Judge Alsup’s summary judgement order in Bartz v Anthropic PBC1 released June 23, 2025 is making waves in the copyright and AI world. The order, issued out of the United States District Court for the Northern District of California, blessed as a “fair use” the AI company Anthropic’s practice of purchasing legal copies of physical books, then digitizing and using them to build a central research library and train its large language model, CLAUDE. The finding meant this training practice of Anthropic did not infringe the copyright of those books’ authors (by contrast, Anthropic’s practice of using non-legally acquired digital copies was not so excused). The decision is remarkable for being the first in North America to squarely consider the intersection of fair use as it relates to the wholesale copying of books in the context of AI training methods, specifically for generative AI tools.
Key to the “fair use” finding by Judge Alsup in Anthropic was that Anthropic’s use was “exceedingly transformative”; the purpose and character of the copying was to train a generative AI tool that produced its own output. This “transformative” purpose justified the extensive wholesale copying of thousands of authors’ works.
“Fair use” vs. “fair dealing”: distinct considerations for Canada
While Anthropic provides some preliminary indication of where courts may be headed in the United States, for those in Canada, much uncertainty remains. The U.S. Court’s reasoning does not appear to be easily replicable under Canada’s Copyright Act or jurisprudence — there are differences between the doctrines of “fair use” in the U.S. and “fair dealing” in Canada, and such differences have the potential to produce divergent outcomes.
““Fair use” is a U.S.-specific doctrine developed under U.S. common law and codified into the U.S. Copyright Act as of January 1, 1978. It is generally considered an “exception” to owners’ exclusive copyrights. Under the U.S. Copyright Act, decision makers are mandated to consider whether the use in question is “fair” using four factors set out in the statute.”
By contrast, Canadian “fair dealing” is entirely a creature of statute, and has a closed list of eligible purposes. Unless the dealing is for one of the enumerated purposes set out in section 29 of the Copyright Act, RSC 1985 c C-42, it will not qualify as “fair”. Those purposes are research, private study, education, parody, satire, criticism, review and news reporting. Only once a dealing is found to fall within that list can a judge then consider whether, on balance, the dealing is fair.
The Supreme Court of Canada’s guidance over the past twenty years has been to give the enumerated categories a “large and liberal interpretation” so that the “analytical heavy-hitting” is done on the “fairness” assessment.2 However, a “large and liberal” approach to interpreting the categories does not mean all dealings will qualify. In fact, until amendments to the Copyright Act came into force in 2012 that added “parody” and “satire” as fair dealing categories, such pleaded uses were found to not qualify for consideration as a fair dealing.3
It is unclear whether the existing fair dealing categories, even if largely and liberally interpreted, could encompass the training of a general-purpose large language models intended for broad public use.
Moreover, even if there is an applicable category, it is not a foregone conclusion that a Canadian court would (or could) arrive at a finding that the dealing was “fair”. Importantly, Canadian courts have not recognized “transformative use” as a characteristic of fair dealing. At least one Court has specifically opined that, based on the differences in the nature and history of fair use versus fair dealing, “what may be transformative, and as a result fair use in the U.S., may still be copyright infringement in Canada.”4
A further complicating factor is that unlike the U.S. doctrine of “fair use”, which is viewed as an “exception” to copyright infringement, Canadian “fair dealing” is positioned in the jurisprudence as a “users’ right” under the Copyright Act, to be balanced with authors’ rights.5
The language of “rights” draws into sharp focus questions around who (or what) is the intended beneficiary of the provisions in the Copyright Act – are they, or should they, be limited to legal persons?
In Anthropic, a central consideration for Judge Alsup appeared to be that the training of Anthropic’s AI tool with copyright-protected works was no different in type or kind than human engagement with those same works. He observed:
“Anthropic’s LLMs have not reproduced to the public a given work’s creative elements … Yes, Claude has outputted grammar, composition, and style that the underlying LLM distilled from thousands of works. But if someone were to read all the modern-day classics because of their exceptional expression, memorize them, and then emulate a blend of their best writing, would that violate the Copyright Act? Of course not.”6
Such language suggests that the Judge’s focus was on the AI tool’s own ultimate use of the works, and that because Anthropic fed it the works enabling that use, Anthropic’s conduct was “fair”.
Canadian jurisprudence around fair dealing, and particularly the enumerated “research” category, has also approached assessment of the purpose of the dealing from the perspective of the ultimate user — for example, students for whom teachers have copied articles, or consumers for whom communications companies have made snippets of ringtones available.
However, in each case, the entity conducting the research enabled by the copier has been human. The “user’s right” to copy has been in the pursuit of human knowledge — not machine knowledge.
Judge Alsup’s reasoning that training AI is fair because similar training of humans is fair may well ultimately be found to fit within the bounds of U.S. copyright law’s constitutional purpose “to [p]romote the [p]rogress of [s]cience and useful [a]rts”.
In Canada, however, copyright has no such constitutional purpose. Instead, as observed by Justice Abella in her final decision issued as a Supreme Court Justice, it is the “increasing [of] public access to and dissemination of artistic and intellectual works, which enrich society and often provide users with the tools and inspiration to generate works of their own [that] is a primary goal of copyright”.7
A recognition that machines, too, are deserving of inspiration and should benefit from the “user’s right” of fair dealing would represent a fundamental shift in Canadian copyright law. It carries with it potentially significant implications for law writ large.
References
- Bartz v Anthropic PBC, June 23, 2025
- See CCH Canadian Ltd v Law Society of Upper Canada, 2004 SCC 13 at para 51; Society of Composers, Authors and Music Publishers of Canada v Bell Canada, 2012 SCC 36 at para 27.
- See e.g., Compagnie Générale des Établissements Michelin-Michelin & Cie v National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada) (1996), 71 CPR (3d) 348 (FCTD).
- Century 21 Canada Limited Partnership v Rogers Communications Inc, 2011 BCSC 1196 at para 234.
- See CCH Canadian Ltd v Law Society of Upper Canada, 2004 SCC 13 at para 48; Society of Composers, Authors and Music Publishers of Canada v Bell Canada, 2012 SCC 36 at paras 28–29; York University v Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32 at paras 90–94.
- Bartz v Anthropic PBC, June 23, 2025, pg. 12–13
- York University v Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32 at para 92 (emphasis added).
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