Why the High Court of Justice Denied UK Broadcast Royalties to US Performers

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In my most recent post, I wrote about the unsuccessful effort of the American Federation of Musicians (AFM) to overturn a British regulation that affirmed US performers would continue to be denied payment of royalties for recordings broadcast over radio in Britain. The British action came after a public consultation and was based on the principle of material reciprocity; British performers are denied those same benefits in the US. This also ensures that royalty revenues are distributed in Britain as long as British performers in the US are not entitled to receive royalties for their recordings. While Britain has long maintained a policy of material reciprocity (in effect, treating US performers as badly as the US treats its own and foreign performers), the AFM saw an opportunity to bring a legal challenge because Britain had just expanded the mutual recognition of royalty rights for performers as a result of its accession to the CPTPP Trade Agreement (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership). This is the sequel to the earlier blog post.

As part of the part of legislation introduced to implement its accession obligations to the other eleven members of the Agreement (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam), the UK agreed to grant national treatment with respect to royalties to performers from those countries, and to performances first published in those countries. As reported by the International Comparative Legal Guide;

“Parliament amended the Copyright, Designs and Patents Act 1988 to widen the circumstances in which performances would qualify for protection, including where recordings were first or simultaneously published in a qualifying country. Those amendments appeared to extend statutory rights to a broader class of foreign performers, including those from the United States.”

To close this potential loophole, regulations were subsequently passed allowing the UK government to impose restrictions limiting the scope of the amendment to nationals of CPTPP member states only. Ironically, even though the US was the original inspiration for the Trans-Pacific Partnership, which later became the 12 nation CPTPP, the United States is not a member because–in his first act as President in 2017–Donald Trump announced the US was withdrawing from the Agreement. To ensure that benefits arising from the CPTPP apply only to citizens of countries that are members of the Agreement, the British government clarified and narrowed the grant of national treatment through the Copyright and Performances (Application to Other Countries) (Amendment) (No. 2) Order, 2024. (the “Order”). This legislative word salad is hard to decipher but the end result was the continued exclusion of US performers, reflecting the concerns of the British music community. In a further twist, British law allows the payment of royalties to US producers, but not performers. The AFM challenged the Order.

The AFM claimed the Order conflicted with three international treaties, the Rome Convention of 1961, the WIPO Performances and Phonograms Treaty (WPPT) and the CPTPP, even though the US is not a Party to two of these, the Rome Convention and the CPTPP.

In the case of the Rome Convention, the claimants’ case, as summarized by the Court, (Para 24) was that:

“…since 1963, the UK has been obliged by the Rome Convention to provide for payment of equitable remuneration to US national performers whenever a phonogram carrying their performances is published in a Contracting State within 30 days of its first publication, regardless of the fact that the US is not a party to the Convention and regardless of the fact that US law provides for no equivalent right to UK performers when phonograms carrying their performances are broadcast or played to the public in the US.”

The Convention requires granting of national treatment to performances that are published in a contracting state within 30 days of original publication, regardless of the nationality of the artist, unless the contracting state has opted out. In 1963 Britain declared that it would not grant national treatment to recordings produced by a national of a non-Contracting State, but with a caveat “unless…the phonogram has been first published in a Contracting State…”. That state must also have not opted out of national treatment. The AFM claimed this wording meant that broadcasts in the UK of recordings produced in the US that had also been published in a Rome Convention country simultaneously or within 30 days of original publication qualified for equitable remuneration (royalties). Most US recordings are usually released abroad within a month of their US release.

In the case of the WPPT, to which both the US and UK have acceded, national treatment is required unless a derogation has been noted. A derogation would allow a member to restrict royalty payments if not provided reciprocally. However, the UK has made no such derogation.

Finally, with regard to the CPTPP, the claimants’ case was based on the fact that if a phonogram was first published in a CPTPP member state, (e.g. Canada), it should be accorded national treatment regardless of the nationality of the performer. This is reminiscent of the “Backdoor to Berne” used by US book publishers before the US acceded to the Berne Convention in 1989, whereby they simultaneously published in Canada to get the benefits of the global protection afforded by membership in the Convention, even though the US was not a member.

On the face of it, the AFM’s arguments would seem to have legal logic even if the end result would be to give US performers rights that they and foreign performers do not enjoy in the US. The validity of their arguments was further reinforced by the fact that the British government, subsequent to the passage of the 2024 exclusion Order, amended its reservation to the Rome Convention to remove the controversial wording of “unless…the phonogram has been first published in a Contracting State…etc”. But in any event, the AFM’s claims were all dismissed–but not because the Court rejected the arguments on their merits. The case was dismissed because the treaties referred to have not been incorporated into British legislation.

Under UK law (and US law too, for that matter), treaties are not self-executing. Their provisions must be enacted into domestic law insofar as legal changes are required for treaty compliance. An example would be changes to the Customs tariff. Changes are made to domestic legislation to implement a treaty only to the extent necessary. The full text of a treaty is not enacted into legislation. A treaty is not binding with respect to domestic law; legislation is. The full text of a treaty is a document in international law, but it is not necessarily part of the corpus of domestic legislation. In legal terms, the treaty is “unincorporated” in terms of domestic legislation. As explained by Google’s AI overview, which is probably about as concise a definition as you are going to get:

“An unincorporated treaty is an international agreement ratified by a state’s executive branch but not formally enacted into domestic law by its legislature (e.g., Parliament or Congress). While binding internationally, these treaties generally do not create enforceable rights or obligations for citizens in domestic courts.”

Or, to quote from the Court’s decision (para 117)

“It is to be expected that the UK government will seek to comply with the UK’s international obligations as it understands them to be, but the fact that it says so (either of its own motion or in response to questioning, and with whatever degree of emphasis or conviction) does not turn the provisions of unincorporated treaties into a source of rights and obligations in domestic law”.

Thus, the AMF challenge failed. It was the view of the British High Court of Justice that here is no requirement in British law to grant national treatment royalty rights to US performers for music broadcast in the UK, despite whatever treaty obligations the UK may have taken on. Note the similarity to the Irish Music Case in the US that I referred to last week. The US was found to be in default of its international obligations under the WTO but because the US Administration was unable to get Congress to amend US law, Irish musicians have been blowing their tin whistles in vain for more than two decades. With respect to performance royalties, as I noted in last week’s blog post, maybe it’s time the AMF redoubled its efforts to fix the problem at home. The Court in effect suggested this was the solution; (Para 69)

“…the reason why US performers receive no such remuneration is that US law does not provide equivalent rights to UK performers. The position would be different if US law were to provide for reciprocity in this respect…”;

Once the US treats performers with the same respect and benefits as the rest of the world, these issues of material reciprocity vs national treatment would quickly disappear.

© Hugh Stephens, 2026. All Rights Reserved.

US Musicians Unsuccessfully Seek Royalty Benefits in UK they are Denied in US: Maybe They Should Fix the Problem at Home?

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US artists and musicians, unable to get Congress to grant them royalties for their performances broadcast over terrestrial radio networks in the US, continue to try to obtain in foreign countries what they cannot get at home. Sometimes they have been successful, as in the case of Canada where as part of the update of NAFTA and its replacement by the Canada-US-Mexico (CUSMA) Agreement (or USMCA if you prefer) in 2020, Canada granted US performers “national treatment”. This means they get treated “no less favourably” than—i.e. just as well as—Canadian performers with respect to royalty payments. In other words, they get paid.  Canadian performers in the US also get national treatment, which means they get treated just as badly as their US counterparts, receiving no royalties at all when their music is broadcast terrestrially. The US music industry, or at least the part of it affected by US restrictions on royalty payments (performers and labels), has long lobbied to remove this inequity. A few years ago legislation designed to fix this problem, the American Music Fairness Act, or AMFA, was introduced into Congress. As I explained at the time;

“US terrestrial radio stations are not required to pay royalties to performers or labels for playing recorded music on air. Online broadcasters and streaming services do, but not over-the-air AM/FM radio stations. Terrestrial stations do, however, pay royalties to composers and songwriters for music played on air, but not to performers.”

