IP Law Daily, COPYRIGHT—N.D. Cal.: Preliminary approval of record $1.5 billion copyright class settlement between authors and Anthropic AI explained by court, (Oct 21, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The court found the proposed agreement to be fair, reasonable, and adequate, paving the way for the largest copyright class settlement in U.S. history.

The federal district court in California issued a memorandum opinion supporting its September 25, 2025, docket order granting preliminary approval to a comprehensive class action settlement resolving copyright infringement claims brought by a group of authors against Anthropic PBC, an artificial intelligence company. The court also approved the proposed plan of distribution and the class notice plan, finding that the agreement “likely satisfies Rule 23(e)(2)” of the Federal Rules of Civil Procedure and treats all class members equitably (Bartz v. Anthropic PBC, No. 3:24-cv-05417-WHA (N.D. Cal. Oct. 17, 2025)).

Background. The plaintiffs, authors Andrea Bartz, Kirk Wallace Johnson, Charles Graeber, and their entities Andrea Bartz, Inc. and MJ + KJ, Inc., filed the class action lawsuit in August 2024. The plaintiffs—each a well-known author or journalist—claimed that Anthropic had unlawfully copied and used their works to train artificial intelligence models. The defendant, Anthropic PBC, is a San Francisco–based AI developer known for creating LLMs such as Claude. The authors contended that Anthropic engaged in wholesale downloading and storage of copyrighted books from illicit sources to construct training datasets.

The works at issue comprised nearly 482,460 titles identified in a detailed “Works List,” which included books registered with the U.S. Copyright Office within five years of first publication or within three months of initial release. These works ranged from literary fiction to nonfiction and academic titles. The authors alleged that Anthropic downloaded unauthorized digital copies of these books, aggregated them into a central dataset, and used them as training inputs for its LLMs. While Anthropic maintained that its limited digitization of legitimately purchased print books for internal use constituted fair use, the authors argued that large-scale downloading from pirate sources could not be justified as transformative or noncommercial use.

The lawsuit alleged direct and vicarious copyright infringement. Discovery was extensive, encompassing terabytes of data, hundreds of thousands of pages of documents, and dozens of depositions. The case proceeded alongside Anthropic's summary judgment motion, which resulted in a mixed ruling. The district court held that Anthropic's conversion of purchased print copies for its own searchable library was fair use. However, it concluded that the company's downloading millions of pirated works, including those of the named plaintiffs, likely did not qualify as fair use based on the existing record.

The parties reached a term sheet agreement on August 25, 2025, followed by a proposed settlement signed on September 5, 2025. After two hearings held on September 8 and 25, 2025, the court granted preliminary approval on October 17, 2025. The court noted that the trial posed substantial risks for both sides. Plaintiffs faced the burden of proving ownership and willful copying before a jury, while Anthropic risked statutory damages of up to $150,000 per infringed work under 17 U.S.C. § 504(c) if found liable. The settlement provided certainty and avoided lengthy litigation and appeals.

Class certification and definition. The court reaffirmed that classwide adjudication remained proper and consistent with prior rulings. It clarified that only works listed on the Works List were covered, eliminating ambiguity over class inclusion. The court found that the plaintiffs’ list would serve both as a contact mechanism for notice and as common evidence of infringement, satisfying the predominance and superiority requirements of Rule 23(b)(3).

Although the class representatives were authors rather than publishers, the court held that they adequately represented all rightsholders, given their shared interest in enforcing reproduction rights and deterring unauthorized copying by AI developers.

Fairness and adequacy. The court applied the factors established in Churchill Village, L.L.C. v. General Electric, 361 F.3d 566 (9th Cir. 2004), and Briseño v. Henderson, 998 F.3d 1014 (9th Cir. 2021), concluding that the proposed agreement was “fair, reasonable, and adequate.” Discovery had been “extensive,” ensuring both parties were fully informed of the facts.

The court noted that plaintiffs had a “strong but uncertain case.” While Anthropic’s downloading of pirated materials likely violated copyright law, the fair use defense and the question of willfulness created unpredictability. The settlement provided immediate relief and avoided complex trial proceedings.

Each qualifying work would receive $3,000, a sum four times greater than the ordinary statutory minimum of $750 per work, and 15 times the minimum for innocent infringement ($200 per work). The opinion described this amount as “an order of magnitude greater than prior large-scale settlements,” comparing it to the rejected Authors Guild v. Google, Inc., 770 F. Supp. 2d 666 (S.D.N.Y. 2011) settlement, which was found overbroad for releasing future claims.

Unlike the Google Books settlement, the Anthropic agreement does not release future or output-related claims, limiting the release to past AI inputs—specifically, unauthorized copying prior to August 25, 2025.

Absence of collusion. The court found no indication of collusion between the parties, referencing In re Bluetooth Headset Products Liability Litigation, 654 F.3d 935 (9th Cir. 2011). The settlement was negotiated at arm’s length, and the attorney fee award was capped at 25% of the settlement fund, payable only after payments to class members. The court also prohibited any “quid pro quo” arrangements among authors for inclusion in the settlement.

This structure, the opinion stated, “ensures counsel’s interests remain fully aligned with those of the class.”

Equitable treatment. The settlement was found to treat all class members equitably. Each work on the Works List received the same award, and any variation in distribution would result from pre-existing publishing or ownership arrangements. The court emphasized that the per-work award appropriately reflected that Anthropic had “pirated works alike.” The claims process allows co-owners to determine allocation percentages, with even splits provided as a default for standard publishing arrangements.

Adequacy of the notice plan. The court approved a comprehensive notice plan to reach direct and indirect class members. Direct notice would be sent by mail and email using information from Copyright Office records, publishers’ databases, and commercial registries. Over 99% of affected works had at least one identified owner.

Indirect notice would include print and digital advertisements, targeted social media campaigns, and a settlement website where authors and publishers could search for affected titles by ISBN or author name. The campaign was projected to reach 95% of potential class members.

The court held that the notice plan satisfied due process standards established in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950), concluding that it “was more than a mere gesture and reasonably calculated to inform all affected rightsholders.”

The opinion further confirmed compliance with 17 U.S.C. § 501(b) and § 508(a). While the Copyright Act allows the court to require notice of infringement actions to interested parties, the court found that including a full copy of the complaint was unnecessary because the long-form notice adequately summarized the claims and directed recipients to all case documents.

Administrative appointments. The court appointed JND Legal Administration as settlement administrator, authorized to establish a qualified settlement fund under Treasury Regulation § 1.468B-1. Attorney Naomi Jane Gray was conditionally appointed special master to oversee the claims process, pending confirmation of her qualifications and absence of conflicts.

The Case is No. 3:24-cv-05417-WHA.

Judge: Alsup, W.

Attorneys: Justin A. Nelson (Susman Godfrey L.L.P.) for Andrea Bartz. Douglas Andrew Winthrop (Arnold & Porter Kaye Scholer LLP) for Anthropic PBC.

Companies: Andrea Bartz, Inc.; MJ + KJ, Inc.; Anthropic PBC

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