A sealing order confirms Britannica's lawyers have inspected Perplexity's source code
There is no coverage of this anywhere. It is the biggest thing to happen in this docket in months.
On 21st Aug, Magistrate Judge Sarah L. Cave granted a sealing request from Encyclopaedia Britannica and Merriam-Webster. The case is Encyclopaedia Britannica, Inc. v. Perplexity AI, Inc. (1:25-cv-07546, S.D.N.Y.).
The plaintiffs had asked to file parts of a joint letter and four exhibits under seal.
The reason the order gives is the disclosure: the sealed passages contain "information revealed during on-site inspection of Perplexity's source code and highly confidential discussion of Plaintiffs' business strategy".
That is a discovery milestone rather than a ruling. The case has passed the stage where a plaintiff argues about what a system likely does.
Its lawyers and experts have now sat with the code. They did so under a Source Code Protocol and a Confidentiality and Protective Order the court entered earlier.
This claim turns on how a system retrieves, stores and reproduces text. For that, the source code is the evidence.
This order is the first confirmation on the record that Britannica's side has seen it.
Be clear about what is not knowable from here. The joint letter itself is a dispute the parties have put to the magistrate judge.
Its substance is redacted, and plaintiffs filed public versions with the confidential lines removed. Those files are not free to download from the docket.
We have read the order and not the letter. Nothing in the order says what the inspection found.
A sealing order is not a finding about anything.
The two motions to dismiss in this case remain briefed with no ruling. Our docket table has said that since it was built.
Discovery often runs while motions that could end a case sit undecided. That is normal rather than a signal.