It is a strange, assymetric exemption from the requirement to pay royalties. Passage of AMFA would close this loophole by ensuring that performers (artists, singers and musicians) as well as owners of the sound recording copyright, normally labels, receive royalties when a work is broadcast commercially on terrestrial radio. But the AMFA bill, and successive versions introduced since, did not make it across the finish line.

If this seems odd and inequitable, it is. It relates to the influence of the National Association of Broadcasters (NAB) in Congress. For decades the NAB has managed to block legislation that would fix this anomaly by arguing that terrestrial stations provide “free airtime” that promotes new recordings. This is a specious argument akin to the canard that platforms distributing pirated content promote legitimate business by giving new content greater exposure. If the “free exposure” argument was ever valid, it is no longer in a world where new music is promoted on digital radio channels and through Spotify, YouTube and Tiktok. Nowadays, triggering algorithmic discovery is key, yet over-the-air radio stations are still getting a free ride when playing recorded music. Given the strength of the NAB lobby don’t look for AMFA to pass Congress any time soon, despite the concerted efforts of the American Federation of Musicians. And it is not just a US problem. Not only do US performers not get paid when their music is broadcast terrestrially on radio in the US, neither do non-US performers or labels. This leads to another dimension of the issue.

The failure to allow foreign performers to collect royalties in the United States usually has a knock-on effect for US artists when their music is played abroad–unless the US has been able to obtain national treatment through a special bilateral agreement. Performers’ organizations in other countries object to US musicians being granted royalties in their own country because if US artists gain access to a national royalty pot, the amount paid out to domestic performers is reduced (by the amount paid to US artists). When US artists are denied royalty payments on the basis of reciprocal as opposed to national treatment, the collected royalties that would normally go to American performers are redistributed to domestic counterparts or retained by performing rights organizations for the benefit of the domestic music industry as a whole. Normally, payments going to US performers abroad would be offset by payment of royalties in the US to foreign musicians–and everyone would gain–but because of US legislation, the US royalty revenue stream for this music category is non-existent, for everyone. Therefore, from the point of view of domestic musicians, it is unfair for US artists to expect a benefit abroad that is denied to foreign performers in the US. International copyright treaties allow for withholding of national treatment benefits under the principle of material reciprocity. Put bluntly, this means that “If you withhold royalty payments from our performers, we will do the same to yours”.

While material reciprocity is a well recognized principle of international copyright, it’s not all that simple because there are provisions in some international treaties that require national treatment (i.e. payment of royalties) for recordings based on where they are first released even if the artists themselves are from countries (like the US) that deny royalty benefits. This would override reciprocity provisions. In 2020, the EU Court of Justice ruled that denial of royalties to US performers in Ireland on the basis of reciprocity was inconsistent with EU law, which does not mention reciprocity. Since then the Netherlands and Sweden have dropped the reciprocity rule and allow payment to US performers, but most EU countries still do not. Nor does the UK, a non-EU member since January 31, 2020.

It is ironic that Ireland was the jurisdiction where US performers made a legal breakthrough in terms of overseas royalty payments given the WTO Irish Music case. Here the US continues to ignore a WTO panel finding made over 25 years ago, in 2000. The WTO panel ruled that another royalty exemption, in this case a US law that allows business establishments to play licensed music without royalty payments as long as it is “background music”, is non-compliant with US treaty obligations. The US Administration at the time was unable to get Congress to amend the law and offered to pay compensation, but this lasted only three years. This case remains an outstanding irritant between the US and the EU, with the US continuing to say that it will “work closely with the U.S. Congress and will continue to confer with the European Union in order to reach a mutually satisfactory resolution of this matter.” So far nothing has happened, and Irish musicians are out of pocket at least $1 million dollars a year for Irish music played as background entertainment in US business establishments. (i.e. Irish pubs in the US).

If you are looking for consistency in abiding by trade obligations when it comes to large countries versus small ones, you will be disappointed. The Irish Music Case is a good example of assymetric respect for international trade rules. The Donald Trump technique of respecting trade obligations very selectively, or not at all, is not a new phenomenon, although it is far more apparent today. In any event, if you are an advocate for a particular constituency, such as US performers, consistency is not the issue. Results are. It was in this vein that the American Federation of Musicians (AFM) challenged recent British legislation that denied payment of royalties to US performers. The UK has maintained the principle of material reciprocity for many years, but its recent accession to the CPTPP Trade Agreement (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) opened the door, or so thought the AFM , to revisiting the issue. They brought forth a number of interesting arguments, but in the end did not prevail. In my next blog post, I will look at the issues raised, and the reasons for the British court’s decision.

At the end of the day, the best solution for everyone would be to close the US loophole. This would eliminate the reciprocity issue once and for all. Maybe it’s time the AFM redoubled its efforts to fix the problem at home.

© Hugh Stephens, 2026. All Rights Reserved.

Korea’s AI Action Plan: Declaring War on Creators?

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In the scramble to jump on the global AI bandwagon, Korea has floated a proposal that would supposedly remove “legal uncertainty” for AI developers who use copyrighted content to train AI platforms. Unfortunately, the proposed “solution” threatens to throw Korea’s globally renowned creative sector under the bus. Nor does it remove the uncertainty.

As part of President Lee Jae-Myung’s National Artificial Intelligence Strategy, its Presidential Council has put forward a 98 point “Action Plan”, a blueprint for implementation. There are many aspects to an AI strategy, but a key element is to ensure legal clarity with respect to the use of content for AI training, especially copyrighted content. The Action Plan purports to do this. Its Point 32 proposes the introduction of “explicit exceptions under the Copyright Act to allow copyrighted works to be used without legal uncertainty (emphasis added) in the processes of collecting and analyzing data available on the web”. In other words, introduction of a copyright exception for text and data mining (TDM), subject to certain conditions such as some form of remuneration, transparency, and opt-out features for rightsholders.

If the goal is to remove “legal uncertainty” regarding the use of copyrighted works, this proposal falls short of the mark. No exception can provide 100% certainty given the Berne Convention requirement that any exception meet the so-called “three step test”, meaning that an exception is permitted only in certain special cases, provided that it does not conflict with normal exploitation of the work and does not unreasonably prejudice the author’s legitimate interests. While there will always be a degree of uncertainty regarding exceptions, the good news is there is a ready alternative. The surest way to ensure legal certainty is to encourage licensing of content from rightsholders. The problem with the introduction of a TDM exception—or even the discussion of a possible TDM loophole–is that it diminishes the likelihood of reaching licensing solutions by reducing the pressure on AI developers to open their wallets to reach licensing deals.

It is even more bizarre that the tech industry is pressing for a TDM exception given that Korea is one of the few countries, alongside the United States, that has adopted a fair use provision in its Copyright law. This was done in 2011 as part of the implementation of the Korea-US Free Trade Agreement after heavy lobbying by the tech sector. Fair use allows courts to make case-by-case judgements as to whether a given use meets fair use criteria, thus potentially allowing reproduction of copyrighted material without advance permission from the rightsholder. If free use of copyrighted material for AI training can be shown to be “fair”, why is a TDM exception needed? Even in countries where fair use does not apply (which is most of the world), there is no convincing case or consensus on the need for a TDM exception; there is even less reason for one in a state that has already adopted fair use.

Point 32 of the Action Plan takes note of the existence of fair use in Korea, commenting that the Ministry of Culture, Sports and Tourism is preparing fair use guidelines. These are to provide interpretive guidance on the exemption provisions of the Copyright Act to enable companies to utilize copyrighted data “with greater confidence”. Despite this, the Action Plan claims these guidelines alone are unlikely to fully eliminate uncertainty and judicial risks. Voluntary licensing, however, would eliminate both.

It is well established that AI developers need vast amounts of data to improve the performance of their AI platforms. To date they have largely employed a “take first, ask later” policy. This has led to numerous lawsuits pitting rightsholders against the tech industry, mostly but not exclusively in the US. AI developers in the US have argued that what they are doing amounts to “fair use” because the final AI product is used for a different purpose from the original and thus does not compete with it. That is highly debatable, especially with image and music-based AI works. To date, the results from the US courts have been mixed.

