Report from the AP
In Brief – Federal District Judge William Alsup, who is overseeing a major class action lawsuit accusing AI company Anthropic of violating federal copyright law, expressed deep disappointment with the lack of specificity in the $1.5 billion settlement reached by the company and attorneys for the authors who brought the lawsuit. The proposed settlement, which must be approved by Alsup, would pay authors and publishers about $3,000 for each of the books covered by the agreement. The judge released a short order before the first in-person settlement hearing expressing disappointment that several “important questions” were left unanswered, including the works covered, class list, and processes for claims, notifications, and dispute resolution, especially for works with multiple claimants. In the hearing, Alsup spent nearly an hour raising concerns and warned he may decide to let the case go to trial, although he closed saying, “We’ll see if I can hold my nose and approve it.” He set a September 22 deadline for submitting a claims form to him to review before the next hearing on September 25.
Context – In the US, a series of copyright lawsuits have center stage on the key AI intellectual property issue. In the EU, the AI Act, regulators and AI expert groups are playing central roles, with the copyright section of the General Purpose AI Code of Practice proving especially contentious. In June, Judge Alsup delivered a mixed ruling on summary judgement in the Anthropic case, delivering a robust defense of the application of the “fair use” doctrine for the training of Generative AI chatbots with legally acquired copyrighted books, regardless of the consent of the copyright holders, but harshly criticizing gathering books from online databases notorious for piracy. In a separate class action, Judge Vincent Chhabria delivered an opposing ruling the same week, creating the novel concept of “indirect substitution” through which AI systems can harm copyright holders by creating massive volumes of cheap content that, while not copies, are “similar enough to compete with the originals and thereby indirectly substitute for them,” nullifying the fair use defense.