Month: June 2025

Is it Ethical to Use Pirated Content for Commercial Purposes? META Thinks So

Two signs hanging on a string, one labeled 'ETHICAL' in green and the other labeled 'LEGAL' in red, against a purple background.

Image: Shutterstock.com

There is the question of what is ethical, and then there is the question of what is legal. Sometimes they are the same, often not. The legality of using copyrighted content without authorization for commercial purposes, such as in training AI models—as META and a number of other companies have done—is being decided in court. In META’s case, however, there is the further complaint (not denied by META) that many of the unauthorized copies it made were taken from pirated content. While this revelation may not change the fundamentals of the copyright infringement case against it, there is still the ethical question for META to answer. On this, it comes up short. Very short.

META, the parent company of Facebook, Instagram and WhatsApp, used vast amounts of copyrighted content, without permission or licensing, to train its AI model. It is not alone in doing so. This practice may or may not be legal. A number of cases are working their way through the courts, most of them in the US, with copyright owners from Getty Images to Disney and Universal, from the New York Times to the Authors Guild and on to music labels, all claiming that their content was unfairly and illegally copied to provide training fodder for training AI models, such as META’s model, Llama. META and other AI developers claim that their use was a “fair use” under US law. We’ll see. However, as part of its giant vacuuming of publicly available (but in many cases protected) content, META also ingested content from various pirate sites and databases, notably the notorious “shadow library”, LibGen (Library Genesis). LibGen originated in Russia and contains up to 80 million scientific and academic articles, as well as millions of novels and nonfiction books, most unauthorized, unlicensed copies. It has a been sued by major academic and textbook publishers. In 2017 Elsevier won a $15 million judgement against LibGen, and another pirate website, SciHub. Last year Elsevier was awarded a $30 million default judgement. However, both LibGen and SciHub remain available online.

The extent of the copyrighted content held by LibGen was revealed in an investigative report published recently by The Atlantic. You can search through the LibGen database as published by The Atlantic to find out what works are included, and whether your work has been pirated. Authors from Newfoundland to New York and lots of places in-between and elsewhere found their works included in the database when they did the search. The Authors Guild advises writers to fight back by sending a formal notice to META and other AI companies asserting their rights, as well as adding a “No AI Training” notice on the copyright page of works. This is in addition, as would be expected, to joining the Authors Guild to help them fight what is happening.

Consuming pirated content can result in costly penalties, as some unfortunate downloaders have found out to their regret. Using it for commercial purposes is even more egregious. It’s like running a pirate streaming service based on stolen content. META didn’t use pirated content in this way, but they used it commercially just the same, in their case for AI training. Were they aware of what they were doing. You bet they were.

The discovery process in the US suit of Kadrey et. al. v META revealed a series of email exchanges in which some META employees expressed concerns over the ethics of using pirated content. The concerns went up the chain and back, with “MZ” (guess who? No, not Moses Znaimer) giving approval to proceed. Following on these revelations in Kadrey v META in the US, two class action lawsuits have been filed in Canada, one in Quebec on behalf of a number of French language authors and one in British Columbia. The Quebec suit specifically flags the piracy issue. Among the listed complaints is the following:

“Rather than acting within the law and respecting the rights of class members, it (META) deliberately chose to train its LLMs (Large Language Models) from datasets containing illicit copies of works from all over the world, including those of class members.”

Damages sought are $20,000 per work.

It is clear that META wilfully torrented content from LibGen, knowing that many or most of the works on LibGen were infringing, pirated copies. They just didn’t care.

If it turns out that somehow, inexplicably, META’s unauthorized use of copyrighted content for AI training is ruled by the US courts to be fair use, would the fact that the source of some of the content was from a pirate source be relevant? I am not sure, but a judgement that has just been delivered in California in the “Anthropic” case suggests that even if unauthorized copying can be justified as fair use because it is considered “transformative”, that does not excuse piracy–which is still an infringement. In this case, Anthropic copied both purchased and pirated works to train its AI model, and kept the copies in its central library. It was sued by some authors and journalists in a class action suit alleging copyright infringement. The judge, in one of the first such cases to reach a decision point, concluded on summary judgement that Anthropic’s unauthorized reproduction of copyrighted works for AI training was fair use under the transformation doctrine but added, with respect to those works drawn from pirate sources such as LibGen and others,

“piracy of otherwise available copies is inherently, irredeemably infringing even if the pirated copies are immediately used for the transformative use and
immediately discarded”.

A trial will be held to determine the damages from the piracy.

