State Sanctioned Piracy: Another Weapon in Russia’s Arsenal


As the war in Ukraine enters its second year, many things in Ukraine and in its neighbouring countries– Belarus and Russia to the north and east, Poland, Slovakia, Hungary, Romania and Moldova to the west and south—have changed. While the Ukrainian people have clearly suffered the worst direct consequences of the war, none of the people living in countries adjacent to Ukraine have been left untouched. Its neighbours to the west have mainly felt the impact of the influx of refugees, while “normal life” for people in Russia and Belarus has also changed as the sanctions imposed by western governments have impacted various aspects of daily life.

If truth is the first casualty of war, a comment widely attributed to early 20th century US Senator Hiram Johnson, although versions of the saying are claimed to go as far back as the Greek playwright Aeschylus in the 5th century BC, then the next casualties are usually those ordinary “taken for granted” things that constitute the normal rhythms of life—wide availability of goods, reliable sources of power and other utilities, organized sports, cultural activities and entertainment. That is quite apart from the really serious consequences of war, like safety and security, injury or worse, that often follow. It may seem trivial to look at the consequences of war upon culture and entertainment, but “spiritual sustenance” is an important part of a nation’s morale and when normal life patterns are disrupted, people turn to familiar things for comfort and sometimes to escape reality.  A current case study is Russia’s invasion of Ukraine. Among other things, this has affected entertainment choices and availability in Russia, as well as having a major impact on copyright industries, and other IP stakeholders. (By contrast, in Ukraine people are just struggling to survive). But in Russia, and now in Belarus, in addition to all the other war-related measures they are taking, these governments have weaponized copyright piracy.

Back in May last year, just weeks after Russia’s invasion of Ukraine, I wrote a couple of blog posts focusing on the cultural and content aspects of the conflict, noting that Russia was attempting to both deny and eradicate any expression of Ukrainian culture. (Russia’s Invasion of Ukraine: It’s Also a Content and Culture War; Ukraine: Protecting its Culture and its Future). Ukrainian art, music and literature are anathema to Vladimir Putin because they give the lie to the “justification” for the invasion advanced by the Russians; the false narrative that Ukraine is and always has been an integral part of Russia. There are of course common historical antecedents and a close relationship between the Russian and Ukrainian languages (some prominent Ukrainian writers like Andrey Kurkov, Ukraine’s most famous and successful living writer, in fact write in Russian), but Russia’s attempts to destroy Ukrainian culture has just one purpose; to deny Ukraine’s legitimacy as a people and as an independent nation. Culture and entertainment thus become very much caught up in the fabric of warfare and propaganda.

It is not clear to what extent the war truly enjoys support in Russia. Many have made their opposition clear by leaving or trying to leave Russia. Others have protested, and have paid the price for doing so. Still others are no doubt just keeping their heads down. Inside Russia, western sanctions have brought about some changes to lifestyles (although recent reports indicate sanctions have been only partly successful); US streaming services have shut down and supply of content to broadcasters and movie theatres has been interrupted. Microsoft, Apple, Dell, Samsung, Adobe, Cisco, IBM and Intel, have stopped sales to Russia. Certain other western products and brands are no longer available. As part of its response, Russia has turned a blind eye to, indeed has tacitly encouraged, copyright piracy for both software and audio-visual content. In August of last year a bill was introduced in the Duma to introduce compulsory licenses for content and other copyrightable objects not available in Russia because of sanctions. It applied to all content subject to copyright protection, such as theatrical and TV content, music, books, software, databases, videos, and artwork. In December a bill to “legalize piracy” of software was under consideration by the Ministry of Digital Development. In a sense, this is a largely empty threat since the software piracy rate in Russia has remained stubbornly high over many years. These legislative actions are apparently still pending.

On the movie front, where until the invasion of the Ukraine, about 7/10 movies screened in Russia were Hollywood films, Russian cinema owners have resorted to showing downloaded, unauthorized and unlicensed films to “private showings” in order to stay in business. What the impact will be of the unravelling of the already weak IP regime in Russia after the war is over remains to be seen.

