Historic $1.5 Billion Settlement in Authors’ Lawsuit Against Anthropic Raises Questions About AI and Copyright Law
In an unprecedented settlement, over half a million authors stand to receive payouts of at least $3,000 due to a historic $1.5 billion agreement in a class action lawsuit filed against Anthropic. This settlement represents the largest payout in U.S. copyright law history, although it falls short of being a true victory for creators, instead serving as another triumph for tech companies.
The race among tech titans to accumulate vast quantities of written content is intensifying, with the objective being to power innovative AI chat solutions such as ChatGPT and Claude. These cutting-edge products, despite their milquetoast outputs, pose a threat to the creative industries. The sophistication of these AIs increases with the ingestion of more data; however, having scraped much of the internet, these corporations are now facing a scarcity of new information.
In an effort to compensate for this dearth, Anthropic, the company behind Claude, resorted to pilfering millions of books from “shadow libraries” and feeding them into its AI. The Bartz v. Anthropic lawsuit is one of numerous legal battles instigated against tech giants like Meta, Google, OpenAI, and Midjourney over the legitimacy of training AI on copyrighted works.
The settlement, however, does not stem from the authors’ work being fed to an AI. Instead, it serves as a costly reprimand for Anthropic, a company that recently secured another $13 billion in funding, for illegally downloading books rather than purchasing them.
In June, federal judge William Alsup ruled in favor of Anthropic, asserting that training AI on copyrighted material is indeed legal under the fair use doctrine, a provision of copyright law that has remained unaltered since 1976. The judge contends that this specific application of AI is transformative enough to fall under the protection of this carve-out.
“Like any reader aspiring to be a writer, Anthropic’s LLMs were trained upon works not to race ahead and replicate or supplant them — but to turn a hard corner and create something different,” Judge Alsup stated.
The piracy, rather than the AI training, prompted Judge Alsup to bring the case to trial; however, with Anthropic’s settlement, a trial is no longer required.
Aparna Sridhar, deputy general counsel at Anthropic, commented on the settlement: “Today’s agreement, if approved, will resolve the plaintiffs’ remaining legacy claims. We remain dedicated to developing safe AI systems that help people and organizations extend their capabilities, advance scientific discovery, and solve complex problems.”
As more legal battles emerge concerning the intersection of AI and copyrighted works, judges can now refer to Bartz v. Anthropic as a precedent. Nevertheless, given the far-reaching implications of these decisions, another judge may reach a different verdict in the future.
