Anthropic $1.5 Billion Copyright Pact Wins Judge’s Approval (2)

A California federal judge granted preliminary approval of Anthropic PBC’s $1.5 billion settlement to resolve authors’ copyright class action over the AI company’s downloading of millions of pirated books.

Judge William Alsup said the settlement is “fair” and acknowledged potential complications with the claims process given the number of stakeholders. Lawyers need to be “excellent” to successfully manage the deal to an “ethical” end, he said.

“We have some of the best lawyers in America in the courtroom right now and I think you can do it,” Alsup said during the Thursday hearing in the US District Court for the Northern District of California.

Anthropic will pay about $3,000 for each of the 482,460 books it downloaded from pirate libraries Library Genesis and Pirate Library Mirror, and destroy the original and copied files. The parties struck a deal in August after the AI startup said it faced “inordinate pressure” to settle and avoid paying upwards of $1 trillion in statutory damages at a trial scheduled for December.

“We are grateful for the Court’s action today, which brings us one step closer to real accountability for Anthropic and puts all AI companies on notice they can’t shortcut the law or override creators’ rights,” said the class plaintiffs, Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson in a press release.

The deal is one of the first in the dozens of copyright lawsuits pending against AI giants including OpenAI Inc., Meta Platforms Inc., and Midjourney Inc., setting a potential benchmark for the companies to resolve similar claims.

Authors sued Anthropic in August 2024, alleging the AI company infringed their works by using them to train large language models. Anthropic secured a partial win in June when Alsup ruled that training AI on copyrighted works is fair use, but left to a jury piracy claims regarding the company’s downloading over 7 million copies of pirated books from two “shadow” libraries.

The decision comes weeks after Alsup on Sept. 8 postponed approval of the deal and slammed class lawyers over concerns they were striking a deal behind the scenes that would be forced “down the throat of authors.” Alsup raised questions about how the settlement would be executed across an expansive list of stakeholders, including how allocation disputes will be handled.

New Tone

Authors and publishers on Sept. 22 submitted an allocation plan that proposed an optional 50-50 split of the payout for most of the books and a tailored approach for education works. They assured Alsup the plan was designed to ensure fair and equitable distribution while balancing efficiency with the need to respect pre-existing contractual arrangements.

The parties’ answers to his urgent questions yielded a more amiable tone from Alsup, who on Sept. 8 said he planned to deny approval without prejudice, before ultimately delaying his decision.

Alsup had initially expressed concern about the proposed plan for ownership disputes between publishers and authors to undergo review by a settlement administrator and special master instead of judges. On Thursday he said the plan was acceptable if it’s clearly communicated to class members.

When asked to justify the fairness of the $3,000 payout, plaintiffs’ attorney Justin Nelson of Susman Godfrey LLP, told Alsup the “home run settlement” delivers substantial value to members because they risked receiving nothing if the case went to trial. He also noted Anthropic’s potential appeal of any verdict could drag on for years, and that Alsup could’ve de-certified their class at any point.

“Those are all very good points,” Alsup said, adding that Anthropic could’ve paid as little as $1 for hard copies of books to create copies of for training. “$3,000 is way more than that.“

The judge clarified that no attorneys’ fees would be paid until the settlement is complete and that it’s part of the “high roller” risk plaintiffs’ counsel took.

Alsup recognized that a new judge may have to be assigned to complete the settlement if he goes through with his plan to step down by the end of the year. He said he’s happy the plan is at least in place.

Nelson said the settlement website will go live immediately and that he hopes social media advertisements to spread word about the deal will start in the next week.

“I’ve learned a lot,” Alsup said, and ended the hearing.

Anthropic is represented by Cooley LLP, Arnold & Porter Kaye Scholer LLP, Latham & Watkins LLP, Lex Lumina LLP, and Morrison & Foerster LLP. Lieff Cabraser Heimann & Bernstein LLP, Cowan Debaets Abrahams & Sheppard LLP, Edelson PC, and Oppenheim + Zebrak LLP also represent the authors.

The case is Bartz v. Anthropic PBC, N.D. Cal., No. 24-cv-05417, hearing held 9/23/25.