Anthropic’s $1.5B AI copyright settlement stalled over fee disputes and procedural chaos
Critics argue the settlement structure disproportionately benefits counsel, while technical filing errors and opaque data handling practices further complicate the historic agreement.
Anthropic’s proposed $1.5 billion copyright settlement, intended to resolve claims regarding the use of authors’ works to train artificial intelligence models, has encountered significant judicial hurdles. US District Judge Araceli Martinez-Olguin has delayed final approval following substantial objections from class members and authors, who contend that the legal fees sought by plaintiffs’ counsel are excessive relative to the compensation offered to creators. The judge has ordered the authors’ legal team to address concerns regarding the fairness and transparency of the compensation structure, while Anthropic must file a brief explaining why late opt-outs should not be honoured.
At the heart of the dispute is the disparity between the estimated $3,000 payout per author and the more than $320 million in legal fees requested by counsel. Objector Pierce Story, an author whose works are covered by the settlement, argued that the fee structure equates to roughly $10,000 to $12,000 per hour. Story cited a previous 8th Circuit decision in a T-Mobile case, which deemed fees above $7,000 to $9,500 unreasonable, suggesting that the current request is unjustifiable. He further noted that many entitled authors have yet to register, meaning the fee calculation is based on a settlement fund rather than the actual number of claimants.
Story proposed that reducing counsel’s payout to $70 million would yield a nearly 25 percent increase in individual plaintiff awards, while still allowing lawyers to receive rates equivalent to their top hourly charges. He accused the legal team of rushing the historic agreement to maximise their own compensation rather than pursuing more creative options to secure better terms for authors. Ruben Lee, another class member, echoed these sentiments, describing the offered amount as paltry and failing to reflect the full value of the unauthorised use of his work.
Procedural irregularities have further complicated the proceedings. Former US District Judge William Alsup, who initially approved the settlement before retiring, had recommended an independent investigation into the legal fees. However, according to objector Lea Bishop, a professor of copyright law, this recommendation was not squarely disclosed to Judge Martinez-Olguin in a status report submitted by the authors’ lawyers. Additionally, class members were not notified of the proposed investigation, raising questions about the transparency of the process.
Objectors have also reported significant difficulties in navigating the court’s electronic filing systems. Ruben Lee stated he found it impossible to file his objection via the Court’s ECF and PACER systems, while the authors’ legal team attempted to exclude certain objections from the record. Victoria Pinder highlighted what she described as messy communication between the legal team and clients, noting that her name was conflated with Bishop’s in court filings and that counsel had previously docketed her claims before attempting to invalidate them.
Further demands have emerged regarding the handling of the intellectual property in question. Class member James R. Sills insisted that Anthropic must destroy all copies of the works, both digital and physical, before the settlement can proceed. Sills cited ambiguity over how specific works were acquired and expressed concern that Anthropic currently retains scanned physical copies that could be used commercially. He argued that without a clear framework for prospective relief and transparency, authors cannot know if their works will be destroyed or utilised.
The deadline for authors to respond to objections is set for May 21. In the interim, a group of 25 class members has filed a new lawsuit shortly before the settlement approval deadline, indicating that Anthropic faces continued legal challenges. The judge’s delay signals that the settlement, regarded as the largest of its kind in US history, may require substantial revision to address concerns over attorney compensation, data security, and procedural integrity.
