Federal Judge Rules Anthropic’s Book Use Fair but Piracy Still Faces Penalty

In a landmark decision for the artificial intelligence sector, U.S. District Judge William Alsup ruled that Anthropic’s use of copyrighted books for training its Claude AI model constituted fair use under copyright law. Anthropic, supported by Amazon and Alphabet, successfully argued their use of the texts was transformative and essential to AI training, reinforcing the AI industry’s stance that such practices foster innovation.

However, Anthropic’s widespread downloading and storing of more than 7 million pirated books in a central digital library was deemed unlawful. The court rejected the company’s defense regarding these unauthorized copies, stating such piracy went beyond fair use and infringed upon authors’ copyrights.

A trial scheduled for December will determine the extent of financial penalties Anthropic faces for these unauthorized library copies. Potential damages could reach up to $150,000 per infringed work, signaling significant financial risk. The decision highlights a critical distinction between permissible transformative use and impermissible piracy, with substantial implications for ongoing copyright litigation involving AI and digital media.

This ruling emerges from a larger context where numerous copyright owners—authors, publishers, and news organizations—have initiated legal actions against prominent AI companies, such as OpenAI, Microsoft, and Meta Platforms, over similar copyright issues. The outcome will likely influence industry practices around content use, acquisition, and digital intellectual property management.