Anthropic AI’s $1.5 Billion Copyright Settlement: A Wake-Up Call for India’s Legal System

1. On September 25, 2025, the U.S. The District Court for the Northern District of California granted a preliminary approval to a massive $1.5 billion settlement in a copyright infringement lawsuit filed against Anthropic Inc, an AI research company populary known for developing large language models (LLMs) and AI chatbot family commonly referred to as Claude. The case in question was filed by a group of authors led by Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, along with support from the Authors Guild, which is the world’s largest professional organization for writers and authors. The allegations against Anthropic was that the company in pursuit of training its large language models and AI Chatbots used millions of pirated books downloaded from illegal and unofficial shadow libraries like Bibliotik and Library Genesis without consent or compensation from the authors of the said materials. The preliminary approval of this massive settlement highlights the increasing legal attention on how AI companies like Anthropic, Perplexity, and OpenAI train and update their LLMs and Chatbots without having any kind of consent or approval. It also sets an important precedent, showing that even in a world dominated by AI, creators’ rights must be respected and companies can’t use copyrighted material without permission.

2. The settlement, preliminarily approved at $1.5 billion, is structured as a class-action fund to compensate authors whose works were allegedly used without permission. Though the settlement covers millions of works, only those verified and included in the class action will receive compensation. The court has fixed the same at approximately $3,000 per work, depending on the number of claims submitted and the total funds available. While the settlement does not constitute an admission of liability, the agreement requires Anthropic to implement stricter data sourcing policies and ensure that future AI training datasets comply with copyright laws. The court also noted the scale of the infringement, making this one of the largest settlements in the emerging field of AI. 

3. However, it is pertinent to note that Anthropic is not the only AI company facing legal challenges over the use of copyrighted material. Sam Altmen led OpenAI, for instance, is already in litigation against authors, publishers, and coders for allegedly including copyrighted texts and code in the training and development of its AI models, including ChatGPT, Sora, Whisper. Similary Zuck led Meta and Stability AI are also facing similar lawsuits from artists and stock image companies such as Getty Images’ and ANI’s landmark case which claim that their works were used without consent. This practice of using vast amounts of publicly available or scraped content for AI training is increasingly becoming a common practice among major AI and tech companies. These cases highlight a growing trend as AI technology advances, courts and creators are increasingly looking into how such training and development data is sourced. 

4. What the Anthropic AI’s settlement shows is how courts abroad can hold giant corporations accountable, the situation in India is entirely different. In here the mere cost and time of litigation and the unreasonable time taken for cases to reach a conclusion dampers litigants such as individual authors or small creators to seek justice. Large corporations who engage in such activities in India are fully aware of these imbalances and loopholes , and they often rely on the fact that if an action is filed against them, it will drag on for years, even decades, before reaching any meaningful stage. Another major drawback in the Indian legal system when dealing with such instances is that even when courts do award damages, they are frequently nominal and disconnected from the actual harm caused. For instance, in several intellectual property disputes, Indian courts have awarded damages as low as a few lakhs despite clear evidence of large-scale infringement. This practice discourages victims from approaching courts, as the time, cost, and effort of litigation far outweigh the relief they can realistically expect.

5. Another major hurdle which looms upon our judicial system is the absence of an effective class-action mechanism. Even though the Companies Act, 2013 introduced the concept of class actions, in practice, they are rarely invoked, especially in cases involving infringement, copyright, consumer rights, or mass harm. This means that even when a large group of creators, authors or stakeholders suffers the same infringement, they cannot easily come together to pursue justice collectively.The Indian requirement of assembling a minimum number can be a major hurdle, especially when compared to global standards where even a single

   

   member can initiate proceedings in the U.S., Canada, Germany, France, Italy, etc.

6. Furthermore, added to this is the prolonged duration and high cost of litigation. According to the World Bank's Doing Business 2020 report, resolving a commercial dispute in a local first-instance court in India takes an average of 1,445 days—nearly three times longer than in OECD high-income economies. The report also notes that litigation costs in India average about ⅓ rd of the claim value, roughly 10% higher than OECD countries. The Anthropic case reached a preliminary $1.5 billion settlement in just 13 months, which portrays how courts abroad can deliver timely justice to litigants even against big corporations. In contrast, India remains far behind, riddled by slow courts, high costs of litigation, and restrictive laws, and structural gaps that protect wrongdoers’ interests. Without reforms to such a scenario, large-scale settlements like Anthropic’s will remain largely impossible in India.