Legal tech startup sues US government after losing access to Anthropic's Fable 5 AI model

Legal tech firm sues US over order limiting foreign access to top-tier Anthropic models

WASHINGTON, June 23 (Reuters) - A U.S. legal technology company on Tuesday sued the federal government, challenging a directive by President Donald Trump's administration that resulted in the artificial intelligence firm Anthropic halting access to two of its most advanced models for users worldwide. Legion LegalTech Corp filed its lawsuit, opens new tab in Washington, D.C., federal court, saying a June 12 order by the U.S. Commerce Department's Bureau of Industry and Security unlawfully required Anthropic to disable its Fable 5 and Mythos 5 models for "any foreign national." Anthropic turned off access for all ⁠customers the same day to ensure compliance. San Jose, California-based Legion says it depends on Anthropic's tools for its software platform and that the U.S. government's action immediately cut off access for members of its Canada-based software development team and disrupted its business. The company builds drafting and case-management tools for attorneys. "The harm to Legion is immediate, irreparable, and existential," the lawsuit said. "The pace of frontier AI advancement is blistering, and competitive ground lost during a suspension cannot be regained after the fact." The Commerce Department and ⁠White House did not immediately respond to requests for comment. Anthropic is not a party to the litigation. Anthropic on Tuesday referred to a prior statement that said it was "grateful to the administration for their ongoing partnership in working to get this matter resolved as quickly ⁠as possible." Legion asked a U.S. judge to vacate and set aside the administration's directive targeting Anthropic. The company also said it would ask for a preliminary order to bar the administration ⁠from enforcing the directive. Anthropic and the United States are locked in legal battles in Washington and California federal courts. Anthropic sued the Trump administration after the government ⁠moved to place the company on a supply-chain blacklist over its refusal to allow the military to use its AI models for domestic surveillance or fully autonomous weapons. Reporting by Mike Scarcella in Washington; Editing by Matthew Lewis Editing by Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab

A legal tech startup is suing the US government for cutting off access to Claude Fable 5

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Winners & losers: The US government is being sued by an AI startup for halting access to Anthropic's Fable 5 model, which was available for only three days this month. Legion says that every day it goes without access to Claude Fable 5, the company's ability to survive is being eroded. Legion filed the lawsuit in Washington, D.C., federal court, challenging a June 12 directive from the Commerce Department's Bureau of Industry and Security. The order required Anthropic to block any foreign national, inside or outside the United States, from using Fable 5 and Mythos 5. Anthropic responded by turning off access to the models for everyone while it worked out how to comply. That was a problem for Legion, a San Jose-based legal tech startup that builds AI tools for lawyers. The company says its software can draft pleadings, discovery requests, motions, and other court documents. It also employs Canadian nationals who work remotely from Canada, meaning parts of its development team were cut off even after Anthropic restored Fable 5 with nationality-based access controls and extra compliance screening. According to Reuters, Legion claims it depends on Anthropic's tools for its platform and wants a judge to vacate the directive. It also plans to seek a preliminary order blocking the government from enforcing it. "The harm to Legion is immediate, irreparable, and existential," the complaint states. "The pace of frontier AI advancement is blistering, and competitive ground lost during a suspension cannot be regained after the fact." Fable 5 was Anthropic's attempt to offer a public version of its more restricted Mythos-class technology. Mythos 5 remained limited to a small group of cyberdefenders, infrastructure providers, and select researchers, while Fable 5 used the same underlying model with heavy safeguards. Those safeguards were designed to refuse or redirect risky cybersecurity, biology, and chemistry requests, sometimes routing users to the older Claude Opus 4.8 model instead. The government's concern reportedly centered on claims that Fable 5 could be jailbroken, allowing users to bypass some restrictions. Anthropic said it reviewed the technique and believed the demonstrated vulnerabilities were minor, already known, and discoverable by other public models. Anthropic is not a defendant in Legion's lawsuit. The Commerce Department and White House did not respond to Reuters' requests for comment.