The legality of the tech industry’s unauthorized use of copyrighted content is an issue that a number of countries, in Asia and around the world, are looking at. Various solutions have been proposed to eliminate the uncertainties that arise from leaving the decision to the courts. Among these are TDM exceptions which have been introduced, albeit with strict limitations, in the UK, the EU and Japan. In the UK for example, use is limited to non-commercial purposes. In the EU, it must be accompanied by transparency requirements and opt-out provisions for authors. In Japan, if the unauthorized user derives commercial benefit from the content, the safe harbour does not apply. Australia has explicitly ruled out introducing a TDM exception in order to protect its creative sector, while many others (eg. India, Canada) have no TDM provision in their copyright law. As noted above, the clearest way to remove any uncertainty about the legality of using copyrighted works is to incentivize and recognize voluntary licensing as the solution. This ensures that rightsholders receive appropriate compensation for the work they have put into creating content, while guaranteeing legal certainty for licensees.

The Korean strategy paper argues that AI companies are required to obtain individual consent from each copyright holder “leading to significant costs and time burdens in securing high-quality training data”. But large amounts of high-quality content can be accessed through voluntary licensing agreements with major content creation companies such as studios, publishers, broadcasters, music labels and so on. As for individual authors and artists, one possibility is to look at the model currently used for licensing print and music content through Collective Rights Management Organizations as a supplement to voluntary licenses signed with major rightsholders.

In addition to being instructed to prepare the necessary amendment to the Copyright Law for presentation to the National Assembly by Q2 of this year, the Culture, Sports and Tourism Ministry, in cooperation with the Ministry of Science and Technology, is to “promulgate standard contract templates for the licensing and transfer of copyrights for AI training”. This is the kind of heavy-handed market intervention that is guaranteed to stifle voluntary licensing. Not only that, it amounts to expropriating the rights of Korean creators to manage their works.

The Action Plan gives a nod to the importance of compensating rightsholders and claims it wants to establish a system that respects the rights of creators. However, given the size and importance of Korea’s cultural industries, from film to K-Pop to literature, it is surprising there isn’t greater recognition of what an important strategic and economic asset this sector represents for Korea. Although the Strategy acknowledges that content industries should be able to share the benefits of growth in the AI industry, the proposed solution is unbalanced and biased toward clearing any so-called “obstacles” to unimpeded use of content. As a result,  just days after the extremely brief (20 day) consultation period on the Strategy had closed, in mid-January sixteen creator and rightsholder groups issued a strong statement condemning the Action Plan, labelling it “an attempt to fundamentally undermine copyright as a private property right”.

While paying lip service to creator’s rights, the Plan does not address how creators can enforce these rights (other than through the creation of opt-out protocols, which stands the normal copyright procedure of seeking permission prior to usage on its head). The Strategy seems to lead to what has been described by many as a “use now, pay later” system, with little information on how payment would be calculated or implemented. On the other hand, prior, voluntary licensing of content for AI training is a solution that would respect the rights of Korea’s creators while providing the welcome revenue sharing and income stream for which the Strategy advocates. Strong content industries benefit AI development in Korea by encouraging continued creation of the valuable Korean language content so necessary to refine and improve AI models. Conversely, providing the tech industry with an escape hatch to avoid licensing by instituting a TDM exception is the surest way to kill a licensing market for AI content. It will only continue the legal uncertainty that the Presidential Council seems to feel is hindering AI development in Korea.

The one-sided formulation of the Strategy to date has provoked an inevitable negative reaction from Korea’s cultural industries. This is not surprising since the strategy of the tech industry, in Korea and elsewhere, is to avoid dealing with ministries directly responsible for culture and copyright and instead lobby industry, technology and science ministries to bring pressure for changes to copyright law. This adversarial stance is unfortunate as the content and tech industries need and can help each other. The Strategy needs to be amended so rather than throwing the cultural and copyright industries under the bus in the name of facilitating AI development, Korea provides the framework for a mutually beneficial and legally certain relationship. This is best done by upholding longstanding copyright principles and encouraging the growth of a voluntary licensing market for content used in AI training.

© Hugh Stephens, 2026. All Rights Reserved

Shssh! It’s the Silent Book Club

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I don’t remember when I first heard about silent book clubs (it was fairly recently) but I was delighted to find out through LinkedIn that one existed in my hometown. I have never been a member of a book club, although my wife is a member of at least two, or is it three? I have always been chary of making the commitment to read a certain amount of content by a set date, given how easily distracted I am by the normal run of events, and so have never stepped up to join one. (As an aside, I am delighted that my wife enjoys them though, because periodically she hosts one of her groups at our home with the happy result that after everyone leaves, there is lots of leftover home baking to enjoy). But I digress. One of the advantages of the silent book club format is that there is no commitment to read a certain book by a certain date. You can read whatever you want, at your pace, and simply show up to discuss your book, (or not), and learn about others.

According to the website Silent Book Club (trademark registered, apparently), it all started in San Francisco in 2012 (although I suspect the format has been going on for much longer than that). There is a community of over 2000 chapters in more than 60 countries ranging from Iceland to Indonesia. You can go on to the website to find one in your community. While there you can also order a BYOB (Bring Your Own Book) hat or sign up for a book reading retreat in Italy or Hawaii.

Silent book clubs are supposedly attractive to introverts, and it is true that reading a book can be a pleasurable solitary experience not necessarily shared openly with others. But it can also be a social experience; think of Grandma and Grandpa silently rocking by the fire while they read their books together(maybe in silence broken only by the ticking of the wall clock) or people congregating in libraries to read in each others’ company (silently). In the case of silent book clubs, after a period of quiet reading participants are encouraged to share with others information on the book they are reading, but there is no pressure to do so. So how does it work in practice?

A couple of weeks ago, my wife and I decided to kick the tires on our own Silent Book Club in town. We were informed it would gather at a local bistro at 2 pm and that is where we showed up, ready to go. It wasn’t hard to find the gathering because of the noise. It was the most unsilent silent book club imaginable. Animated people were busy introducing themselves, ordering coffee (or stronger tipples), and generally enjoying themselves. There were about 30 people in all, although only 4 of them were men. Good odds. The coordinator came around and took note of everyone’s book and then set the timer. Silence fell, only to be broken by the occasional slurp of coffee and the rustle of the turned page. Of all those present, I only noticed one person using an e-reader, which I found a bit surprising given the growing popularity of digital books, as I discussed in a recent blog post. A few had what were obviously library books, outed by their bar codes on the covers, but most people seemed to have turned up with a purchased paperback edition of their current favourite. I was astounded at how quickly the hour of quiet reading went by. Then it was time to break into small groups and discuss our respective books. This I found to be the most interesting part of the experience.

There were 4 women and one other man in my group. Both my male colleague and I were reading non-fiction, but all the women were into fiction. I was and am reading He Did Not Conquer, the recent book written by Canadian journalist Madeleine Drohan about Benjamin Franklin’s obsession with having Canada (then mostly the settled area around Montreal and Quebec City, populated primarily by French-speaking merchants, habitants and clergy) join what became the United States. While everyone knows that Franklin was one of the Founding Fathers of the United States, the book traces his long obsession with “Canada” because of the presence of a large, predominantly ethnic French population professing, in the parlance of the day, “Popish” beliefs, and the threat he believed they posed to the English-speaking colonies and later the US. Even before the Declaration of Independence in 1776 a ragtag American army had captured Montreal and attacked Quebec City (on December 31, 1775), only to be driven off. Franklin spent some time in Montreal in April and May, 1776, trying unsuccessfully to convince the locals to join the revolutionary cause. That was my book, certainly relevant today given the current 51st state rhetoric from Donald Trump. The other non-fiction work was For the Sun After Long Nights: The Story of Iran’s Women-Led Uprising, by Fatemeh Jamalpour and Nilo Tabrizy, also extremely topical given what is happening in Iran today.

