Small print.
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Table of Contents

Anthropic, PBC
Notes to Consolidated Financial Statements
(Continued)

large language models and the outputs of those models, as well as claims for removal of copyright management 
information.  Certain  of  the  complaints  also  assert  claims  for  unauthorized  downloading  and  distribution  of 
copyrighted  works,  circumvention  of  technological  protection  measures,  and  violations  of  the  Digital 
Millennium Copyright Act, and certain of the complaints also name two Company executives as defendants. The 
complaints  seek  unspecified  amounts  of  damages,  injunctive  relief,  attorneys’  fees,  costs,  and  interest.  These 
matters are in preliminary stages. The Company disputes the allegations of wrongdoing and intends to defend 
itself vigorously in these matters.

The  Company  is  subject  to  several  putative  class  action  complaints  alleging  that  it  markets  and  sells 
subscription plans for Claude through false, misleading, and deceptive advertising practices. These matters are 
generally in the early stages. The Company disputes the allegations of wrongdoing and intends to defend itself 
vigorously in these actions.

Various  authors  and  publishers  have  opted  out  of  the  class  action  and  settlement  reached  in  Bartz  and  filed 
individual suits against the Company, generally alleging claims of direct copyright infringement, contributory 
copyright infringement, and removal of copyright management information related to the use of literary works 
used  in  the  training  of  the  Company’s  large  language  models.  The  Company  disputes  the  allegations  of 
wrongdoing  in  these  remaining  opt-out  actions  and  intends  to  defend  itself  vigorously  in  all  matters.  These 
proceedings remain in various stages.

The Company has received notices, demands, and other communications from several authors and individual 
rights-holders,  publishers  (including,  but  not  limited  to,  book,  news,  and  music  publishers),  platforms  and 
website  operators,  and  trade  associations,  in  the  United  States  and  other  jurisdictions  (collectively,  “Rights-
Holders”) alleging unauthorized acquisition or use of content, removal of copyright management information, 
violation of terms of service, and violation of copyrights. Some Rights-Holders have also sought to have their 
content  removed  from  the  Company’s  training  corpus  or  sought  more  information  on  how  their  content  was 
used in the development of the Company’s models. Other Rights-Holders have argued that the mere crawling of 
their sites has harmed them. The Company expects to continue to receive similar notices from Rights-Holders, 
which  may  ultimately  result  in  litigation  against  the  Company.  The  Company  disputes  the  allegations  of 
wrongdoing and intends to defend itself vigorously in these matters.

From time to time, the Company is subject to inquiries, investigations, subpoenas and requests for information 
from  federal,  state,  and  foreign  governmental  authorities,  including  the  U.S.  Federal  Trade  Commission  and 
state attorneys general, regarding, among other things, consumer protection, data protection and privacy, and 
the safety and security of the Company’s products.

In addition, from time to time, the Company is subject to claims, litigation, and other proceedings, including 
potential  regulatory  proceedings,  involving  patent  and  other  intellectual  property  matters,  taxes,  labor  and 
employment, competition, privacy and data protection, consumer protection, commercial disputes, and services 
offered  by  the  Company,  and  other  matters.  The  outcomes  of  the  Company’s  legal  proceedings  and  other 
contingencies  are  inherently  unpredictable,  subject  to  significant  uncertainties,  and  could  be  material  to  its 
operating  results  and  cash  flows  for  a  particular  period.  The  Company  evaluates,  on  a  regular  basis, 
developments  in  its  legal  proceedings  and  other  contingencies  that  could  affect  the  amount  of  liability, 
including  amounts  in  excess  of  any  previous  accruals  and  reasonably  possible  losses  disclosed,  and  makes 
adjustments and changes to its accruals and disclosures as appropriate. For the matters the Company discloses 
that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is 
immaterial,  and  the  Company  may  be  unable  to  estimate  the  possible  loss  or  range  of  losses  that  could 
potentially result from the application of non-monetary remedies. Until the final resolution of such matters, if 
any  of  the  Company’s  estimates  and  assumptions  change  or  prove  to  have  been  incorrect,  the  Company  may 
experience  losses  in  excess  of  the  amounts  recorded,  which  could  have  a  material  effect  on  its  business, 
consolidated financial position, results of operations, or cash flows.

Indemnification Agreements

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to 
these  arrangements,  the  Company  indemnifies,  holds  harmless,  and  agrees  to  reimburse  the  indemnified 
parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, 
patent,  independent  testing  and  evaluation  of  the  Company’s  models,  or  other  intellectual  property 

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