By Chris Caesar
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winter 2026
Courts in AI-focused copyright battles are starting to issue a first wave of opinions forcing litigants to draw their lines in the sand.
In September 2025, AI start-up Anthropic agreed to a staggering $1.5 billion settlement, following a lawsuit brought by authors who claimed the company copied their works without permission.
The problem, according to the court, wasn’t Anthropic’s use of scanned copyrighted books to train its large language models—but that the company also chose to download and then hold on to books from third-party pirating sites. The deal, which has received preliminary court approval, works out to about $3,000 per title.
That number may sound high, but it’s a bargain compared to what Anthropic might have faced at trial, Suffolk Law Professor Peter Karol said.
"Statutory damages can get to really high amounts—very fast,” said Karol, who specializes in intellectual property and its collision with these new technologies. “We’re talking up to $150,000 per work infringed, as compared to $3,000.”
Unlike actual damages, statutory damages don’t require proving financial harm—they’re designed to deter infringement when real losses are hard to quantify. Courts can award them per work infringed, and the amounts multiply quickly when willful infringement is involved.
Thus, Karol argues that the seemingly massive settlement was preferable for the AI giants to risking a potentially bankrupting loss in court. For other AI companies watching the case from the sidelines, Karol identified a key takeaway: How you collect training data—steering clear of pirating websites, for example—can matter just as much as what you build with it.
So, where does this leave lawyers advising AI companies? Karol sees these billion-dollar deals as the likely start of an industry pattern.
“The end result here is just companies doing the math,” he said. “Eventually, once people start agreeing on what the numbers look like, those settlements precipitate the next wave of settlements.”
With billion-dollar settlements and lawsuits, he says, the direction is clear: Whether through licensing or settlements, paying up front for top-quality training data is likely to become the cost of entry for AI companies.
Photograph: Michael J. Clarke
“Statutory damages can get to really high amounts—very fast. We’re talking up to $150,000 per work infringed, as compared to $3,000.”
Peter Karol
Suffolk Law Professor
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