AI Industry Horrified To Face Largest Copyright Class Action Ever Certified

An anonymous reader quotes a report from Ars Technica: AI industry groups are urging an appeals court to block what they say is the largest copyright class action ever certified. They've warned that a single lawsuit raised by three authors over Anthropic's AI training now threatens to 'financially ruin' the entire AI industry if up to 7 million claimants end up joining the litigation and forcing a settlement. Last week, Anthropic petitioned (PDF) to appeal the class certification, urging the court to weigh questions that the district court judge, William Alsup, seemingly did not. Alsup allegedly failed to conduct a 'rigorous analysis' of the potential class and instead based his judgment on his '50 years' of experience, Anthropic said.

If the appeals court denies the petition, Anthropic argued, the emerging company may be doomed. As Anthropic argued, it now 'faces hundreds of billions of dollars in potential damages liability at trial in four months' based on a class certification rushed at 'warp speed' that involves 'up to seven million potential claimants, whose works span a century of publishing history,' each possibly triggering a $150,000 fine. Confronted with such extreme potential damages, Anthropic may lose its rights to raise valid defenses of its AI training, deciding it would be more prudent to settle, the company argued. And that could set an alarming precedent, considering all the other lawsuits generative AI (GenAI) companies face over training on copyrighted materials, Anthropic argued. 'One district court's errors should not be allowed to decide the fate of a transformational GenAI company like Anthropic or so heavily influence the future of the GenAI industry generally,' Anthropic wrote. 'This Court can and should intervene now.'

In a court filing Thursday, the Consumer Technology Association and the Computer and Communications Industry Association backed Anthropic, warning the appeals court that 'the district court's erroneous class certification' would threaten 'immense harm not only to a single AI company, but to the entire fledgling AI industry and to America's global technological competitiveness.' According to the groups, allowing copyright class actions in AI training cases will result in a future where copyright questions remain unresolved and the risk of 'emboldened' claimants forcing enormous settlements will chill investments in AI. 'Such potential liability in this case exerts incredibly coercive settlement pressure for Anthropic,' industry groups argued, concluding that 'as generative AI begins to shape the trajectory of the global economy, the technology industry cannot withstand such devastating litigation. The United States currently may be the global leader in AI development, but that could change if litigation stymies investment by imposing excessive damages on AI companies.'

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