Major Settlement in Anthropic’s Class Action Lawsuit: What It Means for AI Copyright
A significant shift has occurred in the ongoing class action lawsuit against Anthropic, a prominent AI startup. A preliminary settlement has been reached with a group of well-known authors, allowing the company to avert what could have been a financially crippling court outcome.
The details of this settlement are expected to be finalized by September 3, as noted in a recent legal filing. Anthropic, however, has opted not to comment publicly on the matter. Justin Nelson, one of the attorneys representing the plaintiffs, expressed optimism about the settlement, stating, “This historic settlement will benefit all class members. We look forward to announcing details in the coming weeks.”
Background on the Lawsuit
The legal battle traces back to 2024 when authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson filed a lawsuit against Anthropic. They claimed that Anthropic illegally utilized their works to enhance its artificial intelligence models. Earlier this year, Judge William Alsup ruled in Bartz v. Anthropic, mostly siding with the AI firm. The judge deemed that the utilization of the authors’ books was a case of “fair use,” thus rendering those particular claims legal. However, he did pinpoint that Anthropic’s acquisition of some works through shadow libraries, notably the infamous LibGen, amounted to piracy. This pivotal ruling has allowed the authors to continue seeking damages for this infringement through a class action trial scheduled for December.
Under U.S. copyright law, statutory damages for such piracy start at $750 per infringed work. With Anthropic allegedly housing a library of approximately 7 million works, potential penalties could skyrocket into the billions—potentially exceeding $1 trillion. Edward Lee, a law professor at Santa Clara University, commented on this development, noting the surprising nature of the settlement. “It’s a stunning turn of events, given how Anthropic was fighting tooth and nail in two courts in this case. But they had few defenses at trial,” he stated, addressing the immense risks Anthropic faced if the case had continued unfolding in the courtroom.
The Implications of the Settlement
As word of the settlement circulated, many authors within the class action began receiving notifications that they could participate. Earlier this month, the Authors Guild alerted writers about their potential eligibility, while the plaintiffs’ lawyers planned to submit a list of affected works by September 1. This means many authors might not have been privy to the negotiations leading up to the settlement.
Professor James Grimmelmann of Cornell University raised a critical question concerning the sentiment of the author class, stating, “The big question is whether there is a significant revolt from within the author class after the settlement terms are unveiled.” The reaction from this group will serve as an important barometer of copyright owner sentiment in the ongoing dialogue regarding AI and copyright laws.
While Anthropic has reached this settlement, it still faces a myriad of copyright-related legal challenges. A notable dispute involves major record labels like Universal Music Group, which contend that Anthropic unlawfully trained its AI programs on copyrighted lyrics. Recent filings from these plaintiffs suggest that Anthropic may have used peer-to-peer file sharing services like BitTorrent to download songs illegally.
Although settlements do not create legal precedent, the details of this case will likely be monitored closely by legal experts and the tech community alike. As various high-profile AI copyright cases continue navigating the judicial landscape, this settlement marks a crucial moment in the discussion surrounding the intersection of artificial intelligence and intellectual property rights.