The books being read by my female companions were equally eclectic. They included Yellowface by Asian-American writer Rebecca F. Kuang, a complicated story of plagiarism and self-justification apparently and a Canadian novel by Elizabeth Hay, set in Yellowknife, NWT, titled Late Nights on Air. Another was a Freida McFadden mystery (I forget which one, but it inspired me to go and see the movie The Housemaid based on one of her books). The final book was The Island of Sea Women, by Lisa See, which is a story of female friendship set in Korea’s Jeju Island. It features two haenyeo, females who dive (traditionally without assistance of breathing apparatus) for abalone, woven with a story of Japanese occupation and collaboration. This is a pretty impressive Asian background setting for an American writer although Lisa See has written a number of books with oriental themes. So there you have it, a microcosm of what people are reading just from my small discussion group. It was an interesting range of interests and topics and I learned quite a bit.  My wife and I think we’ll be back again next month. Group reading, even silently, is fun and can be very social. Why not give it a try?

© Hugh Stephens, 2026. 

Chinese (or is it Lunar?) New Year and Copyright

A festive design featuring a red background with gold and floral decorations, celebrating the Happy New Year 2026, themed around the Year of the Horse.

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The China Media Group, (CMG) one of the world’s largest broadcasters, has just issued an announcement warning everyone, but mostly I suppose the Chinese-speaking world, that it retains the sole authority to license globally the mascots, logo, and creative products of its 2026 Spring Festival Gala, for both commercial and non-commercial purposes. According to this website, the Gala program which is broadcast each year in China on the eve of the Lunar New Year, “has been recognized by Guinness World Records as the most-watched annual television program on the planet”. Even bigger than the Super Bowl! This year, the Year of “Fire Horse”, the Gala will feature “four majestic ponies”. These equine mascots are apparently, “inspired by classic representations of horses across different periods of Chinese history” and are “adorned with classic elements of traditional Chinese clouds and thunder”. You’ve been warned. Don’t copy them. If you want to watch all the action, you can view the show here. (Check out the dancing warrior robots. If that doesn’t send a shiver down your spine, nothing will).

While using horse images to depict the Year of the Horse cannot, of course, be copyrighted, the CMG will have copyright on the specific horse designs it is using for its mascots. Lunar New Year (or should it be called “Chinese New Year”?) is big business, as hundreds of millions of people will be celebrating it. Gold coins and bars will be struck for collectors and countries around the world, from the US to the Isle of Man, will be issuing Chinese New Year animal-themed postage stamps. (The Hong Kong Postal Museum has a hilarious post outlining the political machinations surrounding the Year of the Pig postage stamp issued in 1970 by the British colonial authorities). From broadcasts to banquets, from music to mascots, the Sinosphere (and by that I also include Chinatowns around North America and the world) will go into a red-hued frenzy this year beginning on New Year’s Eve, February 16, and continuing for 16 days thereafter. The holiday period in China marks one of the most intense short term urban-to-rural migrations of people anywhere, with family members traditionally returning home to visit parents, children and other relatives and to perform traditional ceremonies. Rooted in tradition, this migration sees about 300 million people move from one end of China to the other. Rail networks in particular are strained to the limit. Visit China at some other time if you want to go there.

Entrepreneurial merchants will be quick to market equine-based trinkets and paraphernalia this year, and knockoffs of the CMG “majestic ponies” will no doubt be popular in flea markets around China. So just as Hasbro protects the copyright and trademarks on its “My Little Pony” franchise, CMG is sending warning that it will assert its rights, as it should.

Music is another area where copyright could come into play as people create New Year’s videos. This website (Soundstripe) has made a virtue of a necessity by plugging its royalty-free songs and playlists for “Festive Lunar New Year Videos”. And while we are on the topic, should the holiday be called “Lunar New Year” or “Chinese New Year”? It is of course based on the lunar calendar but also tied to the centuries old Chinese zodiac, with its 12 year animal based cycle.

The problem with the “Chinese New Year” (CNY) label, widely used in North America, is that it imposes a Chinese label on similar celebrations in other parts of East Asia, notably Korea (where it’s called Seollal) and Vietnam (where it’s called Tết), that also celebrate the holiday. China historically had a huge cultural influence over both countries which explains the common tradition, but in this day of political correctness (not to mention the Sino-Vietnam war in 1979 and ongoing difficult political relations between South Korea and China), it can be impolitic to refer to the holiday as “Chinese”. Korean-Australian K-pop artist Danielle Marsh found out the hard way when she asked her fans what they were doing for “Chinese” New Years. She had to apologize for the faux pas. This is all somewhat of a tempest in a teapot because its not even called Chinese New Year in China, where the holiday is referred to as “Spring Festival” (chun jie).

As noted, this is the Year of the (Fire) Horse, which is supposed to indicate resilience, progress and, of course prosperity. The zodiac is a goldmine for fortune-tellers and geomancers who are happy (for a fee) to provide advice to individuals based on their personal sign as to how to comport themselves in the Year of the Horse, Dragon, Snake, Monkey or whatever. Some animals are more propitious than others. Dragons are considered to be an elite sign, and who wants to be a Pig? However, all have their good and bad characteristics. For prospective Chinese couples, figuring out the compatibility of say, a Rat and a Rabbit, can be important not to mention how the Year of the Horse will affect that relationship.

Having been born in the Year of the Monkey, I was eager to find out what was in store for me in 2026, since horses and monkeys don’t seem to have much in common. I was relieved to learn from this zodiac website that “Monkeys enjoy romance and wealth opportunities in 2026, though career stress tests patience. With resilience and clear financial management, challenges turn into steady progress.” That is reassuring although I am not sure that my wife will be thrilled to hear of my “romance opportunities”. Wealth maybe.

Not much of this has a lot to do with copyright, but it is fun to write about traditions and festivals, and CNY is particularly fertile when it comes to images, music, food, design and other creative endeavours that make up the world of copyright. So, enjoy it. Hang up some red lanterns, put up red decals of harmonious characters, and eat some dumplings. However, if you are inclined to create some Year of the Horse images, make sure you don’t infringe the designs and mascots of the China Media Group. They have a long arm and just might come after you.

© Hugh Stephens, 2026. All Rights Reserved.  

Libraries Are Complaining About the Cost of Licensing E-Books (Again): Is There Any Justification?

An e-book reader displaying the text 'E-BOOK What book you will read today?' next to a stack of hardcover books and an open book.

Image: Shutterstock.com

Is it a coincidence that a story complaining about the cost of e-books in the budget of the Greater Victoria Public Library (GVPL) appeared in my local paper, the Times-Colonist, earlier this month only to be followed mere days later by an almost identical story that popped up in a news scan service I receive, but this time relating to the Washington, DC, Public Library? I suspect not. In the case of the GVPL, the library has to shell out $57.00 for a two-year licence for an e-book that costs $14.99 for an individual licence. Both the Canadian Library Association and its US counterpart, the American Library Association, have had this issue on their agenda for a few years now. The Canadian Urban Libraries Council, which represents more than fifty of the largest public library systems in Canada, has a Digital Content Working Group that advocates for “equitable, affordable, and sustainable access to digital content for public libraries across Canada.” Who could argue with that? But there is always a devil hiding in the detail.

The major difference between the two stories was that the GVPL was simply lamenting the budgetary impact of licensing e-books, which are in popular demand from borrowers, whereas the US story not only raised the cost issue for libraries but also referred to a local legislative initiative that would authorize market intervention by imposing restrictions on the District’s public library system, preventing it from licensing e-books from publishers that reportedly charge “excessive prices”. But what is excessive and what is reasonable when it comes to e-books, and can or should governments intervene in the market to regulate the price of a discretionary product like a book?