The idea of suspending the enforcement of copyright law when it comes to nationals or companies from “unfriendly” countries, i.e. those that have imposed sanctions (Russia’s list includes the US, UK, members of the EU, Norway, Switzerland, Canada, Japan, South Korea, and Australia among others) has been picked up by Russia’s acolyte, Belarus. As reported by TorrentFreak;

“Belarusian dictator Alexander Lukashenko has signed a new law that legalizes piracy of movies, music, TV shows and software owned by rightsholders from ‘unfriendly countries’. The law also allows goods protected by intellectual property law to be imported from any country without obtaining permission from rightsholders.”

Lukashenko is the first and only president that Belarus has had and has been in power almost since the day that it emerged from the ruins of the Soviet Union. He is Putin’s closest ally among the republics that made up the former USSR. So far, he has managed to stay out of the war against Ukraine, although Russia has launched rocket attacks from Belarus. Lukashenko himself and the war are unpopular in Belarus and Lukashenko has a strong stake in survival, thus his caution, but he also counts on Putin for support if needed. Until now, he has kept his powder dry. However, the new Belarus copyright exception law mimics similar legislative efforts underway in Russia. (Western sanctions against Russia have also generally been applied to Belarus.)

The new law does not completely remove the obligation to license copyrighted content but requires users of unlicensed copyright-protected content to instead pay into bank accounts operated by the National Patent Authority, which is in turn authorized to collect a “management fee”. The actual amount of payment will be determined not by rights-holders but by the Belarusian Parliament. Rights-holders will have up to three years to claim payment. But the National Patent Authority’s bank is owned by the Government of Belarus and is under sanctions! Don’t expect western rights-holders to be lining up to collect license fees owed. It is worth noting that all these measures are a violation of commitments that Belarus has made under its WIPO commitments. (Belarus is not a member of the WTO, thus not a signatory to the TRIPS Agreement, but Russia is, and would be in contravention of both WTO and WIPO commitments if it brings in similar measures).

The loss of licensing fees in Belarus, or in Russia for that matter, by western rights-holders may seem like small potatoes compared to the suffering of the people of Ukraine. But copyright protection, and the content that it delivers, is one more casualty of war, inflicted not only on western rights-holders but also on the everyday folk who live in Minsk, or Moscow or elsewhere in these two countries who find themselves on the wrong side of a very nasty, morally unjustified war.

Hopefully one day in the not too distant future, this war will end—with a Russian withdrawal. The people of Ukraine will be able to live in peace, not in fear. They will be able to exercise their rightful cultural heritage as well as direct their own future. Hopefully also the people of Russia and Belarus will accept this outcome, and once again, the bonds of culture and entertainment, through music, film, television and other content, will become bridges to build understanding and mutual acceptance. Copyright piracy won’t go away, in Russia, Belarus (or indeed in Ukraine or elsewhere) but in a postwar world one assumes it will no longer be aided and abetted by the state, as is currently the case in Russia and Belarus today.

© Hugh Stephens, 2023. All Rights Reserved

Fair Dealing, Fair Use…and Fair Play

Credit: author

Yes folks, it is Fair Use/Fair Dealing Week again (Feb 20-24, 2023). As I wrote last year at this time, the activity is promoted by the Association of Research Libraries in the US, with separate components labelled Fair Dealing Week in Canada and the UK. The Canadian version is organized by the Canadian Association of Research Libraries; in the UK the lead last year was taken by Institute of Advanced Legal Studies at the University of London. We will hear a lot about the benefits of exceptions and limitations to copyright, how permissionless use under specific circumstances promotes learning, creativity, free speech, public discourse. etc. The focus will be on the users of copyrighted materials rather than on the creators of works. As a user and consumer of copyrighted materials, I can identify with these views, as I wrote on this blog a few years ago. (“Why this Copyright Blogger likes Fair Use and Fair Dealing”.)

Copyright creators are amongst the most prolific “users” of copyrighted materials, but I like to think that as creators we are also mindful of the rules surrounding appropriate use. We can, as users, quote from and link to copyrighted material, draw inspiration from it, parody it, even reproduce limited amounts of it for private study, research or educational purposes. That is all well and good and epitomizes the basic balance that has traditionally existed between the protection afforded authors to control the use of their works, and the ability of users to access those works.

What fair use and fair dealing do not justify is the wholesale appropriation of copyrighted content through industrial-scale unauthorized copying that destroys any market for the author’s works. Unfortunately, that is what is currently happening in both Canada and the US–through broad-based uncompensated educational copying in Canada and through infringing digital copying by libraries (and “pretend libraries”, like the Internet Archive) in the US, and to some extent in Canada as well.

