The settlement will see Anthropic paying out $3,000 to around 500,000 authors.
In what looks to be the largest payout in the history of US copyright cases, Anthropic will pay $1.5bn to settle with book authors whose copyrighted materials were illegally downloaded to train the AI-chatbot Claude.
A few weeks ago, the generative AI (GenAI) giant decided to settle with a trio of authors who, in their lawsuit, claimed that “largescale theft of copyrighted works” is a key component of Anthropic’s business model. They said that the company took multiple steps to hide the full extent of its copyright theft.
The case was certified as a class action in July, the first in a copyright litigation against AI companies. The class included copyright owners whose works were in LibGen and PiLiMi – shadow libraries of pirated materials – which were downloaded by Anthropic.
The presiding judge found that Anthropic illegally acquired millions of books through shadow libraries, but ruled that the company was protected by fair use when using books to train its AI models.
At the time, Anthropic told courts that a settlement could kill the company, claiming that the plaintiffs’ demands created a “death knell” situation, regardless of the case’s legal merit. It was estimated that damages could easily rake up in the hundreds of billions.
This settlement, however, deals with materials the company downloaded through the pirated websites and will see Anthropic paying $3,000 to approximately 500,000 authors. Though the company says it did not use any of the pirated material to build AI tech that was publicly released.
Moreover, authors will retain all rights and legal claims regarding any books not on the settlement list and can still sue the company if they believe the company is reproducing their works without proper approval. Anthropic has agreed to destroy the files of all works it downloaded from the shadow libraries.
In a statement to news outlets, Anthropic’s deputy general counsel Aparna Sridhar reiterated the court’s judgement that the company’s approach to training AI was fair use. “Today’s (5 September) settlement, if approved, will resolve the plaintiffs’ remaining legacy claims,” Sridhar added.
While the plaintiff’s co-lead counsel Justin Nelson said: “This landmark settlement far surpasses any other known copyright recovery. It is the first of its kind in the AI era. It will provide meaningful compensation for each class work and sets a precedent requiring AI companies to pay copyright owners.”
Maria Pallante, the president and CEO of the Association of American Publishers, said that the settlement “provides enormous value in sending the message that Artificial Intelligence companies cannot unlawfully acquire content from shadow libraries or other pirate sources as the building blocks for their models.”
The settlement comes just as Anthropic raised $13bn in a funding round that now values the company at more than $180bn.
However, Anthropic has had success in other copyright disputes recently. Earlier this year, a California judge sided with the AI company by denying a motion for injunction filed by Universal Music Group, Concord and Capitol CMG, among several other large music publishers, that would have stopped the start-up from using their song lyrics to train its AI models.
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