A federal judge has dealt a significant blow to Anthropic PBC's proposed $1.5 billion copyright settlement, expressing serious concerns about its fairness and completeness. Judge William Alsup of the US District Court for the Northern District of California denied the proposal without prejudice, citing a lack of transparency and concerns that authors might be shortchanged.
Alsup voiced his dissatisfaction during a hearing, stating that he felt "misled" by the presented information and requiring significantly more detail regarding the claim process for class members. He highlighted his unease about the substantial sum involved and the potential for those managing the settlement to prioritize their own interests over the authors'. The judge declared the agreement "nowhere close to complete," emphasizing the need for substantial revisions before he would consider preliminary approval.
The proposed settlement, intended to resolve a class-action lawsuit against Anthropic for downloading millions of pirated books, aimed to set a precedent for similar AI copyright litigation involving tech giants such as OpenAI, Meta, and Midjourney. While authors' counsel assured the court of their commitment to ensuring fair compensation, Judge Alsup remained skeptical, highlighting the common pitfalls of class-action lawsuits where monetary relief overshadows the needs of individual members.
The judge's criticism centered on crucial missing details, including a definitive list of works covered by the agreement and a robust plan for notifying potential class members. He stressed the importance of providing "very good notice" to ensure authors have ample opportunity to opt in or out, thus protecting Anthropic from future litigation based on the same issue. Alsup also raised concerns about the large number of attorneys involved in the settlement disbursement, ordering a streamlining of the process and specifying that their fees should be directly tied to the amount paid to the class members.
To address the judge's concerns, the parties must submit a final list of the approximately 465,000 works by September 15th. Furthermore, Alsup mandated a claim form requiring explicit opt-in from copyright owners, with any disputes regarding ownership to be handled in state court. The revised settlement will require significant recalibration, impacting its potential role as a template for future AI copyright disputes. The case continues, with the path forward uncertain for Anthropic and the authors involved.
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Originally published at: https://news.bloomberglaw.com/ip-law/anthropic-judge-blasts-copyright-pact-as-nowhere-close-to-done
