indian courts have interpreted "fair dealing" strictly. The defense requires an assessment of the purpose, the amount of work taken, and the effect on the original work’s market. By classifying mass data extraction for commercial LLM training as "research," the High Court has effectively granted Big Tech a free pass to monetize proprietary Indian data. For IP practitioners, this means traditional copyright infringement suits against AI developers will face an immediate, court-sanctioned roadblock. Until this is challenged and overturned by a Division Bench or the Supreme Court, your strategy for protecting client data must shift from pure copyright enforcement to robust digital rights management (DRM), paywalls, and aggressive terms-of-service litigation.

The DPDP Act: No Stay, No Board, Full Chaos

On the privacy front, the Supreme Court has officially referred a slew of constitutional challenges against the Digital Personal Data Protection (DPDP) Act, 2023 and the newly notified DPDP Rules 2025 to a larger bench. Crucially, however, the Court declined to stay the legislation. For technology and corporate lawyers, this creates a schizophrenic compliance environment: you must advise your clients to spend millions overhauling their data architecture to comply with a law that might be fundamentally rewritten by the Apex Court.

The crux of the Supreme Court petitions—spearheaded by activists and journalists like Nitin Sethi and The Reporters’ Collective—is the DPDP Act’s devastating impact on transparency. Specifically, the challenge targets Section 44(3) of the DPDP Act, which surgically amends Section 8(1)(j) of the Right to Information (RTI) Act, 2005.

Before this amendment, the RTI Act allowed public information officers to balance privacy against public interest. If the disclosure of personal information served a larger public interest, or if the information was such that it could not be denied to the Parliament, it had to be disclosed. The DPDP Act obliterates this balancing test. Now, any personal information is completely exempt from RTI disclosure. As the Supreme Court noted during the hearings, the judiciary is now tasked with drawing the absolute line between public data and private data.

What This Means for the Practicing Lawyer

The refusal to grant a stay means that Sections 5 (Notice), 6 (Consent), and 8 (Obligations of Data Fiduciaries) are live ammunition. If you represent Data Fiduciaries (which, under this broad law, is almost every corporate client), you cannot use the pending Supreme Court challenge as an excuse for non-compliance.

Yet, the regulatory infrastructure remains a ghost ship. As of mid-2026, while the Data Protection Board of India (DPBI) was legally birthed by the November 2025 Rules, it remains entirely headless. The nomination and appointment process has dragged on, leaving companies without a functional regulator to issue clarifications on complex issues like AI consent management, labor data compliance, and school data collection.

We are currently in a bizarre regulatory twilight zone: the law is enforceable, the penalties are draconian (up to ₹250 crores), the constitutional validity is under severe judicial doubt, and the regulatory watchdog has no teeth, no head, and no office.

The Practice Takeaway: Do not hit pause on your DPDP compliance audits. Draft those fresh privacy notices, implement verifiable consent mechanisms, and ensure your clients have mapped their data flows. Simultaneously, for your IP clients, prepare for a new era where traditional copyright concepts are being heavily diluted by courts struggling to understand the mechanics of machine learning. The era of "wait and watch" is over; the era of defensive, agile lawyering is here.