Microsoft filed a memorandum of law on 13 August opposing evidentiary sanctions that news plaintiffs are seeking against OpenAI — its largest investee and its co-defendant in the same case.
The unusual posture
"News Plaintiffs did not file this Motion against Microsoft and have not alleged that Microsoft had any role in any alleged spoliation," the brief says. It argues Microsoft must respond anyway "because of the significant risk of spillover prejudice to Microsoft if the Court were to issue the requested evidentiary sanctions and adverse inferences against OpenAI."
The argument
Microsoft tells the court there is "essentially no way to effectively instruct a jury" to apply an adverse inference to one defendant only, and that severing the trials would make matters worse, because OpenAI's witnesses "would be beyond the Court's subpoena power." It also says the requested bar on OpenAI relying on certain evidence would force Microsoft "at this eleventh hour to develop its own rebuttal evidence, at substantial expense."
What is being sanctioned
The underlying motion, filed 9 July 2026 by the New York Times, Daily News and other publishers, alleges OpenAI represented that it could not search its systems for plaintiffs' works when the capability already existed, and that conversation logs were deleted or rendered unsearchable.
Why the stakes are this high
An adverse-inference instruction would let a jury assume the missing material would have shown infringement. It is the most consequential evidentiary ruling available in the case, and the parties are heading into summary judgment briefing under word limits set on 7 August.
The alignment that just broke
Microsoft and OpenAI have been aligned defendants since the case was consolidated. This is the first filing in which Microsoft's interest in limiting its own exposure is on the record against a ruling its partner is fighting — and it is Microsoft telling the judge the two companies cannot be cleanly separated in front of a jury.