The DC legislation has not been adopted and if it passes, it may still never go into effect since it contains a proviso that implementation will take place only once ten other jurisdictions with a combined population of at least 50 million have enacted substantially similar laws. This is apparently to protect the DC Council from lawsuits and to try to build a national coalition to negotiate collectively with publishers. It also avoids the very real possibility that publishers could opt to not license e-books to the District of Columbia Public Library system. The bill would actually hurt libraries and their patrons by prohibiting the DC library system from entering into and renewing licensing agreements with publishers if those agreements contain terms that “restrict public access to books.” What does “restricting public access” mean? Are publishers not legally entitled to determine the terms under which their product is offered to various categories of users? Should publishers be legally required to license their product on terms arbitrarily set by government? Most licensing agreements, which are contracts, impose conditions governing how a licensed product can be used by different categories of users, such as (for a library) the number of times it can be loaned and how long the agreement lasts before it lapses and must be renewed. These terms are set by the entity offering the product, i.e. the publisher. There is no obligation on any prospective licensee to accept the terms. Products that are priced beyond what the market will accept will not succeed. The argument of the library community seems to be that libraries are somehow different, a public good, and therefore they should pay what individual consumers pay even though their use of the product is quite different.

The outline of the DC bill states that restricting public access includes “inflating” costs beyond what the public pays. Under standard licensing terms for digital books offered to the public, aka Joe and Jill Consumer, they pay less than libraries do for access to the same work. This has been the case for e-books since the early days of digital content, and it is not difficult to understand why. When a library buys a hard copy book, which it can do for the same price as the consumer (in fact, usually for less since library systems buy in volume and thus enjoy discounts), it can expect to lend that book for a limited period before it wears out and a replacement has to be purchased. There are other risks as well when hard copy works are circulated on loan, such as loss and damage. Moreover, while he majority of borrowers (in Victoria it is 55%) still generally prefer to borrow a hard copy version, there is “friction” in borrowing a physical book that limits the number of times a work is taken out. This friction is the unavoidable time and cost of physically accessing a library, such as parking or transit costs, deterrence from inclement weather or just sheer laziness. E-books, on the other hand, can be accessed with a click of a mouse. Each copy is perfect. No dog-eared or missing pages here. No borrowing “friction”.

While “friction” is an undesirable byproduct of the traditional library system, imposing constraints on borrowing physical products for some, from a commercial perspective it imposes a reasonable limit on use. The absence of “friction” where digital products are concerned not only makes things easier for the borrower, but it also reduces costs in other areas for libraries. E-books require virtually no physical storage space, and while some clients will go to a library to access an e-book, many do so remotely, thus reducing physical visitorship and the need for extended hours, etc. One of the key arguments put forward by publishers to justify the higher cost of e-book licences to libraries is that individual consumers cannot circulate digital copies to others (unless they physically lend the device on which their e-book is loaded) whereas lending to multiple users is the essential function of a library. An e-book licensed by a library for lending to multiple users is, in effect, a different product from the single-use product licensed to an individual consumer. Moreover the “perfect-every-time” perennial nature of an e-book eliminates the need for any book replacement over time. Combined with potential savings gained in other areas, the pleas of public libraries to have legislators impose restrictions on publishers have to be seen in context. That said, I am sure this will not stop library associations from trying to convince legislators to tilt negotiations in their favour.

The DC Council is modelling its legislation on a similar law passed last year in Connecticut. Like DC’s draft law, the Connecticut legislation will come into effect only when another state or states totalling seven million in population enact similar laws. For the record, Connecticut has a population of about 3.6 million people. Neighbouring New York state has a population of 20 million so if it goes the same route, the ball will start rolling. The caution of both DC and smaller jurisdictions like Connecticut is understandable because one response from publishers to legislation that restricts their ability to offer industry-standard contracts/licensing agreements could be non-availability of e-books for libraries in the affected areas. Libraries need to be careful what they wish for, since a heavy-handed approach by legislators could backfire.

Connecticut claims its legislation avoids the legal pitfalls that befell a 2022 law passed in Maryland that was blocked, on appeal from the American Association of Publishers and the Authors Guild, because the state law impinged on US federal copyright law. That state law required authors and publishers holding the rights to an e-book title to, among other things, offer unlimited copies of that title to public libraries in the state at an undetermined “reasonable price” when the title was offered to individual consumers. In effect it was tantamount to imposing a compulsory license on rightsholders and was rightly blocked by the courts. I wrote a long blog post on the e-book licensing situation at that time. You can read it here.

While the Maryland approach was overreach, the issue hasn’t gone away. Library budgets are under stress but that should not be used as an excuse to force subsidization from authors and publishers. As mentioned above, e-books never wear out and a widely circulated “frictionless” library e-book is not a direct substitute for the hard copy work that libraries used to buy–and still buy but in lesser amounts. It is a different product and to compare it to a hard copy book is to ignore commercial realities. While libraries are a public good, they still operate in the marketplace and affect the market for books, in some ways positively and in others negatively. Governments normally put their thumb on the scale of commercial negotiations only when there is market failure. This is far from the case today. The case for market intervention by government is weak, although I sympathize with the plight of acquisition librarians facing stretched budgets and trying to meet the increasing demand for e-books.

There are market limits to what publishers can charge libraries for e-books just there are market limits regarding what public libraries can pay. What is the appropriate licensing fee for an e-book configured for library use versus one sold to the individual reader? Is a multiple of three or four justified, or should it be less (or more?). An objective study would be helpful. Let’s hope there is room for negotiation that will fairly compensate authors and publishers while allowing public libraries to meet the growing demand of their clients for more digital works.

© Hugh Stephens 2026. All Rights Reserved

Canadians (and Anyone Else Outside the US): Beware the Annual Public Domain Hype

A black and white cartoon character resembling a mouse, wearing a hat and shorts, happily steering a ship's wheel.

Image: Public Domain

This is the time of year (the days and weeks after January 1) when, on a quiet news day, lazy journalists in Canada used to pick up and amplify a US based story about such and such a work falling out of copyright and into the public domain and write a story about it, complete with a grabbing headline, often to the effect that Mickey Mouse or Batman or The Great Gatsby or whoever is now “liberated from the chains of copyright”. The CBC did exactly that in 2024, producing a radio special on Steamboat Willie entering the public domain, completely ignoring the fact that all works created by Walt Disney and Ub Iwerks (which include the earliest editions of Steamboat) had already entered the public domain in Canada two years earlier, on January 1, 2022. Iwerks was co-author and joint rightsholder along with Disney for this work and as the co-author who lived the longest (he died in 1971; Disney in 1966) the term of copyright protection in Canada was based on the year he died plus, at the time, an additional 50 years. Thus, January 1, 2022 in Canada. As I wrote a couple of years ago (Canada is not the United States when it comes to Copyright: The Cases of Anne of Green Gables and Steamboat Willie (or Down the Copyright Rabbithole, Twice), sometimes works still under copyright protection in Canada are in the public domain in the US, and sometimes it is the reverse. Don’t assume. This law firm’s blog post (Gowlings) provides a good overview of what to watch out for.

The mistake of making the assumption that what happens in the US is automatically applicable to Canada is the unfortunate reality of being a cultural minnow living cheek by jowl with a content creation whale. This year I didn’t notice any of the reflected US public domain stories in the Canadian media, perhaps because the penny has finally dropped that public domain day in Canada will be a non-event until the year 2043 (no need for any hype), owing to the extension of Canada’s term of copyright protection from the life of the author plus 50 years to life plus 70 (for most works). Any works that had fallen into the public domain under Canada’s previous “life plus 50” term did not receive the additional term of protection but any works still copyright protected in Canada at the end of 2022 got another twenty years coverage before entering the public domain. Had Ub Iwerks died in 1972 instead of a year earlier, Steamboat Willie would have enjoyed another two decades of protection in Canada beyond what applies in the US, although it is doubtful whether the Walt Disney Company would have tried to enforce its rights under Canadian law.

Not only has Canada harmonized its current term of copyright protection with the US, EU, UK, and a number of other countries, (although there will always be discrepancies between the terms of protection afforded works in Canada versus those in the US for many years to come owing to the historical peculiarities of how the term of protection is calculated under US copyright law), there have also been fewer quiet news days in early 2026 thanks to the daily Donald Trump Reality Show. Moreover, there has been a surge in Canadian nationalism (and thus a greater awareness of cultural differences) as a result of the Donald’s 51st state taunts. (Prime Minister Mark Carney, an internationally recognized banker and financial executive seemed initially to enjoy Trump’s respect but since his Davos speech calling out the realities of the new world order, Carney, like his predecessor Justin Trudeau, has been demoted to the title of “Governor Carney” on Truth Social, apparently the current official channel for announcements of US government policy). So, journalists, if you want to write about what makes Canada different from the US, in addition to measuring distance in kilometers and saying “sorry” every time someone bumps into you, you could note that US and Canadian copyright laws are different. Similar in intent but not identical. For example, the US fair use doctrine with its unpredictable focus on transformative use does not apply in Canada, the US requirement for formal registration of copyright in order to bring legal action does not apply in Canada and, in particular, the complex (because of its convoluted history) US determination of when a particular work falls into the public domain does not apply in Canada.

