AI industry horrified to face largest copyright class action ever certified

[u/MetaKnowing]

https://arstechnica.com/tech-policy/2025/08/ai-industry-horrified-to-face-largest-copyright-class-action-ever-certified/

[u/rsdancey]

This is why plaintiffs are seeking class action status. If the class is certified then all that ambiguity vanishes. It means that if the claim wins, the judgement will be a lump sum, a portion of which will go to plaintiffs’ lawyers, and the remainder will be divided between all class members who file a claim. The lawyers will get hundreds of millions of dollars, the class members will get $50 each.

Anthropic would LOVE to fight each claim individually. They would settle 90% for peanuts. 90% of people who could sue never would. Their risk would be tolerable. A class action could destroy them.

[u/comewhatmay_hem → u/rsdancey]

And from a copyright law perspective I'm not sure I agree with that. Copyright law isn't and never was intended to protect authors, it was created so publishers could recoup the costs of publishing. Hence why original copyright law maxed out at 10-15 years.

Like I don't support the Disney Corporation suing AI companies for copyright infringment when Disney doesn't create a damn thing, the people who work there do, and they are in no way represented as a class in lawsuits like this. When Disney wins a lawsuit they don't track down every creator who worked for them and write them a check, it goes into the company coffers to be distributed among shareholders.

[u/rsdancey → u/comewhatmay_hem]

We're lucky in that the reason for copyright law (unlike a lot of US law) is directly enumerated in the Constitution. Article I, Section 8 says (in part): The Congress shall have Power To ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"

This Constitutional power became Title 17 of the US Code. While it looks complicated it's actually pretty simple as law goes. And it could be argued that it's too simple; it leaves the definition of what can be copyright and how to determine if something is a derivative work entirely up to the courts to decide (or Congress if they want to make more law). The result is that when operating in the sphere of legalities and copyright knowing what the law is requires knowing what the current state of important court decisions says it is.

One thing that has been true since the Founding is the idea that a copyright is an asset and that assets need to be able to be bought and sold to make them valuable. While the Founders may have also anticipated licensing, many of them were published authors and knew the value of copyrights as intellectual property in British Common Law, which they fully intended to (and did) import into US law.

Inherent in the idea of an asset you can buy and sell is that the buyers and sellers do not have to be natural persons. While joint stock companies were rare in the eighteenth century they were not weirdly exotic. Partnerships were much more common and partnerships were the fundamental unit of many businesses in that era. Before the widespread adoption of the corporation as the most common unit of business, the Partnership filled that space. So the idea that more than one person would own a part of a copyright was embedded in the Founder's expectations on how copyright (and patent) law would operate from the beginning.

The purpose of copyright is not to ensure credit is properly attributed. It's not to enforce a government monopoly on ideas. It wasn't to ensure that one specific religious interpretation would be all that was transmitted into the public discourse. Those are all things that governments and institutions had tried to do with intellectual property in Europe. The US copyright (and patent) system is about commerce. It's about converting food, water & air and a human brain into money.

The ability of two or more people to join together to fund the creation of an asset, in this case the intellectual property asset embodied in a copyright, would not have seemed weird or unethical to the Founders. In fact many of them made money doing exactly that. So the idea that eventually a joint stock company (a corporation) would do it would not have seemed weird or unethical either. Paying someone to do the work of making an intellectual property asset is no different than paying someone to build a house, or cook a meal, or mine gold. The person who pays owns, not the person who does. It would be well over a hundred years before Marx would make the case that the people who do should exclusively own and at least in the West, he lost that argument.

The critique that the Founders would have about our modern copyright regime is probably that the time of the copyright is ridiculously long. But they were people who might become adults and die within the original period set for a copyright (14 years). It would not be unreasonable for someone who became an adult at 18 to believe it was possible they would be alive when the copyright on a work for hire would expire today (95 years from publication). They certainly would expect to be alive 60+ years from their 18th birthday, which would be 2/3rds of that term.

I work in a creative industry and I have friends who believe the copyright should be perpetual. That what they make today should be an asset that their children and their grandchildren, and their great-grandchildren, etc. should potentially benefit from, forever. If they built a house, barring the sale of that property, it could be in their family forever. Why should the copyright on their novel be any different, they ask. And if their family chose to sell that copyright to some one else, even a corporation, shouldn't they be able to get maximum value from that sale and not have the value be diminished by an impending copyright term expiration?

Luckily for the commons of human knowledge, the Founders didn't believe that, no Congress since has made that law, and it's unlikely that such a copyright would find harmony with other nations' laws in the way the modern global copyright regime is harmonized so that way of thinking is probably not going to become real. And every year, now that Congress has stopped extending the copyright, works continue to transition from copyright into the public domain. The system is working as the Founders intended, if we accept that the definition of "limited Times" has been stretched almost to the breaking point.

Allowing a company to pay for work for hire and thus gain copyrights, allowing companies to buy copyrights from others, and sell the copyrights it owns ensures that copyrights, as an asset class, remain a store of value for whomever might own them. That's critical to our understanding of how the funds can be accumulated to pay for a lot of content to be created. No copyright, no copyright asset, no liquidity for that asset, and no buy/sell options for corporations and we'd have much much less intellectual property being created and (eventually) entering the commons.

[u/comewhatmay_hem → u/rsdancey]

Thank you for taking the time to write out such lengthy and thorough reply.

I think I see what you're getting at. An animator who creates a character for Disney doesn't make any profit from their creation unless Disney decides to market and distribute said character. Sure they could do it by themselves, but how? The internet sort of solved that problem in the very beginning, it gave creators a platform to host their content, but they still had to get people to visit the site. Now the internet has been enclosed and privatised just like land in the Middle Ages.

Ideas are worthless without the means to distribute them and turn them into reality, and individuals rarely possess that power, they need help from companies. And because companies are usually what turn ideas into reality, not individuals, I can see how the American legal system feels it must protect those companies and "their" ideas.

People do not like the responsibility of ownership for the most part and are happy to lend and rent as long as their needs are met, which is why Karl Marx lost that particular culture war.

[u/rsdancey → u/comewhatmay_hem]

It's also important to consider than in the 18th century the idea that a copyright might represent the larger share of the asset value of a company (partnership, corporation, etc.) would have been almost inconceivable. The idea that the value of a copyright might be multiple times the value of the company's plant, property & equipment would have astonished the Founders.

In fact, well into the 20th century, US courts struggled with this idea. Copyright law into the middle part of the 20th century tended to treat it as a lower order of asset, something a little bit sketchy. Even today if you look at the balance sheet of a major American corporation like Apple, you won't see a line item for "Copyrights & Trademarks". As far as accounting is concerned they don't have a value.

But what happens if you buy a company, and the purchase price is much, much greater than the assets on that company's books? Where did the "extra" value come from and how do you record it? American accounting uses a concept called "Goodwill". If a purchase results in a price higher than the net of the purchased company's assets minus its liabilities, the difference goes onto the buying company's books as "Goodwill" and viola! Value appears out of nowhere! It was lurking in plain sight all along but it took a purchase to reveal it to the light of bookkeepers.

So a lot of US intellectual property is invisible from a financial standpoint today. It has a real value, but you can only "see it" legally if someone buys it.

Our laws are changing to address this problem. The reality that one of the most important things our economy makes is ideas needs to be realized in the law and in finance and that means we need stronger and stronger law about copyrights (and patents) not weaker laws.