From Copyright to Trade Secrets: Anthropic’s Impact on AI & IP

In this episode of Reasonable Measures, Tim Londergan and Chris Buntel unpack one of the biggest developments in intellectual property this year: the 1.5 billion dollar Anthropic copyright settlement. The discussion explores what the case means for creators, AI companies, and the broader balance between innovation and protection in the age of large language models.Tim and Chris walk through the details of the lawsuit brought by author Andrea Bartz and others, who alleged that Anthropic’s AI systems scraped copyrighted books without permission. They discuss how the resulting settlement reframes the boundaries of fair use and how it signals that AI generated progress now comes with a royalty price tag.The conversation expands beyond copyright to consider how AI challenges traditional IP frameworks, especially around authorship, ownership, and creation. Chris and Tim also draw parallels to trade secret law, noting that while AI cannot legally invent or author, it can still create valuable trade secrets, making this form of protection increasingly central to the AI industry’s future.TakeawaysThe Anthropic settlement sets a major precedent for AI and IP, affirming that large language models must pay for the data they use.Fair use arguments have limits. When entire works are reproduced or leveraged commercially, creators deserve compensation.The settlement highlights that copyright is only one part of the AI and IP equation. Trade secrets now represent the core value of many AI companies.AI cannot be a legal inventor or author, but it can generate protectable trade secrets, reshaping how innovation is defined and safeguarded.The outcome reflects a cost of doing business for AI developers, establishing a model for how future disputes may be settled.As Tim and Chris note, trade secrets are no longer plan B. They are becoming the default protection strategy for cutting edge technology.