In Canada, the “user’s right” referred to in the Supreme Court of Canada’s 2004 decision (CCH Canadian Ltd. v. Law Society of Upper Canada) has been interpreted so broadly in recent years that an institution, such as a university, can claim to exercise the student’s “user’s right” by mass producing learning materials copied willy-nilly and without payment or authorization from educational texts, and can then sell the copied course-packs to students through the university bookstore! This is not a case of an elementary school teacher photocopying a couple of pages from a textbook that is in short supply in order to provide their class with learning materials—which was the original justification for the practice of a teacher exercising the user right on behalf of students. (Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright). Even this non-digital example has led to situations where a school has ordered and paid for exactly one copy of a textbook, with teachers then scanning or photocopying to reproduce multiple copies for students. Is that fair to authors and educational publishers? And, in the long run, to students? Along with fair dealing we also need an element of fair play.

The argument often advanced is that “cash-strapped” educational institutions, and “suffering students” who are having difficulty in making ends meet (owing in large part to hefty hikes in admission fees) are being expected to pay “wealthy publishers” for access to learning materials. I heard these arguments recently on a self-serving podcast from the Canadian Teachers’ Federation. If anyone is “cash-strapped” it is authors, and the current situation is making the situation worse. In a 2018 report, the Writers’ Union of Canada reported that;

“Taking inflation into account, writers are making 78% less than they were making in 1998. In fact, writers are making significantly less from their writing than they did just three years ago: $9,380 in 2017 vs. $12,879 in 2014. That’s a 27% drop over a short period — the same period that has seen a massive increase in uncompensated educational copying.”

The situation is undoubtedly worse today. As for all those “wealthy publishers”, the educational publishing market in Canada has been shrinking, with several publishers either ceasing to publish for the educational sector or closing up shop entirely. Fewer culturally specific educational materials for the Canadian market are now being published as there is no incentive to do so. The fix is relatively straightforward and narrowly targeted. It is to ensure that students can continue to exercise their educational fair dealing rights but to limit that right for educational institutions to situations where no licensed alternative is available. This approach works well in other countries, including the United Kingdom and Ireland. This will stop the wholesale plundering of copyright-protected content by institutions in the name of exercising their students’ user’s rights.

With regard to “cash-strapped” educational institutions, you should know that the cost per student at the K-12 level of a licence from Access Copyright was $2.41 per student per year in 2016 (I would say about the price of a cup of coffee, except that it is pretty rare these days to get a cup of coffee for that amount). Despite this, most Ministries of Education not only refuse to pay the tariff but have sued the copyright collective, Access Copyright, for the amounts that they had paid back in 2010-12. It is true that some School Boards and universities are “cash-strapped”, but does that stop them from paying their suppliers, their teachers, from running school buses, repairing school buildings. Of course not. So why should paying for the educational inputs they use be any different? Put another way, why should cash-strapped authors be subsidizing educational authorities in various jurisdictions across the country? That is not fair play.

In the US (echoed in Canada) another egregious example of unfair play through unauthorized copying is taking place under the guise of fair use. This is the invented theory of “Controlled Digital Lending” (CDL) actively promoted by the Association of Research Libraries in the US and supported by its Canadian equivalent, the Canadian Association of Research Libraries as well as the Canadian Federation of Library Associations. CDL’s proponents claim that they should be able to make a digital copy of a physical work they hold, and then lend the digital copy, keeping the original work in its archive. But there is no basis in law for this theory.

As I noted in a recent blog post on this topic (“Controlled Digital Lending: Could Canadian Universities Find Themselves Out on a Limb?”), organizations such as the Internet Archive and others that promote CDL (for copyrighted works) ignore the reality that it all hinges on the making and distribution of an unauthorized copy of a copyrighted work. That unauthorized digital copy then substitutes for any licensed e-version of a published work that exists or which might be produced, effectively destroying the market for the work and imposing economic injury on the rights-holder. Nevertheless, the Association of Research Libraries claims thatboth the exhaustion doctrine and the fair use doctrine support CDL when properly implemented”. This is creative but just plain wrong on both counts, as the Association of American Publishers has pointed out.  

