The recent Calcutta High Court ruling in IndiaMART InterMESH Ltd. V. OpenAI Inc. addressed the key issue of whether algorithmic systems can be governed by statutory provisions preceding their advent.

The dispute arose in late 2025 when IndiaMART, India’s largest B2B e-commerce marketplace, alleged that ChatGPT’s search feature deliberately excluded links referencing its platform and provided responses covering its competitors. IndiaMART claimed this algorithmic “silence” constituted trademark dilution thereby causing it pecuniary loss. OpenAI however, stated that private artificial intelligence (“AI”) platforms cannot be compelled to guarantee visibility, asserting that no statutory or constitutional right to platform visibility exists and therefore no such right has been infringed in the instant case.

The Calcutta High Court (“HC”), whilst dissecting IndiaMART's claims, held that algorithmic omission cannot be equated with legal injury. It also observed that:

(a) Mere Silence is not Infringement: The court ruled that failing to feature a brand’s URL lacks the foundational elements of public dissemination, consumer deception, or commercial use required under the Trade Marks Act, 1999.

(b) Commercial Autonomy and the USTR Defense: OpenAI’s choice to exclude IndiaMART was driven by the marketplace’s inclusion on the US Trade Representative’s Notorious Markets List. The HC rooted its refusal of interim relief in the doctrine of laissez-faire, stating that private tech enterprises bear no common  law obligation to protect the commercial interests of third parties.

Under the Information Technology Act, 2000 (“IT Act”), an intermediary enjoys immunity or safe harbour towards third-party content. However, because Large Language Models (“LLMs”) go beyond electronic records on the internet to actively synthesize, curate, and generate entirely new outputs rather than merely hosting or referencing external third-party links, they are akin to an “originator” under Section 2(1)(za) of the IT Act.

While an LLM curates fresh content, the HC acknowledged that its output cannot be generated without a user’s prompt (which is why the terminology for Generative AI is referred to as ‘machine learning’). Therefore, given that AI cannot suo moto generate its content, AI is the resource, and the intermediary i.e. ChatGPT is the provider of the resource. The user herein, would be the originator.

However, by denying IndiaMART an interim injunction, the HC drew a critical distinction between passive digital platforms and generative AI models. The HC observed that because LLMs actively synthesize, curate, and generate entirely new outputs rather than merely hosting or referencing third-party links, they function less like passive intermediaries and would be classified as “originators” under the IT Act. Thereafter, the Court referred the dispute for final hearing.

The Calcutta High Court's detailed ruling In IndiaMART InterMESH Ltd. V. OpenAI Inc. roots its refusal of interim relief in the classical economic doctrine of laissez-faire, asserting that a private tech enterprise bears no common-law obligation to promote the commercial interests of a third party or guarantee its platform’s visibility. Rejecting the notion that ChatGPT acts as a traditional search engine or intermediary, the Calcutta High Court highlighted that classifying a generative AI platform as either an “intermediary” or an “originator” under the IT Act is a mixed question of law and fact. Because the current statutory definitions reflected under the IT Act precede the advent of AI, more particularly generative AI platforms, wherein only human or corporate entities could generate data messages, the matter is pending for final hearing.

While the judiciary scrutinises the outputs of Generative AI against intellectual property and technology laws in India, the legislature and executive of India are in the midst of setting out frameworks governing prompts given to AI.

In December 2025, the Department for Promotion of Industry and Internal Trade (“DPIIT”) through its working paper on Generative AI and Copyright addressed the issue of machine learning inputs vis-à-vis copyright laws.

Section 14 of the Copyright Act, 1957 provides for exclusive rights possessed by copyright owners. Any reproduction, storage, adaptation or public dissemination without a valid license from the copyright owner would amount to an infringement under Section 51 of the Copyright Act, 1957 unless such use is covered under Section 52 of the Copyright Act, 1957. Under the current framework, there is no specific exemption under copyright laws for text and data mining or for AI training purposes.

Further, given that the fair use doctrine as set out under Section 52 of the Copyright Act, 1957 carves out an exception for using copyrighted material for private or research purposes, such defence is both narrowly defined and purpose specific.

Rather than relying on a case-by-case “fair use” defence or adopting text and data mining exemptions, DPIIT’s working paper introduces a state-orchestrated mandatory blanket licensing regime. Under this framework, AI developers are permitted to train foundational models on Indian content in exchange for statutory royalties, which are collected and distributed to rightsholders via a centralized, government-designated non-profit entity.

Thereafter, the Ministry of Electronics and Information Technology has also released the AI Governance Guidelines in order to facilitate the development of AI systems in India in a regulated fashion.

Given the accessibility of AI, regulatory focus must shift from restricting AI adoption to establishing robust frameworks that mitigate its potential to undermine legal systems. Currently, global AI development is characterized by fragmented, parallel ecosystems that train on massive datasets within closed loops, a trajectory that inevitably creates operational silos and algorithmic echo chambers. Consequently, to facilitate the safe proliferation of these technologies and avert a pervasive trust deficit, existing legal frameworks must be fundamentally re-evaluated and updated to ensure systemic accountability and alignment with legal norms.

About the author: Anusha Mohapatra is a Senior Associate at Vector Legal.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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