What's Happening?
A federal judge has ruled that three law firms seeking $75 million in attorneys' fees from Anthropic PBC's $1.5 billion copyright class action settlement will not receive any portion of the settlement.
Judge Araceli Martinez-Olguin stated that any attorney outside of Susman Godfrey and Lieff Cabraser is effectively 'working for free.' The decision was made during a case-management conference in San Francisco, where the judge also announced plans to appoint a special master to investigate concerns that the firms requesting fees may have made side deals for better recovery than other class members. The settlement, reached in August 2025, addresses a lawsuit over Anthropic's unauthorized downloading of millions of books, marking one of the largest settlements related to artificial intelligence and intellectual property. The settlement received preliminary approval in September, with final approval pending in the US District Court for the Northern District of California.
Why It's Important?
This ruling underscores the complexities and potential conflicts in large class action settlements, particularly in the rapidly evolving field of artificial intelligence and intellectual property. The decision to deny fees to the three law firms highlights the court's scrutiny over fee arrangements and the importance of transparency in class action settlements. The case also reflects broader concerns about the ethical implications of AI companies using copyrighted materials without permission, which could have significant financial and legal repercussions for the industry. The outcome of this case may influence future litigation strategies and settlement negotiations in similar cases, potentially affecting how AI companies approach intellectual property rights.
What's Next?
The appointment of a special master to investigate the fee arrangements suggests that further scrutiny and potential adjustments to the settlement could occur. The court's decision may prompt other law firms involved in similar cases to reassess their fee structures and ensure compliance with ethical standards. Additionally, the final approval of the settlement is still pending, and any findings by the special master could impact the timeline and terms of the settlement. Stakeholders, including authors, publishers, and AI companies, will be closely monitoring the developments, as the case could set precedents for future intellectual property disputes involving AI technologies.