Being one of the first AI training cases out of the gate, Anthropic will certainly be appealed, so this is not the last word. However, this ruling when added to the US Copyright Office’s views expressed in its Pre-Publication Report on Generative AI issued last month on May 9, a day before Register Shira Perlmutter was dismissed, that “the copying of expressive works from pirate sources in order to generate unrestricted content that competes in the marketplace, when licensing is reasonably available, is unlikely to qualify as fair use”, suggests that META could be in both ethical and legal trouble.

In other jurisdictions, such as Singapore, content used in AI training under a Text and Data Mining exception has to be legally accessed, although this is very thin legal protection because technology companies can legally purchase just one copy of a work to comply. In Canada you cannot break the law (i.e. circumvent a technological protection measure) to exercise a fair dealing right. But whether or not using a pirated source puts META offside the law in the US with respect to fair use, (and the Anthropic case suggests that it could at least with respect to the pirated works), think of the ethics and the image this presents to the public.

A company like META, capitalized at something like $2 trillion, cannot be bothered to even access content legitimately, let alone use it legitimately. Why? Because MZ said it was ok to proceed. Sadly, even though they are not the only ones to use pirated content to train their AI models, that tells me all I need to know about the values and ethics of this particular company.

© Hugh Stephens, 2025. All Rights Reserved.

This post has been updated to include reference to the decision in the Anthropic case, released after the initial publication of this blog post.

The Online Streaming Act Was Already Complicated and Controversial Enough, But Now Quebec Enters the Fray (No Surprise: It’s Happened Before)

An illustration depicting a tug-of-war scenario, featuring a Canadian flag on one side and a Quebec flag on the other, symbolizing the cultural and political tensions between Canada and Quebec.

Tug of War Image: Shutterstock (modified)

Welcome to Canada, where the difficult can become the intractable when you add the inevitable additional ingredient of federal-provincial politics to any policy issue. Throw in the survival of the French language and Quebec culture in Canada and you have another classic Canadian drama. How to ensure that in protecting majority interests you don’t damage minority interests, or put another way, how to govern in the national interest without making a special exception for Quebec that will undermine the federation, especially now that some other provinces, such as Alberta, are playing the “Quebec card”. It has always been a delicate dance to keep the two linguistic groups rowing in the same direction, often accomplished by providing concessions to Quebec that have managed to meet its unique needs while maintaining provincial interoperability and minimum national standards. The latest challenge is broadcasting, or more specifically, streaming—which may or may not meet the definition of broadcasting.

It has been a well-established principle for decades that broadcasting in Canada is regulated by the federal government, although this was initially contentious (as it is once again). Perhaps not surprisingly, the original challenge came from Quebec which passed its own Broadcast Act in April 1929, before any federal legislation in the broadcast space had been enacted. A Royal Commission on Radio Broadcasting had been established by the federal government the year before to examine British and US systems (one leaning heavily toward a national public broadcaster, the other taking the lightly regulated commercial broadcasting route). Quebec quickly seized the initiative before any recommendations were issued by passing its own legislation. The Royal Commission’s findings, known as the Aird Report after Chief Commissioner Sir John Aird, former President of the Canadian Bank of Commerce, were finally issued in November of 1929.

That report recommended a public broadcasting system and laid the foundations for the establishment of the CBC/Radio-Canada. The stock market crash and ensuing Depression delayed action, along with a change of government, but by 1931 the R.B. Bennett government was ready to act. Quebec further forced the issue by passing a provincial Radio Act relating to licensing of receivers and transmitters. The federal government then referred the jurisdictional issue of broadcasting to the Supreme Court of Canada which ruled, 3-2, that broadcasting was a federal responsibility under Section 92(10)(a) of the BNA Act on the grounds that broadcasting was an undertaking, like the telegraph, that extended beyond provincial boundaries. Quebec appealed, but the Privy Council in London upheld the Supreme Court’s decision. The Bennett government then established the Canadian Radio Broadcasting Commission (CRBC), the forerunner of both the public broadcaster, the CBC, and the broadcast and telecoms regulator, the CRTC (Canadian Radio-Television and Telecommunications Commission). Originally national broadcasting was in both official languages but to meet criticisms from Quebec, the CRBC launched French language programming unique to Quebec in 1934, marking the beginning of Radio-Canada’s French language service. An excellent summary of the history of Canadian broadcasting, produced by the Canadian Communications Foundation, can be found here.