This year, as it does every year, the Center for the Study of the Public Domain at Duke University’s Law School, published its Public Domain Day blog, highlighting all the works that fell into the US public domain on January 1, 2026. These include such well known works or characters as Agatha Christie’s The Murder at the Vicarage (protected in Canada until January 1, 2043) , Somerset Maugham’s Cakes and Ale (in the public domain in Canada since 2016), Blondie and Dagwood, nine additional Mickey Mouse cartoons, Dutch artist Piet Mondrian’s Composition No. II/Composition in Red, Blue, and Yellow, four songs by Ira and George Gershwin, and so on. Much is made of the fact that these works will be free to anyone to use, remix, copy and exploit but it’s not as if these works have been locked away in a closet, although their unlicensed use has been protected by copyright law. Copyright protection does not stop anyone from creating new works and while there may be limitations on hijacking Inspector Poirot there is nothing stopping aspiring writers from creating detective novels. There is another element worth noting as well. Particularly when it comes to copyrighted characters and cartoons, their later iterations may still be copyright protected in the US (because of the US baseline being date of publication plus a set number of years) not to mention protection offered by registered trademarks. Sometimes estates try to hang on to copyright protection at all costs, as appears to be happening in the US with Mondrian’s work. (It has been in the public domain in Canada since 1995, 50 years after Mondrian’s passing).

Once a work has entered the public domain it can be used in derivative works without permission. Has this resulted in a slate of new and creative works being produced for the benefit of mankind? Hardly. The usual result is for a brief surge of “edgy” productions incorporating a new public domain work, such as Steamboat Willie doing or saying things that Dear Old Uncle Walt (Disney) would never have countenanced. As I noted a couple of years ago, the “liberation” of copyright protected works has led to such triumphs as The Gay Gatsby, The Great Gatsby Undead (Zombie Edition) and the film Winnie the Pooh: Blood and Honey. So much for the public domain unleashing the juices of creativity.

For better or worse, copyright is not a perpetual property right. I support reasonable limitations on copyright protection including making a provision for works to enter the public domain after their prime exploitability has passed. This will vary by work with some works remaining evergreen, encouraging new investment into derivative works, updates, new editions, as well as providing ongoing returns to the estates of authors. However, at times there are situations where a work is long out of print and the rights-holder cannot be located, blocking a reprint. These situations can be dealt with through specific exceptions, much as fair use and fair dealing allow for specified unauthorized uses that do not damage the rights of the author.

To come back to the narrative that the public domain liberates content from the “shackles of copyright”, I contend this is nonsense. Beware the hype. And if you reside outside the US, don’t believe everything you read in the media regarding what works are in the public domain. You might be pleasantly surprised to find that a work has been in the public domain in your country for years (while Conan Doyle’s later works only entered the US public domain in 2023, they have been in the public domain in Canada since 1981). On the other hand, you might find the work you thought was free for adaptation based on what Duke University’s Center for the Study of the Public Domain says is way off base and it is still protected by copyright in your country of residence. Beware the hype and do your homework.

© Hugh Stephens, 2026. All Rights Reserved.

India’s Proposed Compulsory Licensing Scheme for AI Training: It Could be the Worst of All Worlds.

A wooden gavel striking a golden copyright symbol with the text 'COMPULSORY LICENSING' in bold.

Used with permission

In early December the Indian government through the Department for Promotion of Industry and Internal Trade (DPIIT), launched a public consultation on its proposal for a “One Nation, One Licence, One Payment” regime to govern AI training on copyrighted content. The comment period closes early next month. The stated intent is to establish a framework to allow AI developers to access proprietary content for AI algorithm training, without rightsholder authorization, while ostensibly taking into account the concerns and economic interests of those same rightsholders. The proposal from a semi-official committee established by DPIIT is based on a compulsory licence regime covering all content, past, present and future, with no opt outs for content owners. Given the unrepresentative nature of the committee, which failed to include rightsholders from many creative sectors, it is not surprising it has managed to come up with a solution that pleases absolutely no-one, not rightsholders nor the AI industry. Moreover, it is probably unworkable and could rightly be described as the “worst of all worlds”. How did we end up here?

It is widely accepted that to further refine and develop AI, more data is constantly required. Quality data is important. The better the data, the better the product. Many AI developers have, without authorization, already helped themselves to vast amounts of copyright protected material either through accessing pirate databases or by simply hoovering up publicly accessible (but nonetheless copyright protected) content on the internet. The result has been a series of lawsuits launched by rightsholders, primarily in the US but also in India, the UK and Canada. In the US the parameters of the fair use doctrine are being tested, with mixed results. There have been some settlements, notably the Bartz v Anthropic case in which AI developer Anthropic agreed to pay a group of authors $1.5 billion for having accessed and reproduced their works through pirate websites (and without authorization), as well as a large number of voluntary licensing agreements between corporate rightsholders such as media outlets, publishers and music labels, and AI companies. Clearly, legal leverage is needed to convince AI developers to negotiate with rightsholders (no one is volunteering, that’s for sure). In the US this is backed up by a statutory damages’ regime where the risk of being hit with large statutory damages per infraction is a strong incentive for the AI industry to reach licensing deals. Unfortunately, many countries do not have a statutory damages provision in their copyright law, and India is one of them.

Ironically, outside the US where the fair use case-by-case legal doctrine does not exist, AI developers are arguably in even greater legal jeopardy. As a result, they have pushed for a wide statutory text and data mining (TDM) exception to be introduced into national copyright laws. The AI industry is doing this in India, although there is strong opposition to introducing a TDM escape hatch. When a TDM exception applies, rightsholders are paid nothing. The DPIIT “solution” proposes to address the non-payment issue–but is going about it in precisely the wrong way. Appropriating the IP of all rightsholders by imposing a draconian compulsory license regime penalizes rather than rewards rightsholders and imposes a lowest-common-denominator value on all content, not distinguishing between premium and pedestrian content while taking away from rightsholders the inherent right to determine how and where their content is used.

The compulsory licence regime proposed by DPIIT would be administered by a new non-profit body, a Collective Management Organization (CMO) to be established by statute. This would create another layer of bureaucracy harking back to the days of the “licence raj”. A government appointed committee would set rates in conjunction with the new non-profit. Royalties would be applied retroactively as well as prospectively. Existing voluntary licensing agreements between content providers and AI companies would have to be terminated and future licence agreements prohibited. Rightsholders who do not want to licence their content could not opt-out. This is overreach at its worst.

The tech industry represented by NASSCOM, the National Association of Software and Service Companies, that also includes Google and Microsoft, vehemently opposes the One Nation, One Licence, One Payment proposal, arguing instead for a TDM exception. It also argues that rightsholders who wish to opt out should be able to do so, thus avoiding AI companies having to pay royalties for content it does not want or has already licensed. It also doesn’t want the precedent of compulsory payments, as India would be the first country globally to institute such a regime. NASSCOM claims that a compulsory licence regime would slow innovation, the card always played by the AI industry when the issue of protecting rightsholders is discussed. However, a TDM exception is not currently on offer in India. It is a “solution” that is facing increasing pushback in many countries. Australia has just rejected the concept, and other jurisdictions are examining it critically.  Where a TDM exception does exist, as in the UK and EU, its use is constrained and subject to several conditions, such as in Britain where it is limited to non-commercial research.

