Judge Lets Reddit's DMCA Claims Against Perplexity Proceed

On July 31, U.S. District Judge Paul Engelmayer of the Southern District of New York delivered the ruling Perplexity AI had spent months trying to avoid: he refused to dismiss the core of Reddit's copyright case against the AI search startup and its data-scraping co-defendants, sending the dispute into discovery and, potentially, toward a landmark trial on how AI companies are allowed to gather web content68. The decision did not decide who wins. But it did demolish, at least for now, the two defenses that every AI company facing a scraping lawsuit has been queuing up to use — that publicly accessible data is fair game, and that a platform whose users authored the content has no business suing over it24.

What the Judge Actually Ruled

Reddit filed the suit in October 2025 in Manhattan federal court, naming not just Perplexity but three intermediaries in the data supply chain: Lithuania-based proxy giant Oxylabs, the Russia-linked AWMProxy network, and Texas-based SerpApi, which sells APIs that extract search engine results pages and convert them into machine-readable data48. The central allegation is that when direct scraping of Reddit proved too difficult, the defendants pivoted to pulling Reddit content out of Google's search results, bypassing both Reddit's anti-scraping measures and Google's SearchGuard anti-bot system along the way416.

Engelmayer's order is a mixed result in form but a decisive one in substance. He sustained Reddit's DMCA Section 1201(a) anti-circumvention claims against both Perplexity and SerpApi, finding that Reddit "epitomizes the 'global digital on-line marketplace for copyrighted works' that the DMCA sought to promote" and that its injuries fall within the zone of interests the statute protects10. Critically, he accepted — at the pleading stage — that Google's SearchGuard can count as a "technological measure" controlling access to protected works, even though Google, not Reddit, built it610. He also let stand Reddit's civil conspiracy claim and found Reddit has standing to sue over misuse of its users' content8.

The judge did trim the case. He dismissed a DMCA trafficking claim against SerpApi and threw out Reddit's state-law unfair competition and unjust enrichment claims as preempted by the Copyright Act5610. And the allegations he credited are pleading-stage assumptions: the case now moves to discovery, where Reddit's theory gets tested against the actual mechanics of Perplexity's data pipeline14.

The Standing Defense Just Took a Direct Hit

The most consequential part of the ruling for the wider AI industry is what it does to the standing argument. Perplexity and SerpApi urged the court to toss the suit on the theory that Reddit cannot claim a copyright interest in posts written by its users29. Engelmayer rejected that framing on two grounds: Reddit holds independent copyright in its curated arrangement of user-generated content, and the alleged circumvention of its technical protections inflicts reputational harm sufficient to sustain a lawsuit even without a demonstrated economic loss2. The reputational theory is unusually concrete — Reddit argued it promises users they can delete their posts and requires licensing partners like Google to honor those deletions, but data scrapers operating outside any agreement strip Reddit of the ability to give effect to those requests16.

A Perplexity spokesperson framed the stakes in the company's own terms: "Reddit's suit claims the right to control access to public web pages it doesn't own, using a security tool it didn't build, on behalf of users it hasn't asked. We're going to defend the open internet, and we're going to win"8. SerpApi's counsel, Jeff Homrig, made the narrower point that his client "accesses public search results, not Reddit's platform," and that public information does not become protected simply because a platform wants to charge for it512. Those are coherent positions — and the court just told both companies they will have to prove them at trial rather than win on a motion.

Why This Case Is Different From the AI Copyright Pile-On

The Reddit suit sits inside a crowded docket — one of more than 40 active AI copyright cases in U.S. courts, with authors, music labels, and news publishers all suing AI developers over training data612. Perplexity itself faces separate suits from the New York Times, Dow Jones, the New York Post, the Chicago Tribune, CNN, and Encyclopedia Britannica12. Reddit also has a parallel data-scraping case against Anthropic still pending in California state court8.

What distinguishes this litigation is that it is not primarily a fight over whether copying occurred. It is a fight over method. Reddit's theory targets the alleged industrial-scale circumvention of access controls — rotating IP addresses, routing around CAPTCHA-based defenses, laundering data through intermediaries — rather than the mere fact of ingestion1. That framing matters because it bypasses the hardest question in AI copyright law, fair use, and replaces it with a question courts are more comfortable answering: did someone pick a lock? As Engelmayer's ruling signals, courts are increasingly willing to scrutinize not just what data AI companies collect, but how they collect it4.

The case is also economically distinctive. Reddit has signed licensing deals with Google and OpenAI for AI training access, and Perplexity holds no license; Reddit describes the lawsuit as defense of that paid-access model against a free rider6. Some observers read the dual strategy — monetize through partnerships, litigate against non-payers — as a template other content platforms will copy.

The Contradiction With the Google Ruling

Here is where the coverage demands a careful reading, because the same week produced two rulings pointing in opposite directions. Less than two weeks before Engelmayer's order, Judge Yvonne Gonzalez Rogers in the Northern District of California dismissed Google's own complaint against SerpApi, holding that Google could not pursue an anti-circumvention claim over scraping of search results material that Google had not licensed and in which it held no copyright interest916. That outcome appeared to gut the DMCA theory against data brokers — and Meredith Rose of Public Knowledge told Time News that standing under the DMCA is normally reserved for the copyright owner, an exclusive licensee, or the entity that actually deployed the protection measure, none of which describes Reddit in this scenario5.

Engelmayer's ruling cuts the other way, at least preliminarily. The most likely reconciliation is that Reddit pleaded a richer record than Google did: it cited tens of thousands of posts and comments authored by Reddit itself, including an admin-written 700-word history of a subreddit's origin, and tied the circumvention to concrete harms to its own deletion promises and reputation16. In other words, the standing gap is survivable if a platform can show it owns something in the scraped corpus and that circumvention injured it. That is a harder pleading standard than most user-generated-content platforms assumed they needed to meet — and, per the Playwire analysis, the practical instruction to publishers is to document robots.txt directives, log when anti-scraping measures were implemented, and assess whether their editorial curation constitutes protected arrangement2.

What Discovery Will Test — and Why the Supply Chain Should Worry

Discovery is where Perplexity's defense gets its real test. Two escape hatches remain open: the defendants could show that Reddit never actually authorized Google to protect its content in search results, or that publicly accessible material in Google SERPs is simply not protected by the Copyright Act at all5. Reddit, meanwhile, built a trap it will now get to spring — the company says it published a test post visible only to Google's crawlers and watched it surface in Perplexity's answers, evidence it argues proves the SERP-scraping pipeline.

The intermediaries now have skin in the game too. The suit's inclusion of Oxylabs, AWMProxy — described in filings as a network with ties to malware botnets — and SerpApi signals that liability can run up the entire data supply chain, not stop at the AI company that consumed the output. The DataImpulse analysis for data teams draws the obvious conclusion: "we only bought the data from a vendor" is a shrinking defense, and every participant from proxy provider to end user now faces documented legal risk if the data's origin involved bypassing access controls.

My own reading: Engelmayer's order is the strongest signal yet that the DMCA — a 1998 statute written for DVD encryption — is being retrofitted as the enforcement mechanism for platform consent on the modern web. Perplexity's public bravado about "the open internet" is a fair argument as policy, but as law it just lost its first major test. The company, valued around $20 billion and under pressure from publishers on multiple fronts — including a German media regulator's decision to classify Perplexity as a content provider and strip a liability shield — now faces years of discovery into exactly how its answer engine was fed12. If Reddit can prove a coordinated circumvention scheme, the precedent reaches every AI company that built a data pipeline around someone else's robots.txt. The era of scraping first and litigating later is not over — but for the first time, courts are pricing in the risk4.