Both sides of the case have “negotiated a proposed class settlement,” according to a federal appeals court filing Tuesday that said the terms will be finalized next week.

Anthropic declined comment Tuesday. A lawyer for the authors, Justin Nelson, said the “historic settlement will benefit all class members.”

In a major test case for the AI industry, a federal judge ruled in June that Anthropic didn’t break the law by training its chatbot Claude on millions of copyrighted books.

But the company was still on the hook and was scheduled go to trial over how it acquired those books by downloading them from online “shadow libraries” of pirated copies.

U.S. District Judge William Alsup of San Francisco said in his June ruling that the AI system’s distilling from thousands of written works to be able to produce its own passages of text qualified as “fair use” under U.S. copyright law because it was “quintessentially transformative.”

“Like any reader aspiring to be a writer, Anthropic’s (AI large language models) trained upon works not to race ahead and replicate or supplant them — but to turn a hard corner and create something different,” Alsup wrote.

A trio of writers — Andrea Bartz, Charles Graeber and Kirk Wallace Johnson — alleged in their lawsuit last year that Anthropic’s practices amounted to “large-scale theft,” and that the San Francisco-based company “seeks to profit from strip-mining the human expression and ingenuity behind each one of those works.”