Not only is the tech industry strongly opposed to the compulsory licence proposal, so are rightsholders such as the broadcasting industry and Bollywood. Not only would a compulsory licence be extremely difficult to implement given the nature of CMOs which are generally highly inefficient and administratively cost heavy– not to mention that the Committee’s working paper proposes two layers of CMO (thus double handling and processing)– but the draconian and sweeping nature of the compulsory licence is of great concern. Rightsholders are given no ability to opt out or to refuse to have their content conscripted. In fact, the proposal includes a provision granting AI developers access to content as a “matter of right”. What happened to the fundamental right of an author to determine how, when and even if their content is to be reproduced? Compulsory licences are extraordinarily blunt instruments and do not work when sophisticated content like audio-visual and music products are involved. There are many elements to licensing, including contractual issues that go beyond price that are carefully negotiated and carry with them specific obligations and privileges. A compulsory licence is a “one size fits all” solution. It strips away the rights of content owners and is, in effect, a form of “compensated expropriation”. And the compensation is minimal.

Having pleased no-one with its proposal, it remains to be seen where DPIIT will go next once all comments are received and evaluated. A follow-up proposal is expected that will deal with outputs, just as the initial one did with inputs. India, like many countries, wants to participate in the global development of AI. Its rich local-language content is a strategic asset. Imposing a compulsory licence would stifle the creativity that drives this cultural comparative advantage. In the absence of a market failure there is no rationale for resorting to the sledgehammer of a compulsory licence for all content. The preferred solution for rightsholders, voluntary licensing, is also becoming a preferred solution for AI developers as the legal ground on which they are operating in accessing content without authorization is looking increasingly shaky. Voluntary licensing is growing globally as AI developers absorb this reality. If wide TDM exceptions are off the table, AI developers will have no recourse but to negotiate licence agreements. (A statutory damages regime would provide even greater incentive to do so). Bringing in a wide TDM exception or worse, introducing a blunt and highly bureaucratic compulsory licence regime, is a sure way to kill the growing voluntary licensing market.

DPIIT’s next steps will be crucial. If the goal is to create the conditions for a “made in India” AI industry while nurturing and protecting India’s valuable cultural assets there is no better solution than to create the conditions for the growth of a voluntary licensing market. Strong cultural industries and robust AI development go hand-in-hand. This means dispensing with forced, bureaucratic solutions like the proposed compulsory licensing regime while holding firm on rejecting a TDM loophole that would allow AI companies to plunder India’s cultural richness without any compensation to creators and rightsholders. Let’s hope India gets it right.

© Hugh Stephens, 2026.  All Rights Reserved

The Online Streaming Act or Dairy Supply Management: Which one should Canada Surrender to the US in CUSMA Trade Negotiations? Or is it a Question of Putting Some Water into the Wine of Both?

A person pouring water from a ceramic jug into a large clay pot.

Image: Shutterstock

Should Canada give up the Online Streaming Act (OSA) in forthcoming CUSMA negotiations in order to preserve dairy supply management, as a former Vice Chair of the CRTC, Peter Menzies, suggested in a Globe and Mail oped earlier this month? Perhaps he was just being deliberately provocative although the question hits one of the raw nerves of Canadian politics. The cultural community– particularly in Quebec–would be enraged if this happened. But then if supply management is watered down to allow more imports from the US, especially in dairy, the dairy farmers–particularly in Quebec–will be equally enraged. Which group has the greater political clout? In both cases, Quebec-based interest groups have a card to play denied to others in Canada. It is called the Bloc Quebecois, and if enough support bleeds from the Liberals to the Bloc, that could just open the way to the Conservatives to form the national government they so desperately crave. The cultural mavens in Toronto have little choice; either support the Liberals or face a worse fate when those Conservative cowboys from Alberta take the reins of power.

The Quebec cultural community which insists that measures are needed to ensure that foreign streamers both contribute financially to support Canadian content (Cancon) and ensure that Cancon (when expressed in French) is “discoverable”, has yet another card up its sleeves. It is called Bill 109, Quebec legislation (that is probably ultra vires since broadcasting clearly falls within federal jurisdiction) that purports to regulate the discoverability of French-language cultural content in the digital environment. If Canada gives way on the Online Streaming Act in CUSMA negotiations, watch Quebec fill the void. So where does all this leave the Carney government? Between a rock and a hard place.

It is true, as Menzies has pointed out, that the CRTC has been very slow, plodding even, in dealing with implementation of the OSA. It may even be overwhelmed, with inadequate staff as he suggests. The fact that implementation is still a work in progress makes it easier for the US government to bring pressure to stop or at least to modify rollout of the legislation, whereas other objectives mentioned in recent USTR hearings, such as changes to the Bank Act to benefit US financial institutions or measures to terminate supply management would require significant legislative and regulatory change to undo measures that have been in place for decades. Best to nip it in the bud, or to kill it in the egg, as they say in Quebec.  

Canada’s planned introduction of a Digital Services Tax (DST) is a prime example of a nipped-in-the-bud policy. A DST deals with tax avoidance measures implemented by large digital multinationals by taxing their in-country revenues rather than their manipulated profits. Some countries, such as the UK, France, Spain, Italy etc had already implemented a DST before Trump’s return to office and seem to have got away with it, even though Google, Microsoft, Amazon, META and others of that ilk have the Trump Administration’s ear. Canada intended to implement a DST several years ago but dithered and dragged its feet, finally passing legislation in 2024 that would have brought a DST into effect on June 30, 2025, backdated to 2022 when the law should have been put into effect in the first place. Unfortunately for Canada, the implementation date fell right in the middle of the Trump tariff war and Canadian efforts to negotiate some relief. But rather than postponing implementation yet again–and using the possibility of a future DST as negotiating collateral–Canada “bravely” announced it was going ahead with implementation (regardless of the consequences). Until it wasn’t. Trump tweeted that he was cancelling trade negotiations with Canada because of the DST and voilà, over a weekend, the DST was cancelled (on June 29, 2025).

Trade talks resumed and actually appeared to be making some progress with respect to sectoral tariffs such as steel until the next excuse Trump found to end them. This time it was over Ontario’s World Series free trade ads that ran on US television, using Ronald Reagan’s words from a 1980s era speech praising free trade and condemning protectionist tariffs. The content of those ads may have been accurate, but the result was one of Canada’s more prominent “own goal” moments. While Doug Ford may have derived some brief satisfaction from getting under Donald Trump’s skin, the steelworkers of Sault Ste. Marie, who might have benefited from a rumoured sectoral deal on steel, have been paying the price. I think this fiasco helps explain the public anger of US Ambassador to Canada Pete Hoekstra (who surely wins the 2025 “Bull in a China shop” award) who crudely vented his frustration that a deal so close to fruition got blown out of the water through Premier Doug’s ill-considered initiative.

But what about supply management? Canada should be taking a long, hard look at the wisdom of continuing to defend this 1970s policy that almost every other country has since abandoned. Instead, it should use the CUSMA negotiations as the reason to ditch a monopoly that protects a few chosen producers of supply managed commodities at the expense of consumers and the rest of the economy. Unfortunately, that won’t happen because of Canadian political realities but there is still scope for some wiggle room. In recent years, Canada has been forced as part of its trade negotiations to open slivers of the dairy market to EU countries, CPTPP trading partners, and to the US through the CUSMA. The dairy industry screamed blue murder but was paid off for having to face a bit more competition. As part of liberalizing as little as possible, Canada routinely plays games with its commitments by awarding import quotas to the same domestic dairy industry with which exporters of dairy products to Canada are competing. Some additional foreign cheese and dairy products become available to consumers but in effect the fox is in charge of deciding which chickens get let in, and at what price. Even though this policy is an albatross around Canada’s neck, such is the power of the dairy industry (which is reputed to control the outcome of no less than eight ridings in Quebec) that all political parties support keeping supply management off the table in all trade negotiations, and passed legislation to this effect. In a political environment where the government is one vote short of a majority, risking the ire of Quebec dairy farmers is a risky business.

Does that mean that supply management is completely off the table and instead there should be another sacrificial lamb, such as domestic broadcasting and cultural policy, as Peter Menzies has suggested? This is a doubtful proposition. Despite all the posturing about supply management being “off the table”, there will almost certainly be some concessions to the US, even if it is only in the way the tariff free import quotas are managed. The Carney government will claim it is defending supply management, while making some tweaks to the system. It can do the same for cultural industries. Defend the essence but find compromises that US industry can live with.

