Plaintiffs Propose Plan for Landmark $1.5 Billion Copyright Settlement Process with Anthropic

The author plaintiffs in the high-profile case against AI company, Anthropic, filed a “Supplemental Brief in Support of Motion for Preliminary Approval of Class Settlement” on Monday with the U.S. District Court for the Northern District of California. The filing addressed outstanding issues following the Court’s initial preliminary approval hearing on September 8, including the plan of distribution.

Earlier this month, Anthropic agreed to pay plaintiffs Andrea Bartz, Charles Graeber, Kirk Wallace Johnson, and MJ & KJ, Inc. and the Class what the plaintiffs called “the largest publicly reported copyright recovery in history, larger than any other copyright class action settlement or any individual copyright case litigated to final judgment.”

Bartz et. al., who are journalists and book authors, filed the initial lawsuit in August 2024 alleging that Anthropic’s widespread copyright infringement involves “hundreds of thousands of copyrighted books” from unauthorized sources used to train Anthropic’s Claude AI chatbot. Judge William Alsup denied Anthropic’s motion to stay proceedings pending appeal in August, following Anthropic’s request for permission to file an interlocutory appeal of Alsup’s June order on fair use.

The order on fair use granted summary judgment for Anthropic that its use of the works at issue for training and its scanning of certain works from print-to-digital format were fair, but denied summary judgment for Anthropic that certain pirated library copies of the relevant works must be treated as training copies and ordered a trial with respect to the pirated copies to determine damages, including potentially for willfulness.

As a result, according to the “Unopposed Motion for Preliminary Approval of Class Settlement” filed with the U.S. District Court for the Northern District of California on September 5, Anthropic will pay “at least $1.5 billion dollars, plus interest,” amounting to about $3,000 per 500,000 works in the Class. Furthermore, Anthropic will destroy the pirated datasets and will receive a “past release only” for conduct up to August 25, 2025. “This result is nothing short of remarkable,” wrote the plaintiffs.

According to the brief filed Monday, “[t]he Settlement provides an extraordinary monetary recovery to the class, releases only certain past claims, and requires the permanent destruction of the two allegedly pirated datasets.”

The brief outlined class counsel’s three objectives in proposing the settlement plan, stating they sought to create a process that:

(1) will result in a high claims rate that is efficient for claimants;

(2) respects pre-existing contractual relationships; and

(3) is consistent with due process and this Court’s guidance.

The brief asserted that “the process as outlined accomplishes these objectives.”

Notice Procedures Addresses Court’s Concerns

The brief further stated that “notice in this case will be comprehensive,” according to the filing. The plan includes direct notice via first-class mail and email, along with a “robust outreach plan” described in the filing, which will be implemented through social media, print and online publications, and targeted outreach by membership organizations in the United States and other countries.

The plaintiffs emphasized that direct notice will be sent to “both ‘the author and [] the publisher'” and will go “far beyond a ‘postcard,'” directly addressing specific concerns raised during the September 8 hearing. The notice program, with the Court’s approval, will be overseen by JND Legal Administration, which the brief noted has been “repeatedly approved as a Settlement Administrator by courts in this district in the last five years alone.”

The filing projected that the combined notice efforts will reach approximately 87.5% of likely class members, citing precedent that notice plans reaching 70% of class members are considered reasonable under Federal Rule of Civil Procedure 23.

Claims Procedure Designed for ‘Efficient and Equitable Distribution’

The brief detailed a claims procedure designed to “facilitate the efficient and equitable distribution of settlement funds,” according to the filing. The proposed claim form will allow claimants to “list every work for which the claimant seeks an award. It will also require the claimant to provide contact information about any other person who the claimant believes may be entitled to submit a claim related to the claimed work.”

This approach creates what the brief described as an “iterative process” where JND will contact identified potential claimants and then “communicate directly with all claimants for a work, identifying for them all other claimants of the work as well as the proposed split of the award among those claimants.” The brief argued this system will “permit the rapid and comprehensive submission of claims while concurrently ensuring that potential claimants are fully apprised from the beginning of the claims process to the very end.”

The filing emphasized that the claims process has been “carefully designed to maximize the efficient and fair distribution of Settlement funds by minimizing the upfront burden on claimants.” The plaintiffs proposed that “after extensive consultation with authors, publishers, the class representatives, and JND,” the form provides tailored solutions for complex ownership situations, according to the brief.

For works with multiple potential claimants, the brief outlined a system in which the claims administrator would facilitate communication between co-claimants and propose default award splits. The filing argued this approach “respects pre-existing contractual relationships” while ensuring fair compensation. For educational works, the process is “appropriately distinct in this regard. Given the lack of any clearcut basis for a default percentage split,” allowing parties to submit contracts or contract information for administrator review, said the brief.

Filing Claims Settlement Satisfies Rule 23 Standards

The brief proposed an “efficient, no-cost dispute resolution mechanism” to handle conflicts that may arise during the claims process, designed to provide resolution without requiring claimants to bear additional costs.

The proposed settlement “easily passes” the relevant tests for class action approval, said the plaintiffs. The filing contended that the notice plan will be “the best practicable under the circumstances” as required by Federal Rule of Civil Procedure 23 and  argued that the claims procedure satisfies Rule 23(e)(2)(C)-(D) standards by both deterring “unjustified claims” while not being “unduly demanding for bona fide claimants.”

In a press release sent by the plaintiffs, author Andrea Bartz said: “Together, authors and publishers are sending a message to AI companies: You are not above the law, and our intellectual property isn’t yours for the taking.”

Image Source: Deposit Photos
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Author: T.Schneider