Legal Crossroads: AI and copyright under fire in the United States and Europe

Artificial intelligence is rapidly transforming how content is created and consumed. Two major cases, one in the United States and one in the European Union are challenging how copyright law applies to generative AI systems. 

In the United States, AI company Anthropic faces what could become the largest copyright class action in history, with millions of potential claimants and billions of dollars in damages at stake. Meanwhile, in Europe, the Court of Justice of the European Union (CJEU) is reviewing the case of Like Company v. Google Ireland, the first to directly address how EU copyright law applies to AI-generated content and training practices.

Together, these cases highlight the growing tension between technological innovation and intellectual property rights and signal a turning point for developers, legal teams, and policymakers navigating the future of AI.

The U.S. lawsuit: copyright class action

The AI industry is facing what could become the largest copyright lawsuit in history: a class action filed by three authors against the AI company Anthropic. The lawsuit concerns the use of copyrighted works to train AI models. While not the first of its kind, the scale and potential consequences are unprecedented.

Anthropic warns that if up to 7 million claimants join the suit and a settlement is reached, the financial impact could devastate the entire AI sector. The company is seeking permission to appeal the class action certification, arguing that the district court judge in America, William Alsup, failed to properly analyze the scope of the claimant group.

The lawsuit could lead to hundreds of billions of dollars in damages, with each copyrighted work potentially incurring a fine of $150,000. Anthropic suggests that settling might be the only viable option, which could set a precedent for other generative AI companies facing similar legal challenges.

Industry groups like the Consumer Technology Association and the Computer and Communications Industry Association support Anthropic, warning that the lawsuit threatens not just one company but the entire emerging AI industry and the United States’ global tech competitiveness.

The EU lawsuit: four legal questions for the CJEU 

The case of Like Company v. Google Ireland, currently under review by the CJEU, represents a critical moment in the intersection of copyright law and artificial intelligence. Referred on 3 April 2025 by the Budapest Környéki Törvényszék, this case - registered as C-250/25 - is the first to directly address how generative AI systems interact with copyrighted content under EU law. At the heart of the dispute is Google’s chatbot Gemini (formerly Bard), which allegedly reproduced and summarized Like Company’s news articles without permission.

The Hungarian court has asked the CJEU to clarify four critical legal questions: 

• whether AI-generated text constitutes “communication to the public,”
• whether reproducing excerpts during training is a form of “reproduction,”
• whether such reproduction qualifies for the text and data mining (TDM) exception under Directive 2019/790, and
• whether the chatbot’s output can be legally attributed to its provider. 

These questions challenge the boundaries of existing copyright directives, including the DSM Directive and the InfoSoc Directive, and could significantly impact how AI systems are trained and deployed across the EU.

As of September 2025, the CJEU has not yet issued a ruling, but the case remains under active review. Legal experts anticipate that the decision will have far-reaching consequences, potentially introducing licensing obligations for AI-generated content and limiting the use of copyrighted materials in training datasets. The outcome may also influence the implementation of the proposed AI Liability Directive, which introduces new standards for causality and disclosure in high-risk AI systems.

The case highlights the tension between innovation and rights protection, especially as jurisdictions like the UK and China adopt more flexible approaches to AI-assisted works compared to the EU’s stricter stance. For developers, legal professionals, and content creators, the pending decision underscores the need to audit training datasets, respect opt-out mechanisms, and align internal compliance strategies with evolving legal standards.

In conclusion, the CJEU’s ruling in Case C-250/25 will not only resolve a dispute between Like Company and Google Ireland, it will define the contours of copyright law in the AI era. As the digital landscape continues to evolve, this case serves as a critical benchmark for balancing technological advancement with the protection of intellectual property rights.