A U.S. federal judge on Thursday pressed attorneys for more specific disclosures about several elements of Anthropic’s proposed $1.5 billion settlement with authors who contend their books were used without permission to train the company’s AI chatbot, Claude. The judge did not give the settlement final approval at the San Francisco hearing, instead asking counsel to provide additional detail on points including the size of lawyers’ fees and the payments slated for lead plaintiffs.
The agreement is the largest known U.S. copyright settlement to date. Now-retired Judge William Alsup had initially approved the deal in September, but the matter returned to court this week for closer scrutiny under U.S. District Judge Araceli Martinez-Olguin. Martinez-Olguin’s questions left final sign-off pending while parties address the requested clarifications.
During the hearing, an attorney for the authors said that authors and other copyright holders filed claims covering over 92% of the more than 480,000 works included in the settlement. That breadth of claimed works is central to the settlement’s scope and to objections raised by some writers.
The settlement has drawn complaints from segments of the author community on several fronts. Objections include arguments that the payout is insufficient, that plaintiffs’ attorneys could be overcompensated, and that the agreement improperly excludes certain copyright owners. A group of more than 25 writers who opted out of the settlement, including Dave Eggers and Vendela Vida, filed a new complaint against Anthropic in California on Wednesday.
The lawsuit was originally brought in 2024, with authors alleging that Anthropic - a company backed by Amazon and Alphabet - used pirated versions of their books without permission to teach Claude how to respond to human prompts. In a separate ruling last June, Judge Alsup concluded that Anthropic’s use of the works for training Claude constituted fair use, but he found the company violated the authors’ rights by saving more than 7 million pirated books to a "central library" that might not be used for training.
A trial had been scheduled to begin in December to determine how much Anthropic might owe for the alleged piracy, with potential damages described as running into the hundreds of billions of dollars. The December trial date was intended to resolve the monetary aspect of the dispute if the settlement were not finalized.
In addition to the settlement at issue, authors and publishers pursuing similar claims have filed separate lawsuits against Anthropic that remain active. The new complaint by the opt-out group is among those continuing actions.
Summary
At a San Francisco hearing, a federal judge withheld final approval of Anthropic’s proposed $1.5 billion settlement with authors, requesting more detail on attorneys’ fees, payments to lead plaintiffs and other elements. The deal, initially greenlit last September by now-retired Judge William Alsup, covers claims on over 92% of more than 480,000 works and has prompted objections and additional litigation from authors who opted out.
Key points
- The judge demanded more detailed disclosures on lawyers’ fees and payments to lead plaintiffs before granting final approval.
- The settlement encompasses claims covering over 92% of the more than 480,000 works included in the agreement.
- The case affects the technology and publishing sectors, given the involvement of an AI firm backed by major tech companies and the large group of authors and publishers asserting copyright claims.
Risks and uncertainties
- Final approval remains uncertain as the judge seeks additional information - a risk to the settlement’s immediate implementation and to parties seeking closure.
- Ongoing separate lawsuits and the new complaint by authors who opted out create continued legal exposure for Anthropic and potential financial uncertainty for related stakeholders.
- Potential damages, as previously framed for trial, could be extremely large - with estimates described as running into the hundreds of billions of dollars - creating significant financial risk if the settlement fails to resolve all claims.