Given the fractious history over who should regulate the airwaves, particularly given the importance of communications when it comes to cultural and linguistic identity, it is not surprising that differences have arisen with regard to streaming. The key question is whether streaming constitutes broadcasting. The federal regulator, the CRTC, has always maintained that mass communication transmitted digitally (new media) is a form of broadcasting although for many years it declined to regulate it on the grounds that there was no current need and that regulation might stifle innovation. In 1999, it issued a New Media Exemption Order, the main conclusion of which stated;

“…pursuant to subsection 9(4) of the Act, the Commission exempts persons who carry on, in whole or in part in Canada, broadcasting undertakings of the class consisting of new media broadcasting undertakings, from any or all of the requirements of Part II of the Act or of a regulation thereunder. New media broadcasting undertakings provide broadcasting services delivered and accessed over the Internet,…”

The Exemption Order was extended in 2009, but all that changed with the introduction in 2023 of the Online Streaming Act. That legislation amended the Broadcasting Act to specifically bring streaming content under the purview of the regulator, thus allowing the application of many provisions regarding streaming content, a number of them controversial. In particular it extends CRTC authority over foreign based streamers distributing programming in Canada. While the legislation gave authority to the CRTC (the Commission) to implement key parts of the Act, this will be a slow process as extensive hearings are required. Nonetheless, the Commission fired the first shot almost exactly a year ago, even before hearings had commenced, by requiring “base contributions” of 5% of Canadian revenues from (mostly foreign) streaming services for the creation of Canadian content, including funding to support local news broadcasting in Canada. This occurred prior to the CRTC’s review of how to define Canadian content, and determining who is entitled to claim a Canadian content credit for its creation. In the meantime, the foreign streamers have gone to Federal Court to fight the mandatory “contributions”, and so far not a nickel has been paid.

Another element of the CRTC’s deliberations will be deciding how to implement measures to ensure “discoverability” of Canadian content on streaming platforms. “Discoverability” in a broadcasting/streaming context goes beyond the plain English use of the word. Canadian Heritage (now the Ministry of Canadian Culture and Identity) has published a whole research paper on the technical aspects of discoverability. The paper offers a general definition (“…how content can stand out in order to reach an audience in a universe of hyper choice, where the catalogues of major cultural dissemination platforms offer tens of thousands of titles and products to users..”), but then goes on to point out the difference between content discoverability based on actions aimed at target audiences (such as highlighting certain content), and the use of technical tools or automated systems to showcase content and make it more findable (such as modifying or influencing algorithms). In short, it is a complex issue.

Discoverability was one of the most controversial and misinterpreted aspects of the Online Streaming legislation, then known as Bill C-11. Amendments introduced during the legislative process to encompass user-generated content, requiring that from a platform perspective it too be subject to the discoverability rules, were wildly and inaccurately criticized as internet censorship. Some groups purporting to represent the creative and user communities criticized the discoverability requirements as interfering with market forces and altering algorithmic results. But the Bill passed, including the discoverability requirements, the details of which remain to be established by the CRTC. While this process is underway, Quebec just threw a grenade into the room through the introduction of its own legislation, Bill 109, ”An Act to Affirm the Cultural Sovereignty of Québec and to Enact the Act Respecting the Discoverability of French-Language Cultural Content in the Digital Environment.”

Michael Geist of the University of Ottawa has described the Quebec bill as “unconstitutional, unnecessary and unworkable”, which is a pretty damning but largely accurate indictment. The problem that Quebec is trying to address, as MediaPolicy.ca blogger Howard Law has pointed out, is the “drastic underconsumption of French-language music on streaming platforms, a stunning 4.6 per cent of the top 10,000 song streams in Quebec, a province that is 80 per cent native French speakers.” Compare this to the French-language content requirements imposed by the CRTC on French-language radio stations. These stations must devote at least 65% of all popular music broadcast each week to French-language selections. The CRTC policy, whether it is Canadian content or French-language content, is based on the same premise; if you don’t require a minimum of Cancon/French-language content, the stations will default to non-Canadian, non-French language content. This will deprive Canadian anglophone and francophone artists of exposure and hinder development of “desirable” cultural content. And possibly contribute to weakening the French language in Quebec.

The cultural libertarians would say, so be it. If quotas are required to ensure that Cancon or French-language content gets consumed, then maybe it is not worth listening to or watching. Let the consumer decide (which is essentially how streaming works; the consumer chooses what to consume rather than consuming what is offered). The counter policy argument is that the content industry is so dominated by (take your pick; Hollywood, the major US labels, English language content, etc) that countermeasures are required to balance the playing field and ensure that local cultural content has a chance to breath before it is suffocated by the dominance of outsiders. In a society like Quebec, that represents roughly 7 million francophones in a sea of well over 350 million anglophones in North America, this is an especially critical issue. Will regulating discoverability requirements change the listening or viewing habits of Quebecois, especially young people. I have my doubts, but what is the alternative?

