Overview

• Alsup found that copying and digitizing legally purchased books to train Anthropic’s Claude model was “exceedingly transformative” and qualifies as fair use under Section 107 of the Copyright Act.
• The court held that Anthropic’s retention of over seven million pirated book copies in a permanent digital library infringes copyright and lies outside fair use protections.
• A jury trial is set for December 2025 to assess damages for the pirated-library infringement, with potential penalties of up to $150,000 per willfully infringed work.
• Legal experts say this is the first comprehensive fair use ruling in a generative AI case and that it will influence dozens of pending lawsuits against companies like OpenAI and Meta.
• The decision highlights the importance for AI developers to source training materials lawfully to avoid future infringement claims.