As reported here, a U.S. federal judge in San Francisco has ruled that it is “fair use” under U.S. Copyright laws to use books and other literature to train an AI module, but that storage of the literature in a database is not. The case involves an AI development company called Anthropic. The lawsuit was brought by a group of authors who asserted claims for copyright infringement for the use of their writings without permission (or payment). See Bartz v. Anthropic, PBC, Case No. C 24-05417 WHA (N. Dist. Cal. 2025).

Generally, U.S. Copyright laws provide legal protections for original works of authorship, including protection for the author’s right to exclusive use of the materials. If a person or company violates that right, they can be sued for copyright infringement, where civil penalties and fines can be extensive. In cases of willful infringement, civil damages can be awarded in amounts exceeding $100,000 per work that has been infringed. It is claimed that Anthropic used millions of books, newspapers, magazines, and other types of written works as part of the training procedures for its AI module.

However, there are some circumstances where a person or company can use copyrighted works without permission and without being deemed to have infringed the works. These circumstances go under the general legal term of “fair use.” In the Anthropic case, the judge ruled that using the book and other materials was “fair use” in the same manner as if an individual obtained a book for personal use and instruction. The idea is that a person might study a copyrighted work, not to copy it, but to learn to create other original works of authorship. In this sense, the intent is to create “new transformative” works. This has been a key legal argument made by Anthropic and other companies being sued for similar behavior. For the first time, a federal judge agreed with the reasoning and ruled in favor of “fair use.”

The decision is a tremendous “win” for companies that are creating and developing AI modules.

However, the “win” was only partial. The judge also ruled that it was NOT “fair use” for Anthropic to store the books and other written materials in a digital database. It is admitted by the parties that, to quote the judge:

“The firm also purchased copyrighted books (some overlapping with those acquired from the pirate sites), tore off the bindings, scanned every page, and stored them in digitized, searchable files. All the foregoing was done to amass a central library of “all the books in the world” to retain ‘forever.’”

The judge ordered Anthropic to face trial later in 2025 on the claims that its digital storage of over 7 million books was copyright infringement. As noted, each proven incident of copyright infringement comes with a significant award of money damages.

It should be noted that, a day after the Anthropic decision was released, a different federal judge in San Francisco — US District Judge Vince Chhabria — issued a decision that was at odds with the holding of the Anthropic decision. Judge Chhabria opined that the use of copyrighted materials might be infringement, but, in that case, the parties suing had not provided enough evidence for the case to move forward.

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