Someone Is Suing the U.S. For Making Them Go Without Anthropic's Fable 5 Model

Anthropic's Claude Fable 5 AI model was released to the public on June 9 and taken down on June 12. By my math, it was available for a little over three days. Anthropic took down Fable 5 voluntarily in a manner of speaking, but by all accounts it was complying with an export control directive from the U.S. government under threat of penalties. Now a startup called Legion says in a new lawsuit against the government that Claude Fable 5 was so critical to its business that, "Each day the directive remains in force disrupts Legion's product, operations, sidelines its engineers, and erodes the company's ability to survive in a field defined by continuous access to the most capable models," according to Bloomberg, which pulled that line from the court filing. Legion, by the way, is an AI company for lawyers. According to its about page, its product works like this: "Upload your case documents. Legion drafts your pleadings, discovery, and motions in minutes - with built-in editing tools to refine and ship. Export a fully formatted Word document or a bookmarked PDF with exhibits and slip sheets. Ready to file, ready to serve." Arthur Rothrock, the CEO of Legion, said to Bloomberg, "Who's to say they can't do this any other time against another company, like OpenAI?" When Anthropic took down Fable 5, Legion says it "lost the latest tool at the center of its development instantaneously," which caused, "immediate, irreparable and existential" harm, again per Bloomberg. Legion's staff, Bloomberg notes, includes Canadian nationals located in Canada. The Fable 5 model, the most advanced, consumer-facing version of Claude, was part of the same class as the Claude Mythos Preview model which Anthropic had said was too dangerous to release to the public. Fable arrived about two months later, advertised as a version of Mythos with elaborate and conspicuous safeguards. But shortly after its release, the government -- according to media reports from multiple publications -- was informed that Amazon researchers had found workarounds that bypassed the safeguards. This, reportedly combined with previous worries that China-connected entities had access to Mythos, apparently led to the export control order, requiring Anthropic to keep Mythos and Fable away from anyone not a U.S. national. Faced with implementing an almost impossibly intricate citizenship-confirmation scheme in order to use Fable 5, Anthropic announced that it was pulling the plug. Efforts to resolve the issue have been ongoing. Anthopic's statement to Bloomberg when asked about the suit says it is "grateful to the administration," and remains, "committed to working alongside the government towards our shared goals of protecting critical infrastructure and making sure the US leads in AI." The White House and Commerce department apparently didn't respond to Bloomberg.

'Way out of line': The US government is being sued for executive order restricting foreign access to Project Glasswing

* US government ordered Anthropic to pull frontier models for foreign nationals * Legal AI startup claims it had contractual access to those models * Anthropic doesn't agree with the White House - but complies Legal AI startup Legion LegalTech Corp has filed a lawsuit challenging a June 12 government order that forced Anthropic to restrict access to its most advanced AI models, Fable 5 and Mythos 5, for foreign citizens (via Reuters). According to the complain, the Bureau of Industry and Security (BIS) gave Anthropic around 90 minutes to comply with the order, or face civil and criminal penalties. All foreign nationals, including those living inside and outside of the US, and even Anthropic's own employees, are said to be affected by the order. Government order to ban Anthropic models internationally legally challenged Legion LegalTech Corp acknowledges that the order was triggered because of concerns that users could jailbreak models into reviewing software code and identifying vulnerabilities, but the startup argues this is a common capability of all frontier models and doesn't just affect Anthropic's models. The company says it had contractual access to Anthropic's Fable 5 model, and was actively integrating it into its products that draft and manage cases. Because the company employs Canadian developers working remotely from Canada, it lost access to the model once restrictions took effect. "Anthropic took no independent action to restrict Legion's access; it complied with the government's command under threat of enforcement consequences," the lawsuit reads. The lawsuit argues that no current export control classifications cover access to cloud-hosted AI models. It also references an independent reviewer, who sees the government's action as disproportionate and "way out of line." Anthropic announced the frontier models on June 9. By June 12, it had released a statement in response to the government directive, criticizing the government for "not provid[ing] specific details of its national security concern." "We are complying with the government's legal directive and are removing access to Fable 5 and Mythos 5 for all users." Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.

