Anthropic Settles Major Copyright Class Action

We’ve been keeping up with Bartz v. Anthropic, the ongoing litigation against Anthropic in California. The case has already had major implications for what constitutes “fair use” in AI training, and now it may be setting another precedent. Rather than face trial over alleged copyright infringement, Anthropic has decided it’s better off settling the case. Anthropic repeatedly argued that if the Plaintiffs prevailed, potential damages from the class action would pose an existential threat to the company. Bloomberg reports:

“Anthropic said it found itself facing existential financial pressure within weeks of Alsup’s decision, dubbing the case “possibly” the largest copyright class actions ever. Santa Clara Law Professor Edward Lee had estimated damages could top $900 billion if a jury found Anthropic’s infringement was willful, while the company’s own chief financial officer told the court that Anthropic expects to receive no more than $5 billion in revenue this year while operating at a loss of billions of dollars.”

While Anthropic might be waving the white flag in this litigation, the company, and the AI industry on the whole, are not out of the woods yet on copyright litigation. Several intellectual property cases are still pending. This includes Reddit’s lawsuit against Anthropic based on alleged violations of Reddit’s licensing agreement. Could Bartz signal an incoming flood of settlements in other AI cases? Anthropic coming to the negotiating table is a sign that their lawyers believe the Plaintiffs have a decent chance of success. It also proves that copyright litigation against AI companies can be lucrative for the Plaintiffs’ Bar. That could encourage more Plaintiffs to bring copyright cases and seek new Defendants in the process.