Reddit v Anthropic Is One to Watch
Creating an AI licensing system based on access rather than use
A publisher suing an AI developer over the unauthorized use of its content barely qualifies as news these days. At least three dozen such cases are currently pending around the country. But the lawsuit Reddit filed against Anthropic last week bears watching because of what it doesn’t do. It does not charge Anthropic with copyright infringement.
Instead, Reddit hangs its complaint on allegations of breaching its user agreement, unjust enrichment, and unfair competition.
“Anthropic continues to commercialize Claude and related AI models today, which use the data obtained from Reddit’s platform. Reddit has never given Anthropic permission to use any Reddit content for commercial purposes,” the complaint reads. “By scraping Reddit content and using this data for commercial purposes and purposes unauthorized by Reddit, Anthropic has violated the User Agreement’s prohibition on commercializing Reddit content.”
One reason for eschewing a charge of copyright infringement is that Reddit does not own the copyright on user posts outright. Under its terms of use, users retain certain rights but grant Reddit a license to make certain uses of them, including the right to sublicense the content. But the move also could help Reddit avoid a protracted battle over fair use, the preferred defense for AI companies to charges of copyright infringement, and put itself on firmer legal ground.
Reddit filed the lawsuit in California Superior Court in San Francisco rather than in federal court, where a federal copyright case typically would be filed.
Legal tactics aside, the lawsuit could prove an important test case for whether claims brought over violating the terms of a robust and active licensing program, under bog-standard contract law, can be a viable alternative for publishers to venturing into the murky depths of copyright law and fair use.
Other plaintiffs in AI copyright cases have had licensing programs in place before generative AI merged. The New York Times licensed its content to other media outlets, academic institutions, and other enterprises before suing OpenAI and Microsoft. Getty Images’ whole business was based on syndicating the work of 50,000 photographers to media outlets around the word long before it sued StabilityAI. But Reddit’s licensing program was designed from the ground up specifically to provide AI training data.
With its 20-year archive of informal, vernacular conversations around nearly any topic under the sun, Reddit’s discussion boards have been a prime target of AI scraper bots since before ChatGPT appeared in November 2022. With an eventual IPO in mind, however, Reddit began taking steps to turn access to its data trove into a meaningful revenue stream.
In its S-1 filing in March 2024, the company disclosed it had entered into data licensing agreements with various parties, one of which was revealed to be Google, with an aggregate contract value of $203 million.
“Reddit data is a foundational piece to the construction of current AI technology and many LLMs,” the filing stated. “We believe that Reddit’s massive corpus of conversational data and knowledge will continue to play a role in training and improving LLMs. As our content refreshes and grows daily, we expect models will want to reflect these new ideas and update their training using Reddit data.”
Shortly after it released its first quarterly earnings results after going public, Reddit published a blog post spelling out in detail a new policy for accessing its data API:
Unfortunately, we see more and more commercial entities using unauthorized access or misusing authorized access to collect public data in bulk, including Reddit public content. Worse, these entities perceive they have no limitation on their usage of that data, and they do so with no regard for user rights or privacy, ignoring reasonable legal, safety, and user removal requests. While we will continue our efforts to block known bad actors, we need to do more to restrict access to Reddit public content at scale to trusted actors who have agreed to abide by our policies.
For commercial businesses wanting to use Reddit data to “power, augment, or enhance” a product or service, the policy said, “we require a contract.”
Since then, according to its complaint against Anthropic, Reddit has signed licensing agreements with several AI developers, including OpenAI, Google, Sprinklr, and Cision
As spelled out in the complaint:
[A]ny user, individual, robot, or entity that accesses Reddit agrees to be bound by the User Agreement which governs the terms of access to and use of the platform. Each version of the User Agreement in force over the period states: “This Reddit User Agreement [] applies to your access to and use of the websites, mobile apps, widgets, APIs, emails, and other online products and services [] provided by Reddit, Inc.” The User Agreement goes on: “By accessing or using our Services, you agree to be bound by these Terms. If you do not agree to these Terms, you may not access or use our Services[.]”
Nor may a user, “without our written agreement: license, sell, transfer, assign, distribute, host, or otherwise commercially exploit the Services or Content . . . .”
Reddit alleges in its lawsuit that after becoming aware that Anthropic was scraping its archive to train the Claude LLM, it informed the developer that it did not have permission to scrape or use the data and approached Anthropic to engage in licensing negotiations. But Anthropic refused to engage.
Instead, Reddit claims, Anthropic continued to scrape its discussion boards in violation of the user agreement. “Anthropic accepted the terms of the User Agreement every time it or its agents—including ClaudeBot, [CEO] Dario Amodei, or the other authors who found Reddit data to be of the highest quality and well-suited for fine-tuning AI models—accessed or logged on to Reddit’s platform,” the complaint alleges.
To be sure, many publishers, including the Times and Getty Images, have content licensing programs to one extent or another. The unlicensed scraping of their archives by AI companies could potentially harm that market by denying publishers business they might otherwise collect, weighing against a finding of fair use. Other publishers have claimed they would make licenses available if AI companies would agree to engage in negotiations. When push came to shove, however, most defaulted to claiming copyright infringement when they found no takers.
Reddit has been more deliberate and methodical than many of its peers in designing and implementing its licensing program.
First, the program was developed specifically for licensing its content for use in AI, not hacked from a content syndication agreement. Second, Reddit blocks access to its archive (as best it can using robots.txt) except via its data API. That allows Reddit to control access to the data by granting conditioned access to the API via the user agreement — essentially a service contract in the case of commercial users — rather than by purporting to license the underlying intellectual property rights.
Equally important, Reddit creates added value through the license by providing licensees access to curated selections of structured data from its archive, saving them untold amounts of time, effort, and expense they would otherwise need to sort through and organize the firehose of content to prepare it for use.
Whether the user agreement is legally enforceable in the manner and to the degree Reddit claims will no doubt be debated in court if the case against Anthropic ever goes to trial. But if Reddit were to prevail, or even simply force Anthropic to the table to accept a deal, it will go a long way to establishing that it is possible to construct a viable licensing model for AI training data on the basis of ordinary business arrangements and contracts without needing to wield the heavy — sometimes double-edged — sword of copyright.