Anthropic agrees to pay $1.5B to settle lawsuit with book authors

Summary

In a landmark settlement, Anthropic, a leading artificial intelligence company, has agreed to pay $1.5 billion to a group of authors and publishers after a judge ruled it had illegally downloaded and stored millions of copyrighted books.The settlement is the largest payout in the history of U.S. copyright cases. Anthropic will pay $3,000 per work to 500,000 authors.The agreement is a turning point in a continuing battle between A.I. companies and copyright holders that spans more than 40 lawsuits across the country. Experts say the agreement could pave the way for more tech companies to pay rights holders through court decisions and settlements or through licensing fees.“This is massive,” said Chad Hummel, a trial lawyer with the law firm McKool Smith, who is not involved in the case. “This will cause generative A.I. companies to sit up and take notice.”The agreement is reminiscent of the early 2000s, when courts ruled that file-sharing services like Napster and Grokster infringed on rights holders by allowing copyrighted songs, movies and other material to be shared free on the internet.“This is the A.I. industry’s Napster moment,” said Cecilia Ziniti, an intellectual-property lawyer who is now chief executive of the artificial intelligence start-up GC AI.The settlement came after a ruling in June by Judge William Alsup of the U.S. District Court for the Northern District of California. In a summary judgment, the judge sided with Anthropic, maker of the online chatbot Claude, in significant ways. Most notably, he ruled that when Anthropic acquired copyrighted books legally, the law allowed the company to train A.I. technologies using the books because this transformed them into something new.“The training use was a fair use,” he wrote. “The technology at issue was among the most transformative many of us will see in our lifetimes.”But he also found that Anthropic had illegally acquired millions of books through online libraries like Library Genesis and Pirate Libra...