The first sale or exhaustion doctrine applies to physical works and allows a purchaser to dispose of a work without reference to the rights-holder once the work has been sold. However, although you own a copy of the work, you do not own the copyright. Thus, if you purchase a book you can resell it, lend it, give it to your dog to eat or burn it. But the one thing you cannot do is to copy or reproduce it without authorization, save for non-substantial portions or selective uses that conform with fair use or fair dealing. For a library to digitally scan an entire work and then lend out the digital copy is a clear violation of both the author’s reproduction right and distribution right. (The distribution right grants to the copyright holder the exclusive right to make a work available to the public by sale, rental, lease, or lending.) Given these realities. no matter whether “properly implemented” (whatever that means) or not, CDL cannot be fair use under US law and there is certainly no provision in Canadian law that would make it a fair dealing. Nor does exhaustion or the first sale doctrine apply in this case.

The Association of Canadian Publishers (ACP) has recently released a statement highlighting for Canadian libraries the risks and realities of CDL in Canada. The ACP, which represents 115 independent English-language book publishing firms across Canada, underlines that copying and making available are exclusive rights of copyright holders. It notes that there are no provisions for CDL in the Copyright Act, and points out that with respect to fair dealing, there is no certainty that the copying is for an allowable specified purpose or that the dealing is “fair” with respect to the impact on rights-holders. Finally, the ACP notes that litigation is pending in the US. This is the case currently before the court of the Southern District of New York (Hachette v Internet Archive), a case which is likely to settle this question in the US definitively this year.

Wishful thinking does not make something non-infringing or turn an unauthorized use into a fair use or dealing. Fair use and fair dealing have their rightful place as part of the overall system of copyright, allowing limited access without permission for specified purposes and subject to certain conditions. And of course, new situations will arise that will require either the legislature or the courts to apply fair use/fair dealing criteria to determine to what extent exceptions (or user’s rights) apply as technology evolves. (AI generated art will likely become a test case in 2023).

While the means of delivery may change, the fundamental principles of copyright, including what is a fair use or dealing, continue to apply. As a principle, the determination of fair use/dealing should be fair to both rights-holders and users, although in recent years that has not always been the case when it comes to creators. For the ecosystem to work, it is important to play fair. Ripping off authors and educational publishers in Canada is not fair. Trying to bend the rules to invent a new lending doctrine that relies on unauthorized copying and distribution is not fair. When fair play prevails, everyone wins. That is what Fair Use and Fair Dealing Week should be all about.

© Hugh Stephens 2023. All Rights Reserved.

The Challenges of the Indie Musician: Piracy, the Value Gap, Broadcast Royalty Exemptions…and Now (For Foreign Performers) a Possible Tripling in US Visa Fees.


It has always been a challenge for indie musicians and performers to earn a living, and it looks like it may soon get worse for performers outside the US who hope to play gigs there. Among the big challenges to earning a living from music are piracy, the “value gap”, COVID and now a new hurdle, a possible tripling of visa processing fees for performers to enter the US.

Piracy continues to be a major challenge. The forms of piracy have changed over the years as technology has evolved, but it is still a major source of revenue leakage for the industry, primarily in the form of stream-ripping.  Digital music services were supposed to come to the rescue but the earnings, except for the biggest names, haven’t restored revenues to what they were before the onset of digital piracy. The music industry talks about a “value gap” between what the streaming industry earns and the amount paid to performers. Part of the value gap problem initially arose because the big digital platforms were insufficiently diligent in screening out pirated content, as I wrote in a blog post a few years ago (“YouTube and the Music Value Gap”). That problem has been largely addressed but now the issue is the digital pennies that flow from the big streaming services, of which Spotify is the poster-child, to the artists. This is a source of perennial complaint. It has been reported that Spotify pays as little as a third of a cent per stream. Young artists claim they cannot earn a living wage from streaming royalties. Part of the issue is that revenues are often split with recording studios and rights-holders. Spotify pays rights holders who distribute royalties to performers. That is how the ecosystem has been constructed. It works well for well-known performers but perhaps not so well for emerging artists.

