TL;DR
A federal judge has delayed approving Anthropic’s $1.5 billion copyright settlement after objections from authors and critics. Concerns focus on excessive legal fees and inadequate author payouts, with ongoing disputes about the settlement’s fairness.
A federal judge has delayed final approval of Anthropic’s $1.5 billion copyright settlement amid objections from authors and critics over legal fees and compensation fairness, marking a significant setback for the tech company’s efforts to resolve allegations of widespread book piracy used to train AI models.
On Thursday, US District Judge Araceli Martinez-Olguin declined to approve the settlement, citing the need to better understand objections raised by authors and class members. The settlement, regarded as the largest in US copyright history, involves over 480,000 works and a proposed payout of approximately $3,000 per author. However, objections have emerged concerning the attorneys’ request for more than $320 million in legal fees, which critics argue is disproportionate given the small individual payouts. One objector, Pierce Story, claimed that the lawyers’ fees could amount to $10,000–$12,000 per hour, a figure he labeled excessive, referencing a prior case where similar fees were deemed unreasonable. Story and other objectors also contend that the legal team promised to tie their compensation to the actual payouts to authors but are now seeking a large share of the settlement fund regardless of how many authors claim benefits. Additionally, some authors have yet to register claims, raising concerns about the fairness of the fee distribution. The objections prompted the court to seek further clarification from the authors’ legal team and to consider whether attorney fees should be adjusted. Meanwhile, a group of 25 class members has filed a separate lawsuit opting out of the settlement, indicating ongoing legal challenges. The court has set a deadline of May 21 for authors to respond to objections, and Anthropic must also submit a brief defending its handling of late opt-outs.
Why It Matters
This delay highlights ongoing tensions in large-scale class-action settlements, especially regarding attorney fees and fair compensation for affected authors. The case underscores concerns about transparency and fairness in how settlement funds are distributed, which could influence future copyright and AI training disputes. The outcome may also impact Anthropic’s reputation and its ability to resolve the case swiftly.
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Background
The settlement stems from allegations that Anthropic used a vast amount of copyrighted books without proper authorization to train its AI models. Previously, Judge William Alsup approved the settlement, but he expressed concerns about the high legal fees and called for an independent review, though this was not disclosed to the current judge or the class members. The legal dispute reflects broader issues in AI training practices, copyright law, and class-action procedures, with this case representing one of the largest settlements involving copyright infringement related to AI development.
“Every dollar that Counsel takes from the Settlement fund is one that is not given to those actually harmed.”
— Pierce Story, objector and author
“The recommendation for an independent investigation was not fully disclosed to the current judge or class members.”
— Lea Bishop, copyright law professor and objector
“Anthropic must agree to destroy all copies of my works before the settlement proceeds.”
— James R. Sills, class member
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What Remains Unclear
It is still unclear whether the court will approve a revised settlement, how attorney fees will be adjusted, or if Anthropic will agree to restrictions on future use of pirated works. The outcome of the May 21 hearing remains pending.
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What’s Next
Authors and other stakeholders will submit responses to objections by May 21. The court will then review these submissions and decide whether to approve the settlement or require modifications. A final decision is expected shortly after the hearing. Additionally, the ongoing lawsuit from class members opting out could influence the final approval process.
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Key Questions
Why has the settlement approval been delayed?
The judge delayed approval to better understand objections related to attorney fees, author compensation, and transparency concerns raised by authors and critics.
What are the main objections to the settlement?
Objections focus on the high legal fees requested by attorneys, inadequate payouts to authors, and concerns over the handling and future use of pirated works.
Could the settlement be rejected entirely?
Yes, if the court finds the objections valid and the issues unresolved, it could reject or require modifications before approval.
What happens if the settlement is approved?
If approved, the settlement would resolve the claims against Anthropic, with authors receiving payouts and legal fees distributed as determined by the court.
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