Anthropic, a prominent AI startup has reached a preliminary settlement in a massive class action copyright lawsuit brought by a group of prominent authors. The lawsuit had the potential for an astounding $1 trillion verdict against the company.
Wired reports that in a major development in one of the most high-profile AI copyright lawsuits in history, Anthropic has agreed to settle with a group of authors who alleged the company illegally used their work to train its AI models. The settlement, expected to be finalized on September 3, allows Anthropic to avoid a potentially devastating financial outcome if the case had gone to trial.
The lawsuit, filed in 2024 by authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, centered around claims that Anthropic had pirated their books, along with millions of other copyrighted works, to train its AI systems. While a California district court judge had previously ruled that Anthropic’s use of the books was largely protected under “fair use” laws, the judge also found that the manner in which the company acquired some of the works, through “shadow libraries” like LibGen, constituted copyright infringement.
Under U.S. copyright law, statutory damages for this type of piracy start at $750 per infringed work. With Anthropic’s AI training library thought to contain around 7 million pirated books, the company faced the prospect of over $1 trillion in court-imposed penalties — a sum that would have put almost any company out of business.
“It’s a stunning turn of events, given how Anthropic was fighting tooth and nail in two courts in this case. And the company recently hired a new trial team,” noted Edward Lee, a law professor at Santa Clara University closely following AI copyright litigation. “But they had few defenses at trial, given how Judge Alsup ruled. So Anthropic was starting at the risk of statutory damages in ‘doomsday’ amounts.”
Many authors who may have qualified for the class action were just starting to receive notice of their eligibility when the settlement was announced. The Authors Guild had only recently alerted its members, and plaintiffs’ lawyers were set to submit an official list of affected works to the court on September 1st. This means a large number of potentially impacted writers were not involved in the settlement negotiations.
According to James Grimmelmann, a professor of digital and internet law at Cornell University, the key question now is “whether there is a significant revolt from within the author class after the settlement terms are unveiled. That will be a very important barometer of where copyright owner sentiment stands.”
Breitbart News reported in June that Reddit has filed its own lawsuit against Anthropic claiming the AI company had scraped massive amounts of user posts from the popular platform to train its systems:
Reddit has taken legal action against Anthropic, a prominent AI startup, for what it claims to be a breach of contract and engaging in “unlawful and unfair business acts.” The lawsuit, filed in San Francisco, alleges that Anthropic has been using Reddit’s platform and data to train its AI models without proper authorization and in violation of Reddit’s user agreement.
According to the complaint, Anthropic has been unlawfully leveraging the personal data of Reddit users to train its AI models without obtaining their consent. Reddit argues that this unauthorized commercial use of its content has caused harm to the company. The lawsuit aims to seek damages and compel Anthropic to abide by its contractual and legal obligations.
Read more at Wired here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