Another issue that reduces payouts to artists are the exceptions granted to certain broadcasters in the US allowing them to avoid paying performance royalties. This is a longstanding US issue where terrestrial broadcasters are exempted from paying royalties to performers or labels for playing recorded music on air. Online broadcasters and streaming services are required to pay, but not over-the-air AM/FM radio stations. These terrestrial stations do, however, pay royalties to composers and songwriters for broadcasted music, just not performers. This anomaly goes back to the early days of radio and repeated attempts to level the playing field by applying the same rules to terrestrial and online broadcasters regarding performers’ royalties have been beaten back time after time by the broadcast lobby. The failure of the US to pay terrestrial broadcasting royalties to performers has led a number of other countries to reciprocate (one could say, retaliate) by denying similar payments when US works are played in their countries, even though domestic performers benefit from royalty payments. This tit-for-tat measure is estimated to cost US performers over $300 million annually. Securing “national treatment” through trade agreements is one way to get around the denial of benefits to US performers abroad, but a better way would be to change US legislation to remove the broadcast exemption which would then benefit both US and foreign performers. Back in 2021 I blogged about attempts to end the discriminatory treatment through the American Music Fairness Act. That legislation did not pass before the term of the last Congress expired, but has since been re-introduced.

Canadian and foreign performers face a similar but slightly less onerous provision in Canada. The first $1.25 million in advertising revenues for terrestrial stations is sheltered from performance royalty payments except for a nominal $100 fee. In effect, this is a greatly watered-down version of the performance royalty exemption enjoyed by US radio stations and is as controversial in Canada (and as unpopular with the music industry) as the terrestrial broadcast exemption is in the US.

With all these impediments, it is a wonder that anyone is able to make a living from playing music. One way that artists have been encouraged to earn a living is through touring. That was the standard response when digital piracy was rampant. “Go on tour” was the answer given by those who argued that musicians would just have to learn to live with piracy and instead earn a living from music by performing live. Then along came the COVID epidemic and the collapse of concerts. As COVID recedes into a bad memory (we hope) touring is resuming, but suddenly a new financial challenge has cropped up for performers outside the United States. That barrier is the threatened drastic increase in the cost of getting into the US to perform. This is applicable to all non-US performers (not just musicians) but particularly affects Canadian musicians who seek to reach a North American audience.

For many entertainers outside the US, America is the big enchilada. To issue a permit to perform in the US, the US Government understandably wants assurances that the applicant is actually qualified to perform. US artists generally don’t seem to mind the friendly competition, and of course often tour abroad themselves, but want reassurance that performers getting performance visas are qualified to receive them. The Department of Homeland Security (DHS) offers two categories of visas that are primarily used by foreign performers, “O” and “P” visas. “O” Visas are for an individual who possesses  “extraordinary ability in the sciences, arts, education, business, and athletics… and has been recognized nationally or internationally for those achievements”. (US Citizenship and Immigration Services). A “P” visa is for groups of international renown, or for groups who are “culturally unique”, such as musicians who perform folk music in their home country. There is an additional type of P visa for Canadian artists or musicians entering the US through a government recognized reciprocal exchange program (P2 Visa). While there are several windows through which to gain entry, in order to be recognized as being of sufficient stature, applicants need to be certified by a US presenting arts organization or union such as the American Federation of Musicians (AFM) , the American Guild of Musical Artists, IATSE (International Alliance of Theatrical Stage Employees, Actors’ Equity), or SAG-AFTRA. That costs money. In the case of AFM, the charges are $300 for normal processing time (5 to 10 business days); $400 for expedited service (2 business days); or $550 for super-expedited service. Other organizations charge similar processing fees for the recommendation letters. And on top of that, there are the visa fees themselves.

At the present time, the fees charged for “O” and “P” visa processing by the US Citizenship and Immigration Service (USCIS), a part of DHS, are $460. This was the fee level set in 2016, when they were last raised (from $350). There was a proposal for a hefty increase in visa fees in 2020 as part of a general USCIS fee increase but it was not implemented in the face of a federal court injunction. Now the proposal for an increase is back, in spades. DHS has proposed that the filing fees for a regularly processed “O”-type visa increase from the present $450 to $1,655, more than tripling them (an actual increase of 260%) and for “P”-type visas from $460 to $1615.

The DHS proposal is not just directed at foreign performers. It is part of a proposed across-the-board increase by DHS to increase funding for its visa operations. In a 200 page notice published in the Federal Register in early January, DHS proposes “to adjust” various fees because its costs have increased, there has been higher demand, and the Department needs to hire more employees. The purpose is supposedly to improve service yet the proposed standard on visa processing is to move from 15 calendar days to 15 business days, a downgrade in service delivery times. The Department is chronically underfunded and at times has been on the verge of furloughing employees because of Congressional failure to approve funding.

