CED Newsletters & Policy Alerts

Two Court Decisions on AI Copyright Issues

July 02, 2025

Action: Federal judges issued rulings in two separate cases on the use of copyrighted material in AI models and fair use doctrine. In a case involving Anthropic, Judge William Alsup, Senior District Judge in the Northern District of California, ruled that the company’s use of copyrighted books it had purchased to train its models constitutes fair use. However, Judge Alsup declined to grant Anthropic’s assertion that its use of pirated books it collected over the internet was also fair use and indicated that question would go to trial. In a separate case, Judge Vince Chhabria, also a District Judge in the Northern District of California, ruled that Meta’s use of books written by 13 plaintiffs also constitutes permitted under fair use, noting that the plaintiffs failed to show that Meta’s use of their books damaged their potential market or value.

Trusted Insights for What's Ahead^®

• The dual judicial decisions deal with one of the core debates in AI policy – the extent to which AI developers may use materials copyrighted in the US to train their models. These cases are significant victories for developers, with Judge Alsup’s ruling notably comparing an AI model’s use of information to a human reading a book then later drawing on it in forming new ideas. In both cases, the judges noted that each AI model’s use of the copyrighted material was highly transformative, a key element of satisfying the fair use doctrine.
• However, AI developers continue to face numerable legal challenges across a range of issues – including data privacy and copyrights for news, books, music, and art – which will ultimately likely need to be resolved by the Supreme Court and Federal legislation.
• The legal risk for AI developers is significant, as statute permits fines of up to $150,000 per intentional violation of copyright infringement. Anthropic’s library of pirated books, for example, contains more than 7 million titles. With respect to the issue of books collected over the internet, Mary Rasenberger, CEO of the Authors’ Guild, noted that “[t]he impact of this decision for book authors is actually quite good,” highlighting the high damages per book for intentional copyright infringement.