Law360 (July 31, 2026, 6:36 PM EDT) -- A Manhattan federal judge on Friday largely declined to dismiss Reddit's suit accusing SerpApi of illegally scraping its content to be sold to Perplexity for training its artificial intelligence models.

U.S. District Judge Paul Engelmayer said in an order that he was "predominately" denying SerpApi and Perplexity's motions to dismiss the case, but would cut one Digital Millennium Copyright Act claim against SerpApi and state law claims for unjust enrichment and unfair competition. The judge preserved Reddit's claims under different sections of the DMCA and a claim for civil conspiracy under New York state law.

Judge Engelmayer recounted that the DMCA was enacted in 1998 at a time when Congress was mainly concerned about digital copyright infringement of cable television and videocassettes. The judge said AI had "added a new dimension" to the issue now that copyrighted works have been used to train AI models.

"Reddit has plausibly alleged causation: by accessing and scraping Reddit data using prohibited means, defendants infringe Reddit's copyright in its own works and undermine Reddit's protections for user content," the judge said.

Judge Engelmayer said Reddit's allegations of reputational harm were sufficient to give it standing to seek an injunction on further use of its user-generated content. Reddit allows users to delete posts, but the suit alleges third parties such as SerpApi strip users of that privacy protection, the judge said.

Reddit also had standing to seek damages, having pled an economic injury in the form of potential lost profits from a licensing agreement it could have had with Perplexity, the judge said.

Judge Engelmayer said the injuries alleged by Reddit are within the "zone of interests" protected by the DMCA, noting that the site "epitomizes" the global online marketplace for copyrighted works that the act was meant to safeguard.

The judge rejected SerpApi's argument that ingesting "snippets" via Google doesn't implicate the copyrights of Reddit or its users, saying the suit shows that Reddit's content "often consists of creative contributions from users" and that portions of that content can be scraped by Google search engine results.

The judge said Google's SearchGuard feature constitutes a technological protective measure under the law, because it is designed to prevent automated systems from accessing its results as opposed to human users. The allegations against SerpApi — that its system deploys "a server-swarm to hide from, avoid, or simply overwhelm by brute force" technological protective measures — constitute an allegation that it circumvented SearchGuard, Judge Engelmayer said.

The suit also alleges that Perplexity sets parameters for circumvention activity, making it "more than a bystander" to SerpApi's scraping activity, the judge said.

Judge Engelmayer found that Reddit's state-law claims for unjust enrichment and unfair competition were preempted by the Copyright Act, and dismissed those claims.

A Reddit spokesperson said in a statement that the ruling "brings us one step closer to holding bad actors accountable."

"Reddit supports responsible access to public content, but we oppose companies that bypass our protections, ignore our rules, and profit off our communities without permission," the spokesperson said. "Redditors create some of the most valuable human conversations on the internet. We intend to protect them."

SerpApi attorney Jeff Homrig of Weil Gotshal & Manges LLP said in a statement that "we remain confident in our position. The court has decided to hear the facts; the facts are on our side. SerpApi accesses public search results, not Reddit's platform, and public information does not become protected because a platform wants to charge for it. We look forward to making that case."

Perplexity's chief communications officer Jesse Dwyer said in a statement, "Reddit is asking a court to let it control access to web pages it doesn't own, through a presumed security control that it also doesn't own and which didn't even exist for the majority of the time alleged, and invoking protections its own lawyers told the court Redditors have no way to enforce. Perplexity fights for users' rights, we aggressively defend the open internet, and we expect the evidence in this case to support those positions."

Reddit is represented by Giovanni J. Sanchez, Matthew R. Ford and Reid M. Bolton of Bartlit Beck LLP and Justin T. Zimnoch and William A. Maher of Wollmuth Maher & Deutsch LLP.

Perplexity is represented by Christina Lee, Eric H. MacMichael, Sharif E. Jacob and Benjamin Rothstein of Keker Van Nest & Peters LLP.

SerpApi is represented by Nili T. Moghaddam, Jessica L. Falk, Sarah Ryu and Jeff Homrig of Weil Gotshal & Manges LLP.

The case is Reddit Inc. v. SerpApi LLC et al., case number 1:25-cv-08736, in the U.S. District Court for the Southern District of New York.

--Editing by Emily Kokoll.

For a reprint of this article, please contact reprints@law360.com.