Anthropic’s settlement with

Beatrice Nolan is a

Anthropic has settled a copyright lawsuit that risked exposing the company to billions of dollars’ worth of damages.

The case, which concerns Anthropic’s use of millions of pirated books to train its large language model, Claude, was due to go to trial on December 1. However, in a Tuesday court filing, Anthropic and the

The amount of the settlement was not immediately disclosed. It’s also still unclear how the settlement will be distributed between various copyright holders, which could include large publishing houses as well as individual

The case was the first certified class action against an AI company over the use of copyrighted materials, and the quick settlement, which came just one month after the judge ruled the case could proceed to trial as a class action, is a win for the

“The

While the settlement doesn’t set a legal precedent, it could serve to legitimize the

Crucially, the case didn’t rest on the use of copyrighted material for AI training generally—and, in fact, the trial judge ruled that training AI models on legally acquired works would likely qualify as “fair use”—but on how AI companies acquired the works they used for training.

The plaintiffs, who include

“Even though they will be paying out a considerable amount of money, from Anthropic’s point of view, they’ll be seeing it as simply dealing with a legal problem that they weren’t careful enough about the way they used copyright works,” McDonagh said.He noted that Anthropic had, in addition to allegedly using libraries of pirated books, also purchased some copies of books that it later digitized and fed to its AI models. Alsup had ruled that the use of these books for AI training was “fair use” that didn’t require additional licensing from the copyright holders in order to use. “If they bought the 7 million books, then they could have actually used them to train their programs, and that would have been a fair use. The judge is objecting to the fact that they didn’t pay for the books in the first place,” McDonagh said.

But Anthropic wasn’t the only company to acquire large numbers of books

If the settlement is approved and the risk to Anthropic of further legal action is sufficiently mitigated, it could create a roadmap for how other companies deal with similar cases. AI companies have not previously acknowledged they have any liability when it comes to the use of copyrighted materials, so the settlement could set a precedent for how much copyright owners are compensated for works used for AI training.

“Some companies are already engaging in licensing content from publishers. So this may push us forward towards a situation in which the AI companies reach settlements that effectively retrospectively pay license fees for what they’ve already used,” McDonagh said. “Perhaps the beginning of a licensing future for the AI industry where

Representatives for Anthropic did not immediately respond to a request for comment from Fortune.