Stability AI is looking to get the generative AI-centric copyright and trademark infringement lawsuit waged against it by Getty Images tossed out – or at least transferred out of a federal court in Delaware – on the basis that the court lacks jurisdiction over it. In a motion to dismiss lodged with the U.S. District Court for the District of Delaware on Tuesday, Stability AI asserts that the court lacks personal jurisdiction over its UK-based arm Stability AI Ltd., which Getty added as a defendant when it amended its complaint on March 29. Part of the problem, according to Stability AI, is that the photo agency has “not even attempted to plead a statutory basis for jurisdiction” for Stability AI Ltd., which is a “necessary and indispensable party.”
In the newly filed motion, Stability AI, Inc. and Stability AI Ltd. (collectively, “Stability AI”) argue that Getty has not even attempted to make a case for jurisdiction under Delaware’s long-arm statute, as it “does not allege that any of the purportedly infringing acts regarding training Stable Diffusion occurred within Delaware.” Instead (and “although the amended complaint is vague in this regard”), Stability AI claims that Getty “appears to allege that the training took place in England and Germany,” pointing to the following language from the plaintiff’s amended complaint, “Stable Diffusion was trained . . . from Datasets prepared by non-party LAION, a German entity…”. Getty also does not allege that Stability AI Ltd. “contracted to supply services or things in Delaware,” per Stability AI.
In addition to lacking “any statutory basis for exercising personal jurisdiction over Stability AI Ltd., Getty also cannot establish that exercising jurisdiction comports with the U.S. Constitution,” Stability AI asserts, claiming that Getty “concedes, as it must, that Stability AI Ltd. is not ‘at home’ in Delaware,” thereby, failing to plead general jurisdiction.
Getty “does not allege that this is an ‘exceptional case’ where Stability AI Ltd.’s operations in Delaware are ‘so substantial and of such a nature as to render’ it subject to general personal jurisdiction in the State,” according to Stability AI. Moreover, the fact that Stability AI Ltd.’s parent company, Stability AI, Inc., is incorporated in Delaware “does not change the analysis. It is settled that a parent company’s forum contacts are not imputed to its subsidiary,” Stability AI maintains. And still yet, Getty’s attempt to overcome its jurisdictional shortcomings by relying on an alter ego theory fails, Stability AI argues, as Getty has “not attempted to allege that Stability AI [has] structured [its] corporate affairs in order to perpetrate a fraud on Getty or anyone else, much less demonstrate this alter ego relationship by clear and convincing evidence,” and does not allege “any facts to satisfy the high standards required to establish that separate companies are alter egos.”
At the same time, Stability AI contends that Stability AI Ltd. is also not subject to specific jurisdiction in Delaware, which requires a defendant to “both purposefully direct its activities at residents of the forum state and the action [to] arise from, or [be] directly related to, the defendant’s actions within the forum state.” Here, Getty “makes no allegation that Stability AI Ltd. made any copies of Getty’s copyrighted works in Delaware in connection with training Stable Diffusion.” In fact, Stability AI claims in response to Getty’s lawsuit that “there is no allegation that Stability AI Ltd. did anything with respect to training [its generative AI model] Stable Diffusion here.”
TLDR: “The Amended Complaint fails to allege any connection between Delaware and Stability AI Ltd.’s alleged infringing acts.” For these reasons, Stability AI argues that “this court lacks specific personal jurisdiction over Stability AI Ltd,” and thus, the court has “two options: dismissal or transfer.”
In case that is not enough, Stability AI claims that Getty’s amended complaint “also fails for another, and entirely different, reason: Having sought to lump Stability AI, Inc. and Stability AI Ltd. together to circumvent the amended complaint’s jurisdictional infirmities, Getty fails to identify which defendant is responsible for the alleged infringing acts.” Instead, Getty “improperly groups [the two entities together] under the collective designation ‘Stability AI’ and refers generically to Stability AI’s alleged infringement.” Since it is “well established that lumping allegations against a group of defendants is insufficient to state a claim—even when against a parent company and its subsidiary,” Stability AI argues that “Getty thus fails to satisfy the pleading standards of Rule 8(a), and this Court should dismiss this case.”
In sum, Stability AI asserts that dismissal is warranted because Stability AI, Ltd. “is not subject to personal jurisdiction and [it] is a necessary party that cannot be joined in this action.” Alternatively, “because this case could have been brought in the Northern District of California” – where Stability AI notes that a previously filed class action lawsuit over its generative AI model “is pending against both Stability AI, Inc. and Stability AI Ltd. [and] arises from substantially the same facts and circumstances and presents identical issues of law” – this court may transfer this case to that District.
To date, Getty – which set out claims of copyright infringement, trademark infringement and dilution, unfair competition, Deceptive Trade Practices in Violation of Delaware’s Uniform Deceptive Trade Practices Act – alleges that it has identified “over 12 million links to copyrighted images and their associated text and metadata on its websites in the datasets that were used to train Stable Diffusion.” On the back of “intellectual property owned by Getty Images and other copyright holders,” Getty argues in its lawsuit that Stability AI created its generative AI model, Stable Diffusion, which “uses artificial intelligence to deliver computer-synthesized images in response to text prompts.”
The case is Getty Images (US), Inc. v. Stability AI, Inc., 1:23-cv-00135 (D.Del.).