Judge William Alsup has thrown out a proposed record 1.5 billion dollar settlement between AI company Anthropic and a group of authors. The judge expressed significant concerns that the deal was premature and unfairly structured, stating it was nowhere close to complete.
The lawsuit, filed by a class of authors, accused Anthropic of using pirated copies of their copyrighted works to train its large language models. The settlement would have seen approximately 500,000 authors receive around 3,000 dollars per work. Lawyers for the plaintiffs had hailed it as a landmark agreement that far surpassed any previous copyright recovery.
However, Judge Alsup felt misled by the proposal. In his order, he criticized the legal teams for leaving critical questions unanswered. He specifically pointed to the absence of a finalized list of copyrighted works involved in the case, a complete list of the authors who would comprise the class, a plan for notifying those authors, and a claim form for them to receive their settlement funds.
The judge also revealed an uneasy feeling about the large amount of money on the table, a common issue in class-action lawsuits where, in his view, class members often get the shaft once a monetary settlement is set and lawyers move on. He was concerned the deal was being forced down the throat of authors without proper consideration for their rights.
Alsup has given the lawyers a set of directives to address his concerns. They must provide class members with very good notice about the settlement and design a claim form that clearly gives them the choice to opt in or out of the agreement. Furthermore, the settlement must be structured to ensure that Anthropic cannot be sued again for the same issue in the future, a provision known as global peace.
The judge set a deadline of September 15 for the legal teams to submit a final list of the works involved in the lawsuit. He also mandated that the court must examine and approve the works list, the class members list, and the claim form by October 10 before he will even consider granting the settlement preliminary approval. This rejection sends the parties back to the drawing board to create a more detailed and court-approved framework for the massive settlement.