Public comments on the proposed fee increase are solicited with a deadline of March 6. You can submit a comment here.

It seems that foreign performers have been caught up in a wider problem of US government under-funding although the proportional increase in the “O” and “P” visas is one of the largest proposed. (H1-B visas, usually paid by employers who want to bring hi-tech workers to the US, also face a similar steep increase). One of the reasons for the exponential increase is the inclusion of a $600 surcharge to fund asylum programs. Some visa categories in the humanitarian category remain fee exempt or face no or very small increases as a result of this proposed cross-subsidization. (“DHS proposes this cost shifting approach with the Asylum Program Fee to place greater emphasis on the ability-to-pay principle for determining user fees”, Federal Register, Vol 88, no. 2, p. 453). The question, however, is whether it is reasonable to expect struggling musicians to help fund US government shortfalls and finance humanitarian programs. Clearly some organizations representing performers, such as the American Federation of Music (AFM). do not think so. (“AFM Opposes Proposed USCIS Visa Increases“)

The AFM statement is both a demonstration of artistic solidarity with foreign performers, such as the Canadian Federation of Musicians, (which is affiliated with the AFM) and a recognition that the presence of foreign performers in the US also benefits US artists and the US entertainment industry. The AFM points out that “Music is collaborative in nature, providing US artists with the ability to connect with international artists, who in turn provide those US artists with access to markets abroad” and that “International touring artists contribute to the US economy in the way of filling venues, booking hotels, and the many other costs associated with a tour”. Advocacy by the AFM and US artists is important because the US government is going to listen, first and foremost, to input from US stakeholders. Foreigners don’t vote for Congress. The AFM has written to Congressman Bennie Thompson, Ranking Member of the House Homeland Security Committee, to solicit his support. Canadian groups such as Folk Music Ontario have also been sounding the alarm, suggesting that its members “please reach out to all US buyers, venues, artists, associations, etc., you may work with, to seek their assistance”. It is interesting to note that so far none of the other associations or unions in the US that engage with incoming performers by processing and issuing certification letters appear to have taken a public position on this. (They haven’t supported the increase, but neither have they spoken up to oppose it. Perhaps silence is their position).

What about the cost for US performers to tour in Canada as a comparison? It’s either free (depending on an earnings threshold) or $155 with a cap of $465 for three performers or more. Wouldn’t it be nice for Canadian performers if the US offered reciprocal treatment? That won’t happen, but perhaps the projected increase will be made less draconian. DHS needs to be adequately funded, just not on the backs of indie musicians.

While piracy and inadequate payments to performers from streaming services are long-term issues to tackle, holding the line on exorbitant visa increases would at least ensure that an additional burden was not added to the travails of indie musicians seeking to tour in the US. While DHS faces a funding dilemma, hopefully the burden can be more equitably applied and the proposed increases rolled back to something more reasonable.

© Hugh Stephens, 2023. All Rights Reserved.

Update: The letter of famed guitarist and author’s advocate, Marc Ribot, calling on DHS to “withdraw this ill timed, culturally and economically reckless proposal”, has just come to my attention and merits mention. It was featured in a blog post just published by former music executive Neil Turkewitz, “A Tale of Two Visa Regimes: A Dickensian Parable”.

Will the Year of the Rabbit be the Year of Contentious Copyright Litigation over AI-Generated Content?

Credit: Author

According to the Chinese zodiac, the Year of the Rabbit (this year) is supposed to represent “relaxation, quietness and contemplation”. This “Rabbit Year” is predicted to be “calm and gentle”. (Good news for the people of Ukraine, if true).  However, when it comes to the thorny issue of copyright and content generated by artificial intelligence (AI), the Year of the Rabbit may end up being the Year of Contentious Litigation.

First out of the gate in 2023 are two cases, one where Getty Images is suing Stability AI in the High Court of London (UK) and the second in the US where artists Sarah Andersen, Kelly McKernan, and Karla Ortiz have brought a class action suit against AI powered art services Stable Diffusion (owned by Stability AI), Midjourney and Deviant Art. Technically these cases were not initiated in the Year of the Rabbit, but in the last days of the preceding Year of the Tiger. The date of Chinese New Year varies each year, being determined through a complex calculation involving both solar and lunar cycles, but it always falls sometime in January or February. In 2023, that day was January 22. Anything in this calendar year that occurred before that date took place in the Tiger Year. As can be imagined by its name, the Year of the Tiger is associated with “courage and bravery” and the “defeat of evil”. (Another Ukraine analogy). It certainly takes courage to take on large AI platforms as the artists have done. As for defeating evil, I don’t think that is the characterization I would have for AI, although there is no doubt that it can be put to evil purposes. In fact, this is already happening with the production of artificial photo-substituted images of celebrities and others, and use of AI platforms like ChatGPT to produce misinformation.

