Judge Rebukes Anthropic Copyright Settlement

Yesterday, I examined the settlement AI company Anthropic had reached with authors in a class action lawsuit.

In that article, I discussed how, despite the eye-wateringly high settlement amount, the settlement was woefully incomplete and did not address core issues surrounding AI training and would do little to help the vast majority of authors.

Shortly after the article went live, Judge William Alsup, the judge in the case, held a hearing during which he tore into the settlement, stating that it was incomplete and that too many questions remained unanswered.

Judge Alsup stopped short of completely rejecting the settlement. Instead, he scheduled a follow-up hearing on September 25 to discuss the settlement. He also established a series of deadlines between now and then for the two parties to provide more details.

However, even if those deadlines are met, Judge Alsup expressed considerable skepticism. He said, “We’ll see if I can hold my nose and approve it.”

But while the rebuke may be seen as a positive for critics of the settlement, the issues Judge Alsup has with the settlement don’t really apply to the problems I raised in the previous article.

Where I focused more on the big-picture issues with the settlement, the judge’s issues focus more on the details, including which books are eligible, how many authors are at issue, and how they will be paid. While these are important issues, they don’t address the primary reason why so many are critical of this deal.

However, those larger issues likely can not be addressed, at least through this process.

How We Got Here

To recap, the lawsuit was initially filed by a small group of authors who sought to have it become a class-action case. They alleged that Anthropic had illegally used their work in two separate ways. The first was by using it to train various AI systems, and the second was pirating the content.

Judge Alsup had previously ruled that the AI training was protected under the doctrine of fair use. However, since Antrhopic had obtained an estimated 7 million books as part of pirate libraries, he granted the class action status and allowed the piracy claims to move forward.

That, in turn, is what prompted the settlement. Anthropic agreed to pay $3,000 for each pirated work that was part of the class. However, that class is not all the authors whose work was used or even all authors whose work was in those pirate libraries.

Instead, it only includes authors whose work was in the pirate libraries that had a timely US Copyright Office registration. This omits many foreign or independent authors who lack the knowledge or resources to register their work.

Despite those limitations, the settlement has seen broad support from trade groups representing authors and publishers. This includes the Authors Guild and the Association of American Publishers.

However, the involvement of those entities is one of the issues the judge has with the settlement and may be doing more to hinder its acceptance than help it.

Judge Alsup’s Criticism

According to Judge Alsup, his main issues with the settlement were that it was sparse on details. According to the Associated Press, he sought information about the claims process and how authors would be notified of the settlement.

He also wanted details on how many books were in the class. Though attorneys for the authors said that there were 465,000 books in the class, the judge wanted stronger guarantees that more lawsuits wouldn’t start “coming out of the woodwork.”

To that end, he set a series of deadlines. The parties have until September 15 to create a “drop-dead list” of the total number of pirated books. By September 22, the parties are required to submit a sample claim form for his review. All of this is ahead of a September 25 hearing to review the settlement again.

There is no guarantee that he will approve the settlement at that time. Judge Alsup also indicated that he has “An uneasy feeling about all the hangers on in the shadows,” referring to the various trade groups backing the deal.

If the judge declines to approve the settlement and no alternative agreement is reached, the case will likely proceed to trial on the issue of damages. Although it could expose Anthropic to greater damages, it could also cause a significant delay in the case.

As we’ve seen with other high-profile copyright cases, it’s not uncommon for them to take many years, often a decade or more.

That is likely a big part of why Anthropic is eager to settle this case. Not only would they settle the case while they have the upper hand, but it would also prevent years of this cloud hanging over their company.

Anthropic wants to move on; it remains to be seen if the judge will allow them to.

Bottom Line

To be clear, all of these are important questions, especially when there is so much money on the line. Judge Alsup is entirely correct in seeking all the details he can obtain and in ensuring that the settlement is distributed fairly and predictably.

However, the issues that I and others have with the settlement are more fundamental. While this settlement may be seen as great news for the relatively small class of authors who are a part of it, the vast majority of authors are on the outside looking in.

This is likely the best settlement that authors can get in this particular case, barring either a successful appeal or a significant change in the law. But that doesn’t stop it from hurting. If your work was ingested in any way other than through these specific pirate libraries or your work is not timely registered with the US Copyright Office, you are out of luck.

The impact of this settlement is ultimately limited. Although 500,000 is a substantial number of books, it pales in comparison to the vast amount of works scraped and ingested by AI systems. Even if this settlement is approved, Anthropic will not be addressing the vast majority of the content it used.

Regardless of what happens next, more cases, more uncertainty and more issues will remain. That much is for certain.