Anthropic’s $1.5B Copyright Settlement Approved, Fair Use Ruling Stands

A federal judge on Monday approved Anthropic’s $1.5 billion settlement of a class action copyright lawsuit brought by authors and publishers, closing the largest copyright case in U.S. history but leaving the core legal question of AI training and fair use unresolved industrywide.

Judge Araceli Martínez-Olguín of the U.S. District Court for the Northern District of California signed off on the final settlement, which had received preliminary approval last year from now-retired Judge William Alsup. The payout delivers roughly $3,000 per work across an estimated 506,194 works, shared among authors and publishers who hold rights to them.

The settlement is the largest copyright recovery ever reached, according to the plaintiffs’ law firm. Approximately 91 percent of authors and publishers covered by the settlement have already filed claims, the court noted. “We are pleased that more than 91 percent of authors and publishers covered by the settlement have claimed their share of the payment, and we’re looking forward to bringing this matter to a close,” Anthropic’s deputy general counsel, Aparna Sridhar, said in a statement.

The Fair Use Ruling and the Piracy Issue

The case had split into two distinct legal questions. Judge Alsup previously ruled that training an AI model on copyrighted text qualifies as fair use—a decision widely seen as a victory for the AI industry. But he found that Anthropic had illegally downloaded millions of copyrighted books from pirate sites such as Library Genesis and Pirate Library Mirror. That piracy issue was set to go to trial before Anthropic agreed to the settlement to avoid potential jury damages.

The settlement compensates only the piracy portion of the case. The fair use ruling, while influential, is a single district court decision and will not become binding precedent because Anthropic settled before an appeals court could weigh in. Other judges remain free to reach their own conclusions on the facts of separate cases.

Judge Overrules Objections, Cuts Fees and Awards

Judge Martínez-Olguín overruled objections from a handful of authors who argued the $3,000-per-work payout was too low and that lawyers’ fees were excessive. She emphasized that about 95 percent of the class received notifications and that the high participation rate indicated most authors found the settlement “fair.”

Only 350 class members opted out of the settlement, while 54 sought to object or filed late opt-out requests. The judge denied most late opt-out requests, granting only two—one from a co-author who did not receive notice, and another from an author who suffered a stroke and lacked a Spanish translation of the notice.

The judge also reduced the lawyers’ fees requested. Plaintiffs’ attorneys had initially sought 20 percent ($300 million), then reduced to 12.5 percent ($187 million). Martínez-Olguín cut fees to less than 7 percent of the settlement fund, or about $101 million, and ordered a post-distribution accounting to ensure any surplus is returned.

Service awards for the three lead plaintiffs—Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson—were reduced from $50,000 each to $15,000. The judge called the higher amount “unreasonable” and noted no evidence of retaliation against the plaintiffs.

Broader Implications and Ongoing Lawsuits

The settlement does not resolve the legal landscape for AI training on copyrighted content. A string of copyright lawsuits against Google, Meta, Midjourney, and OpenAI remains active. Just last week, a group of publishers including Hachette, Cengage, and Elsevier, along with author Scott Turow, filed a class action against Google over its Gemini AI platform.

In a statement, the lead plaintiffs said the settlement “brings us one step closer to real accountability for Anthropic and puts all AI companies on notice they can’t shortcut the law or override creators’ rights.” Anthropic is still facing separate lawsuits from Chicken Soup for the Soul and other authors who argue the $3,000-per-work payment is insufficient.

If any funds remain after all valid claims are paid, the parties anticipate a redistribution to class members, the judge said.