Okay, let set aside the theme of the Chinese zodiac for a moment, and focus on the point of this blog post, which is to look at what is happening on the litigation front with respect to AI-generated content. There are fundamentally two principal issues involved. First, whether AI-generated content (images, writing, music) infringes the copyright of creators by building its database through the scraping and ingestion of millions of copyrighted works off the internet without licence or authorization. Second, whether the producers of AI-generated content (that is, users manipulating the platform, not the platforms themselves) have any claim to copyright on the works created. It is all very unclear, which is exactly the point of the litigation.

In the case of Getty Images, the company already licenses content to technology companies to help them train artificial intelligence systems to generate AI products, but Stability AI did not bother to seek a licence. Stability AI is just one of a number of companies that has emerged in the AI generated image space, as I wrote about in an earlier blog. (AI and Computer-Generated Art: Its Impact on Artists and Copyright). Both Microsoft through its investment partnership with OpenAI (DALL-E2 and ChatGPT) and Google are developing AI platforms, although they have been relatively cautious with their release owing to issues with NSFW content as well as copyright issues. DALL-E2 and ChatGPT have been released as trials while Google has been holding back on the public release of its latest AI generated image product, Imagen. In contrast, Stability AI’s founder, Emad Mostaque, seems to subscribe to the “better to ask for forgiveness after rather than permission before” school of thought. A couple of months ago, I wrote about Mostaque and his laissez-faire approach to copyright and AI. (AI Generated Art: Another “Technical Breakthrough” Calling Out for Responsible Management and Regulatory Oversight).

Given Mostaque’s approach, the fact that Stability AI chose not to acquire licences–yet clearly ingested some images owned by Getty (the company’s watermarks even show up on some of the AI generated works)–is not surprising. Getty’s goal is no doubt to provide AI companies with a sharp reminder that licensed images exist for AI training. As for the artists’ lawsuit, its basis and likelihood of success is less clear. Dr. Andres Guadamuz of the University of Sussex, editor of the Journal of World Intellectual Property, has criticized the basis of the case as being technically inaccurate. (see below for more information)

The artists’ suit against Stability AI, MIdjourney and Deviant Art is based on the factual reality that the “data” that feeds the AI art generating algorithms consists of millions of images scraped without authorization from the internet, many of them under copyright and at least a few of them belonging to the plaintiffs. Specifically the suit declares that Stability AI through its application “Stable Diffusion”, “downloaded or otherwise acquired copies of billions of copyrighted images without permission”. It then “caused those images to be stored and incorporated…as compressed images”, referred to as “Training Images”. The training images were then used to train the algorithm. The “new” images produced by Stable Diffusion’s algorithm are argued to be derivative works produced from the training images. The suit states that ultimately the platform is basically a complex collage tool that creates art works “in the style of” based on real artists’ works without compensation or permission leading to “blatant and enormous infringement” of copyright while producing works that compete in the marketplace with the works of the original artists. Accordingly, the suit accuses the defendants of direct and vicarious copyright infringement, violation of the DMCA (by removal of Copyright Management Information), violation of the right of publicity and unlawful and unfair competition. Relief sought is in the form of statutory and punitive damages, costs, and permanent injunctive relief. If successful, this suit would throw a major spanner into the works of AI machines producing works based on data (consisting of images, written works, and music as examples) ingested without licence or permission from the internet. It would require much smaller data sets based on licensed or public domain content. Another option would be for the AI platforms to allow and make it easy for artists, writers and musicians (“authors”) to opt out of the database.

The tech industry does not want to have to tailor its databases or be subject to any restrictions on data mining. Scooping it all up (for free) is the model it prefers. In arguing their case, the defendants will claim fair use, insisting that the resultant work is not derivative but rather the result of a transformative process. They will also no doubt claim that what the algorithm produces is not a copy of the artists’ work, even though it may be “in the style of”. However, although not an exact copy, the question will be whether it reproduces a “substantial” part of the original work? Another defence argument will probably be that not all the ingested works necessarily fall under copyright, the output being an amalgam of millions of images, some protected, some not.