Legal tech firm sues US over Anthropic AI access ban for foreign nationals

The US government cannot use export-control laws to restrict access to Anthropic's AI models because no existing export control covers hosted AI models or their outputs, according to a lawsuit filed by Legion LegalTech against the US government in a federal court in Washington, DC. Filed on June 23, the lawsuit argues that the government's June 12 directive ordering Anthropic to disable its Fable 5 and Mythos 5 models for all foreign nationals worldwide exceeded its statutory authority under US export-control laws and emergency powers legislation. The legal technology company, which relied on Fable 5 for product development and employed Canadian developers, says the restrictions disrupted its operations and prevented its engineers from accessing tools central to its business. The lawsuit seeks a declaration that the directive is unlawful, an order setting it aside, and an injunction preventing its enforcement. Legion argues that the government acted beyond its legal authority, misapplied export-control provisions, violated limits contained in the International Emergency Economic Powers Act (IEEPA), and issued the directive without a lawful basis. No export control covers hosted AI models: The lawsuit argues that the government's export-control authority does not extend to access to hosted AI models. According to the filing: * The "only export-control classification that ever directly covered advanced AI model weights -- ECCN 4E091 -- was rescinded in May 2025 with no replacement". * "No currently operative provision of the Commerce Control List classifies access to a hosted AI model, or its inferential text output, as a controlled item." The lawsuit therefore alleges that "Commerce cannot enforce a control that does not exist." The complaint further contends that users of Fable 5 never received model weights, source code, or technical data and therefore did not receive anything that would qualify as a controlled export. Government stretched export-control powers beyond intended purpose: Legion also challenges the legal mechanisms the government relied on to suspend access to Anthropic's models. According to the complaint: * The directive relied on Section 4817(b)(1) of the Export Control Reform Act and a BIS "Is Informed" letter issued to Anthropic. * Legion argues that Section 4817(b)(1) can only be used after the government follows a formal process, including rulemaking and coordination with international partners, which "never occurred." * The company also argues that "Is Informed" letters are normally used in specific cases where authorities identify concerns about a particular customer, end user or military-related activity. * However, the June 12 directive applied to "any foreign national" worldwide, regardless of nationality, location or intended use. * The complaint describes the measure as a blanket restriction and argues that the government used a "targeted, case-specific tool for identified military-intelligence end-use risks" as "a mechanism for imposing blanket worldwide bans". As a result, Legion claims the government acted "in patent excess of statutory authority" by using export-control provisions in a manner not authorised by law. IEEPA cannot be used to restrict AI outputs: The complaint further argues that the directive is unlawful if it relies on the IEEPA. According to the filing: * The Berman Amendment excludes from IEEPA authority any power to regulate "the exportation of information or informational materials in any format or medium of transmission". * The statute, the lawsuit says, does not merely limit such authority but "withholds it entirely". Legion argues that AI-generated outputs, including "drafted text, written legal analysis, summaries, and similar composed material," qualify as informational materials protected by the exemption. The complaint therefore alleges that the directive's purpose and effect are to stop the flow of informational materials to users. No qualifying national emergency According to the complaint: * "No national emergency has been declared with respect to the purported threat" posed by the models. * The alleged threat did not have its "source in whole or substantial part outside the United States" as required under the statute. The filing notes that the models were developed by a US company, hosted in the US, and offered through a US commercial platform. Directive conflicts with White House policy: The lawsuit additionally points to a June 2 executive order signed by President Donald Trump, 10 days before the Anthropic directive. According to the complaint: * The order stated that nothing should be interpreted as authorising "a mandatory governmental licensing, preclearance, or permitting requirement for the development, publication, release, or distribution of new AI models." Legion argues that the June 12 directive imposed "precisely such a requirement." The filing states: "Where the Executive publicly disclaims a power and then exercises it, the inference that no statute confers the power is compelling." Arbitrary and capricious action: Finally, the complaint alleges that the directive was arbitrary in nature:

Legal tech firm sues US over order limiting foreign access to top-tier Anthropic models

WASHINGTON, June 23 (Reuters) - A U.S. legal technology company on Tuesday sued the federal government, challenging a directive by President Donald Trump's administration that resulted in the artificial intelligence firm Anthropic halting access to two of its most advanced models for users worldwide. Legion LegalTech Corp filed its lawsuit in Washington, D.C., federal court, saying a June 12 order by the U.S. Commerce Department's Bureau of Industry and Security unlawfully required Anthropic to disable its Fable 5 and Mythos 5 models for "any foreign national." Anthropic turned off access for all customers the same day to ensure compliance. San Jose, California-based Legion says it depends on Anthropic's tools for its software platform and that the U.S. government's action immediately cut off access for members of its Canada-based software development team and disrupted its business. The company builds drafting and case-management tools for attorneys. "The harm to Legion is immediate, irreparable, and existential," the lawsuit said. "The pace of frontier AI advancement is blistering, and competitive ground lost during a suspension cannot be regained after the fact." The Commerce Department and White House did not immediately respond to requests for comment. Anthropic is not a party to the litigation. Anthropic on Tuesday referred to a prior statement that said it was "grateful to the administration for their ongoing partnership in working to get this matter resolved as quickly as possible." Legion asked a U.S. judge to vacate and set aside the administration's directive targeting Anthropic. The company also said it would ask for a preliminary order to bar the administration from enforcing the directive. Anthropic and the United States are locked in legal battles in Washington and California federal courts. Anthropic sued the Trump administration after the government moved to place the company on a supply-chain blacklist over its refusal to allow the military to use its AI models for domestic surveillance or fully autonomous weapons. (Reporting by Mike Scarcella in Washington; Editing by Matthew LewisEditing by Matthew Lewis)