Anthropic ends AI copyright lawsuit with a 2 trillion won settlement, clearing a path for its IPO

[Financial News] Anthropic, which had been accused of using copyrighted works without permission to train its artificial intelligence models, has ended a class-action lawsuit with a settlement worth 2 trillion won, the largest damages payout in a U.S. copyright case.
On the 20th local time, Judge Araceli Martínez-Olguín of the U.S. District Court for the Northern District of California issued an order giving final approval to the settlement submitted by both sides in the copyright infringement class action filed by affected authors against Anthropic.
Under the agreement, Anthropic will deposit a $1.5 billion settlement fund, or about 220.935 billion won, for the authors. Class members who joined the lawsuit will receive about $3,000, or roughly 4.4 million won, per work. That is about four times the statutory minimum damages of $750, or about 1.1 million won, available in a typical copyright infringement case.
Some plaintiffs in the class action objected, saying the compensation was too small, but the court rejected their challenge. The court explained that if the case went to trial instead of ending in a settlement, the plaintiffs could not be assured of victory. It also noted that even if a large damages verdict were awarded, procedural issues could still arise.
The court also ordered Anthropic to destroy copyrighted works and copies downloaded from so-called pirate sites.
Earlier, authors including Andrea Bartz, who wrote the bestselling thriller "We Were Never Here," filed a class-action lawsuit in 2024, alleging that Anthropic had used their copyrighted works without permission while training its AI model Claude.
The court sided with Anthropic, ruling that using lawfully purchased books for AI training qualifies as fair use. However, it said Anthropic's downloading of books from pirate sites could amount to copyright infringement, and it allowed damages proceedings only for that part of the case.
Anthropic later reached a settlement with the plaintiffs, agreeing to pay about $3,000 per book for a total of $1.5 billion for 500,000 books. In a document filed with the court at the time, Anthropic also admitted that it chose to settle under pressure, saying the lawsuit could have led to a trial that might have ended its business.
Justin Nelson, the plaintiffs' attorney, said he was pleased with the court's decision to approve the historic settlement. He called it "the largest copyright damages case in history." Aparna Sridhar, Anthropic's deputy general counsel, also said she hoped the case would be resolved quickly and stressed that the ruling that "AI training using books qualifies as fair use under copyright law" remains in effect.
By settling the copyright lawsuit, Anthropic has removed one legal obstacle ahead of its planned initial public offering (IPO) targeted for the fourth quarter.
[email protected] Hong Chaewan Reporter