In addition to legal arguments rebutting the complaint, there are also technical arguments to consider. In his article critiquing the lawsuit from a technical perspective, Dr. Guadamuz argues that the scraped inputs do not form a “collage”. He states they are a combination of links to images (not the images themselves) combined with text descriptions, all of which are themselves narrowed by the descriptor that is inputted into the model. If the user is seeking an image that uses the word “cats”, all data that does not relate to cats is discarded. Thus, he argues, it is inaccurate to claim that AI generated art draws on a database created from every image ever ingested. He concludes that the artists involved in the suit will therefore not be able to prove that their work was infringed.

However, one problem for those arguing that text and data mining fall under fair use is the reality that the resulting “new image” can and often does substitute for the original work (which may have been included in the training data), thereby negatively affecting the author’s ability to economically exploit the work. The interpretation of fair use and fair dealing in relation to text and data mining (TDM) is still very fluid.

The UK, for example, is currently reviewing its existing TDM exception. (Britain’s Proposed Approach to Text and Data Mining (TDM) for AI: How Not to do It (A Lesson for Canada and Others). The original proposal from the Intellectual Property Office (IPO) was to allow TDM “for any purpose” and to specifically eliminate any possibility of licensing content for text and data mining. It was argued that this broad exception would promote “innovation”, but the proposal aroused huge opposition from Britain’s artistic community. Recently the Communications and Digital Committee of the House of Lords studied the IPO proposals and concluded that “The Intellectual Property Office’s proposed changes to intellectual property law are misguided. They take insufficient account of the potential harm to the creative industries.”  Even the Minister responsible has said she thinks it is likely the IPO’s proposed changes will not proceed. For its part, the IPO now has indicated it will continue consultation. While there are potentially legitimate reasons for some TDM exceptions, allowing it for “any purpose” is damaging and misguided, and hopefully the IPO’s proposals as they stand will be substantially modified.

Many academics have argued they need access to TDM material to be able to conduct research. In some countries, such as Canada, there is currently no TDM exception in copyright law, an issue that may be reviewed in the next update of the Copyright Act, expected in the next year or so. However, there is a big difference between providing open access to copyrighted content to enable sampling of works to produce research that does not reproduce the original work and in no way competes with it, (and is used for non-commercial purposes), and using copyrighted works to produce derivatives that can substitute for or compete with the originals. Any TDM exception needs to be narrowly focussed to achieve the end of enabling legitimate research while avoiding a free-for-all that would undermine the interests of rights-holders.

Apart from the question of whether AI platforms should be able to ingest copyrighted content (note that what is often described as “data” actually consists of pre-existing copyright protected works) without authorization, there is the issue of who can exercise rights to “new” images created by the algorithm. Who created them? Was it the algorithm/platform or the user who “created” them by inputting minimal textual instructions. “Create a work of a dog eating ice cream in the style of…..”. There is not much originality of expression there although longer, more complex prompts/instructions could theoretically qualify. This is another point that will require clarification. On the other hand, if the user cannot claim ownership because of failure to meet the test of originality, could the rights be held by the creators of the algorithm? And if it was an algorithmically generated image, was there any human creation involved? If not, according to the US Copyright Office, such a work is not eligible for copyright registration. Finally, any discussion of possible copyright protection for an AI-generated image must address basic questions related to the legitimacy of the inputs used to generate it. Has the output become a “poisoned” derivative work because of infringement at source?

These and other questions will need to be weighed by the courts. The decisions will have a major impact on artists and other creators, the way in which AI develops in the years ahead, and even the role of AI content in modern society. The Getty and class action lawsuits are but the first shots in what will be a long campaign. The Year of the Rabbit is unlikely to be “calm and gentle” on this issue. Next year, 2024,  is the Year of the Dragon and it is supposed to represent “good luck”. One has to ask, “good luck for whom”? The courts will have an important role in answering that question.  

© Hugh Stephens 2023. All Rights Reserved.

Update: The day this blog post went live the UK minister responsible for the IPO, George Freeman, declared in Parliament that the British Government was no longer planning to introduce the proposed unlimited TDM exception into UK copyright law.

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