Overview

• U.S. District Judge William Alsup found that destructively scanning legally acquired books for AI model training is “spectacularly transformative” and qualifies as fair use under copyright law.
• The ruling applies the first-sale doctrine to permit AI firms to use text from purchased books without obtaining separate licenses or paying authors for training purposes.
• Alsup rejected the use of pirated content from shadow libraries as unfair and infringing, stating that unauthorized copies offer no legal fair-use defense.
• A December trial has been scheduled to determine the financial damages Anthropic and similar developers must pay for infringement related to unlicensed pirated texts.
• The verdict elevates “data diligence” into a critical compliance requirement for AI companies seeking to avoid future litigation and reputational harm.