Like supply management, the Online Streaming Act also has wiggle room in its implementation. Already we have seen the CRTC announce changes to Cancon definitions that introduce greater flexibility and go some way toward meeting the concerns of the (largely US-based) content streamers, while preserving elements of protection for Canadian production. (Canadian makeup and hair design artists will be happy as use of their services adds an element of “Canadianness” to a production that could be useful in meeting the Cancon definition. This just goes to show that you can never discount the influence of a specific lobby). While the US has laid out some maximum wish-list objectives, including withdrawal of the Online Streaming Act (as well as the Online News Act), there are domestic political realities in Canada that will constrain Canadian trade negotiators from sacrificing the cultural sector to gain other objectives, just as there are with regard to supply management. The US may hold a big stick in the negotiations, but Canada is not without cards to play. It just has to be careful how to play them, and when mobilizing support inside the US to do so in a way that does not offend the touchy amour-propre of Donald Trump.

The end result for Canada will not be water or wine, but rather how much water to allow into the wine. Some dilution will be necessary but at the end of the day, for domestic political reasons (particularly in Quebec), the liquid in the glass still will still have to resemble wine more than water. This applies equally to cultural industries and broadcasting as well as to supply management. It is far from an either/or situation.

© Hugh Stephens, 2026. All Rights Reserved.

Vietnam’s New IP Law: The General Direction Makes Sense but Regulatory Details will be Key

Three musicians perform on stage at night, surrounded by colorful decorations and ambient lights.

Image: Shutterstock

On December 10, Vietnam’s National Assembly adopted an amended IP (intellectual property) law designed to update the legislation for the digital age, and especially to address issues involving the intersection of AI and IP. The next phase will be drafting of the regulations necessary to bring the law into effect by April 1, 2026. The law does several things; it will explicitly recognize IP as an economic asset allowing it to be used for financial and accounting purposes, and as collateral for loans; it clarifies that works autonomously generated by AI without substantive human creative input are not eligible for IP protection; and it allows the use of lawfully published works and data for AI research, testing, and training, provided that such use does not unreasonably prejudice the legitimate interests of rights holders and the resulting outputs do not infringe copyright. While all this sounds good on the surface, there are potential hidden problems with the AI research, testing and training provisions. In drafting the implementing regulations, Vietnam needs to be careful to not undermine its vibrant creative industries that depend on copyright protection to thrive.

The translated wording of the AI provision (Clause 5, Article 7) is rendered in English as follows:

“Organizations and individuals may use text and data related to intellectual property rights that have been lawfully published and made publicly accessible for purposes of scientific research, experimentation, training of artificial intelligence systems, provided that such use does not unreasonably affect the legitimate rights and interests of the author or the holder of intellectual property rights as stipulated by this Law.

For text and data that are subject to copyright and related rights protection, the use of such text and data under this Clause must also comply with the Government’s regulations.”

At first glance, this looks like another “standard” Text and Data Mining (TDM) exception, a carve out from copyright protection being pushed by the AI industry in a number of Asian countries, as I recently wrote about here. In that blog post, I noted that lawmakers and regulators in Asia are grappling with a common problem; how to incentivize the development of responsible AI while continuing to encourage and promote all-important content industries. Vietnam is facing the same issue. Throwing the cultural sector under the bus in the hopes of attracting some ephemeral hi-tech AI jobs is a false bargain. Strong cultural industries enable the development of strong content licensing markets for AI development, enabling a virtuous circle of further creativity. A strong cultural sector and strong, sustainable digital industries, especially those powered by AI, go hand-in-hand. To this end, Vietnam has put in some important guardrails, such as requiring that any copyright protected works used for AI training (1) be lawfully accessed and (2) be made publicly accessible for the purposes of training of artificial intelligence systems (among other uses). Additionally, language has been adopted from the Berne Convention “three step test” that requires the use to “not unreasonably affect the legitimate rights and interests of the author”. So far so good, but these features may not be adequate to protect the interests of Vietnam’s creative industries unless made explicit. This is where careful drafting of the regulations comes into play.

First, on lawful access, this is positive in that it rules out the use of pirated content to train AI systems (if enforced) and should make it illegal to bypass a paywall (digital lock, or technological protection method, TPM) to access content. However, this provision provides only relatively thin protection since lawful access can be obtained by purchasing the cheapest or lowest minimal access possible and then using that access to justify commercial exploitation. For example, an AI company could purchase exactly one copy of each book that it wants to ingest, or one copy of a sound or audio-visual recording.

With respect to the requirement that content be made “publicly accessible” before it can be used for training, this implies that any content not made publicly accessible should be off limits to AI developers. Therefore, disclaimers or terms of service specifying what uses are acceptable must be respected along with technical indicators, such as robots.txt protocols, that mark content that is not to be copied. Again, regulation will need to specifically deal with these points to avoid any ambiguity. On the basis of the “trust but verify” principle, AI developers should be subject to maximum transparency requirements and must be required to document all protected content used for training.

To give effect to the language taken from the Berne Convention requiring the use to not unreasonably affect the legitimate rights and interests of the author, this could also be addressed by regulation to make the meaning precise. For example, AI outputs that substitute for the originals on which they were trained clearly prejudice the rights and interests of the rights-holder. It is not enough that an AI produced output does not directly mimic the original; if it displaces it in the market, it is also damaging the economic interests of the author.

Finally, the law indicates that the use of text and data subject to copyright “must also comply with the Government’s regulations.” It is far from clear what this means. The use of text and data already must comply with the terms of the legislation as described above. This phrase would hardly seem necessary unless it is intended to provide some sort of general override that would invalidate the guardrails embedded in the law. This should be clarified in regulation or dropped entirely.

Vietnam has a lively and thriving cultural sector that is a key manifestation of its cultural expression and sovereignty. The Vietnam Creator’s Coalition has estimated that the arts, entertainment and recreation sector employed over 281,000 people and contributed VND 55,694 billion (USD $2.12 billion) to the Vietnamese economy. The cornerstone of this economic strength and growth is Vietnam’s copyright framework. The National Target Program for Cultural Development has set a target for the cultural industries to contribute 7 percent of the country’s GDP by 2030. If copyright protection is inadvertently gutted by poor application of the new law, those targets will be unattainable and the sector, an important instrument of national expression, will suffer.

The other element of the content protection environment in Vietnam that continuously undermines both domestic and international rightsholders is piracy. Vietnam is a known centre of audiovisual piracy, hosting numerous sites that operate more or less openly. It has been called out by USTR’s Special 301 report on many occasions, most recently again in 2025. Initially the worst offender was a pirate operation going by the name of 123Movies. More recently it has been Phimmoi and FMovies. Enforcement is weak and when a pirate site is shut down, usually after prolonged effort by rightsholders, it is not long before it is back in business. It is not just international rightsholders who suffer. The mass copying of the film “Red Rain” (Mưa Đỏ), the 2025 Vietnamese epic historical war drama adapted from a novel about the Second Battle of Quảng Trị in 1972, a fierce and protracted battle in the Vietnam War, is Exhibit A for the damage wrought by domestic piracy, as outlined by the British legal firm Rouse. The inability or unwillingness of the Vietnamese authorities to take effective action against openly operating pirate sites is a blot on Vietnam’s IP record and undermines the credibility of the stated objectives of the new IP law.

From the overall thrust of the law, it seems that Vietnam’s lawmakers want to protect the country’s valuable cultural assets and creative energy while providing scope for AI developers to have access to protected content under clearly defined conditions that respect the legitimate rights of creators. The regulations that will be drafted over the next few months need to make this explicit and apparent or else the intent of the law could be subverted. Robust action is also required to end the free ride being afforded to content pirates. It is often said that the proof of the pudding lies in the eating. In this case, the proof of the legislation lies in the drafting of sound regulations to implement the new IP law effectively, while taking meaningful action to curb the scourge of AV piracy.

© Hugh Stephens, 2026. All Rights Reserved.