AI Copyright Battle: Judge Threatens to Scuttle Anthropic’s $1.5 Billion Settlement

U.S. District Judge William Alsup has cast significant doubt on the proposed $1.5 billion settlement between artificial intelligence company Anthropic and authors who allege nearly half a million books were illegally pirated to train its chatbots. The judge’s strong skepticism, voiced during a hearing this past Monday, raises the distinct possibility that the landmark case could still proceed to trial, despite efforts to avert it.

Judge Alsup, who spent nearly an hour lambasting what he described as a settlement full of pitfalls, has scheduled a follow-up hearing for September 25. He has also set critical deadlines: a “drop-dead list” of all pirated books is due by September 15, and a revised claims form for his review must be submitted by September 22. “We’ll see if I can hold my nose and approve it” then, Alsup remarked, highlighting his deep reservations.

The judge’s primary concerns center on the fairness and transparency of the claims process, aiming to ensure all eligible authors are properly compensated and don’t “get the shaft.” He also demanded “ironclad assurances” that the estimated 465,000 pirated books would not swell, potentially exposing Anthropic to additional lawsuits. Alsup further expressed worries about organizations like the Authors Guild and the Association of American Publishers potentially pressuring authors “behind the scenes” to accept the deal without full understanding.

The proposed $1.5 billion settlement was announced just days before Monday’s hearing, intended to resolve the class-action lawsuit and avoid a trial scheduled for December. In June, Alsup had issued a mixed ruling, finding that while training AI on copyrighted books wasn’t illegal, Anthropic had wrongfully acquired millions of books from pirate sites for its Claude chatbot. The agreement would reportedly pay authors and publishers approximately $3,000 per covered book.

Maria Pallante, CEO of the Association of American Publishers, described the judge’s revised timeline as “troubling,” acknowledging the potential unraveling of the resolution. She suggested Alsup “demonstrated a lack of understanding of how the publishing industry works.” Conversely, Justin Nelson, an attorney for the authors, assured the court that extensive media coverage ensured widespread awareness, arguing it was “not an under-the-radar warranty case” and that funds would be fairly distributed. However, Alsup remains “leery” of the settlement, citing “an uneasy feeling about all the hangers on in the shadows,” and reiterating his willingness to let the case go to trial.

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