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OpenAI's intellectual property indemnification for API and Enterprise customers is subject to six enumerated exclusions including customer knowledge of infringement, disabling of safety features, modification or combination with non-OpenAI products, lack of input rights, trademark-based claims, and Third Party Offering outputs.
This analysis describes what OpenAI's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This provision establishes that the IP indemnification offered to API and Enterprise customers contains six specific carve-outs that significantly condition the scope of coverage; customers who modify outputs, disable safety features, or use third-party offerings within their workflows may find that indemnification coverage does not apply to resulting claims.
Interpretive note: The scope of carve-out (i) involving constructive knowledge of infringement and carve-out (iii) involving combination with non-OpenAI products may be interpreted differently depending on jurisdiction and specific deployment context.
The updated terms establish new licensing provisions for customers who download and install software components (Licensed Materials) on their own systems. Under the revised terms, OpenAI grants a limited, non-exclusive, non-transferable license to install and use Licensed Materials solely in connection with the Services, but customers may not modify, redistribute, or sublicense the materials. Upon termination of service, customers must permanently delete the Licensed Materials. Additionally, OpenAI introduced a new ChatGPT Sites feature for creating and publishing websites, with use governed by separate ChatGPT Sites Terms. You can review the ChatGPT Sites Terms via the referenced link to understand specific conditions for website creation and maintenance.
View change record →Under this clause, API and Enterprise customers bear IP infringement liability in circumstances where outputs are modified, safety features are disabled, third-party content is involved, or inputs lacked proper rights. The agreement requires customers to assess each of these six conditions against their specific deployment workflows to determine whether indemnification coverage applies.
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"This indemnity does not apply where: (i) Customer or Customer's End Users knew or should have known the Output was infringing or likely to infringe, (ii) Customer or Customer's End Users disabled, ignored, or did not use any relevant citation, filtering or safety features or restrictions provided by OpenAI, (iii) Output was modified, transformed, or used in combination with products or services not provided by or on behalf of OpenAI, (iv) Customer or its End Users did not have the right to use the Input or fine-tuning files to generate the allegedly infringing Output, (v) the claim alleges violation of trademark or related rights based on Customer's or its End Users' use of Output in trade or commerce, and (vi) the allegedly infringing Output is from content from a Third Party Offering.Excerpt from OpenAI's Service Terms
(1) REGULATORY LANDSCAPE: This provision engages copyright law frameworks including the Digital Millennium Copyright Act in the US and the EU Copyright Directive, as it directly addresses liability allocation for AI-generated content that may infringe third-party intellectual property. The carve-out for trademark-based claims also implicates the Lanham Act and equivalent EU trademark regulations. (2) GOVERNANCE EXPOSURE: High. The six carve-outs are broadly drafted, particularly conditions (i) (constructive knowledge of infringement) and (iii) (combination with non-OpenAI products), which could encompass common enterprise deployment patterns such as retrieval-augmented generation pipelines or multi-vendor AI stacks. Customers relying on OpenAI's indemnification as a risk transfer mechanism should map each carve-out against their actual deployment architecture. (3) JURISDICTION FLAGS: EU customers face heightened exposure given the EU Copyright Directive's text and data mining provisions and the developing regulatory environment around AI-generated content liability. US customers should evaluate carve-out (i) under the constructive knowledge standard, which may be interpreted broadly depending on industry context. (4) CONTRACT AND VENDOR IMPLICATIONS: Enterprise procurement and legal teams should treat these six carve-outs as conditions precedent to indemnification coverage and include them in third-party contract risk assessments. Customers who have represented to their own clients that AI-generated outputs are indemnified by OpenAI should review the accuracy of those representations in light of these carve-outs. (5) COMPLIANCE CONSIDERATIONS: Customers should document their use of OpenAI's citation, filtering, and safety features in order to preserve indemnification eligibility under carve-out (ii). Input rights and fine-tuning file ownership should be audited prior to deployment to address carve-out (iv).
This provision establishes that the IP indemnification offered to API and Enterprise customers contains six specific carve-outs that significantly condition the scope of coverage; customers who modify outputs, disable safety features, or use third-party offerings within their workflows may find that indemnification coverage does not apply to resulting claims.
Under this clause, API and Enterprise customers bear IP infringement liability in circumstances where outputs are modified, safety features are disabled, third-party content is involved, or inputs lacked proper rights. The agreement requires customers to assess each of these six conditions against their specific deployment workflows to determine whether indemnification coverage applies.
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