Anthropic has filed a consent motion with the Ninth Circuit asking to stay its appeal of a federal district court ruling on class certification.
This is because the company has signed a binding term sheet with the plaintiffs intended to memorialize the terms of a proposed class settlement.
The plaintiffs — journalists and book authors — filed suit in 2024 alleging that Anthropic used “hundreds of thousands of copyrighted books” from unauthorized sources to train Anthropic’s Claude AI chatbot.
Anthropic is backed by Amazon and Alphabet (Google).
The district court had granted summary judgement for Anthropic in part, finding that its use of the copyrighted works for training was fair use under US copyright law.
However, the district court also found that Anthropic had used and saved to a central library pirated copies of as many as seven million works for training and ordered a trial to determine damages.
The trial on damages had been scheduled to begin in December.
Under US copyright law, damages for willful copyright infringement can be up to $150,000 per work – in this case, up to $1,050,000,000,000 – more than one trillion dollars.
As the New York Times reported, Anthropic announced after the settlement that it had “completed a new funding round that valued it at $183 billion, up nearly three times from about $61.5 billion six months ago.”
The Times noted that
Before the end of the year, five companies — Amazon, Google, Meta, Microsoft and OpenAI — also plan to spend more than $300 billion combined on the data centers used to build new A.I. technologies. That is $100 billion more than the annual budget of Belgium.
The spending has accelerated even as A.I. technologies, which are expensive to build and deliver compared with traditional online services, often remain in the red. Almost eight in 10 businesses have started using generative A.I., but just as many have said it has had “no significant bottom-line impact,” according to recent research from McKinsey.
As Wired reported,
Most authors who may have been part of the [Anthropic] class action were just starting to receive notice that they qualified to participate. The Authors Guild, a trade group representing professional writers, sent out a notice alerting authors that they might be eligible earlier this month, and lawyers for the plaintiffs were scheduled to submit a “list of affected works” to the court on September 1. This means that many of these writers were not privy to the negotiations that took place.
But Anthropic’s legal problems aren’t all over. As Wired notes,
Anthropic is still facing a number of other copyright-related legal challenges. One of the most high-profile disputes involves a group of major record labels, including Universal Music Group, which allege that the company illegally trained its AI programs on copyrighted lyrics. The plaintiffs recently filed to amend their case to allege that Anthropic had used the peer-to-peer file sharing service BitTorrent to download songs illegally.
Also, as the New York Times reported, Reddit
claimed that Anthropic had obtained access or tried to obtain access to Reddit data more than 100,000 times, in a breach of the online platform’s content policies. Anthropic also declined to enter into a licensing agreement for the data, the lawsuit said, and unjustly enriched itself at Reddit’s expense.
Other AI companies are dealing with similar litigation. As Reuters notes,
The [Anthropic] lawsuit was one of several brought by authors, news outlets and other copyright owners against companies including OpenAI, Microsoft and Meta over their AI training.
This class action settlement will not set any legal precedent for other cases but may influence the settlement positions of the parties in other lawsuits.
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