Governments regulate markets in many ways for the greater good, so why not cultural content? In Canada, the whole premise of broadcasting (going back to the 1920s and 1930s), and now streaming, has been to preserve and encourage Canadian voices, whether they be anglophone or francophone. How that should be done and who should do it has always been a tricky question and at times has required a delicate balancing act, sometimes between Canada and the United States, and sometimes between the Canadian federal government and Quebec. It would seem that we are in the midst of another one of those moments. Quebec’s desire to put its thumb on the scale to protect the French language is not new and should not be a surprise, although whether Bill 109 is constitutionally legal and, if it is, whether it will be effective, are valid questions. But we have been here before. As I said at the outset, welcome to Canada.

© Hugh Stephens, 2025. All Rights Reserved.

Literary Pilgrimages: How Iconic Independent Bookstores are Becoming Travel Destinations

by Jennifer Mark

Image credit: Photo by Pj Accetturo on Unsplash

There is no more satisfying feedback for a blogger than interaction with readers. After I wrote about the Livraria Lello in Porto, Portugal a few weeks ago, I received an email from a reader, who goes by the penname of Jennifer Mark. Jennifer noted that “bookstore tourism” is a growing niche travel trend and wondered if I’d be interested in a guest column on the topic, researched and written by her. Until now, I have never run a guest article but this one provided such interesting information and opened so many new doors, that I thought you would be interested to read it. So here is Jennifer’s contribution.

Independent bookstores are the heart of communities since not only do they sell hardbacks and paperbacks, they’ve also become hubs of learning and comfort for many people. Sadly, many independent bookstores are facing financial challenges as low profits and high rents make it tough for these businesses to thrive. This is likely the reason why avid supporters of these establishments are now making it their mission to visit some of the best independent bookstores all over the world as a way to help them stick around for a long time. With bookstore and library tourism becoming one of the hottest travel trends this year, it’s no wonder that an indie bookstore like Livraria Lello in Portugal attracts about 1.2 million visitors annually. What’s more, some of the most iconic independent bookstores, like The Strand in NYC, are always crowded, no matter what day it is. 

In the coming years, we can expect that indie bookstores and book towns will increasingly become more popular not just as a place to shop for unique literary finds, but as places of interest for tourists from all over the world. Here’s why iconic independent bookstores are becoming travel destinations, and some suggestions as to where you can have the best reading and browsing experiences while you’re traveling.

Books, Brews, and Booze

Back in the day, staying at a coffee shop or a hidden corner in a bar was the only way that you could enjoy a beverage while reading a book in a public place. But some independent bookstore owners have found out that making drinks available to their patrons can increase browse time, which can lead to more sales. It is estimated that coffee bookstores could generate annual revenues ranging from $150,000 to $500,000, and this is why indie bookstores are stepping up their game by adding coffeeshops or bars to their business premises to entice tourists to come in, and encourage customers to stay a little longer.

Some of the most loved coffeeshop/indie bookstores in the world include the Beacon Hill Books & Cafe in Boston, which features a lovingly curated collection of good reads and an impressive Afternoon Tea menu. Here, you can get lost in a novel while enjoying a pot of their custom blend tea with a classic cream or apricot-Earl Grey scone, or perhaps a slice of Spring Carrot Cake. In Sydney, on Bondi Beach, there’s the Gertrude & Alice Bookstore and Coffee Shop, which has a stockpile of more than 40,000 second-hand books. This establishment has a cafe menu where you can choose savory eats or sweet treats, so try their salmon breakfast roll or coconut and raspberry bread with an iced latte or a pot of Moroccan mint tea.

Meanwhile, those who prefer to have a glass of wine or a cold beer after browsing or while reading can check out indie bookstore bars, which are becoming must-visit destinations for tourists who are constantly on the hunt for unique travel and adventure experiences. If you love art, wine, and books, definitely make plans to visit Bibliotheque, a family-owned bookstore, bar, and cafe in New York’s SoHo district. They have a collection of nearly 10,000 books, and a gorgeous bar area decorated with works from Henri Matisse, Alexander Calder, and other iconic artists. Choose from among their extensive wine collection which includes sparkling, white, orange, red, and rose wines, or have a wine-based cocktail if you want something a little different. If you’re in Maryland, drop by The Buzzed Word, which features a collection of diverse books, a natural wine shop, and a bar. Order a glass of vino to enjoy while reading in one of their comfy chairs, or get a bottle to go.

Unusual Set-ups and Amazing Locations

Some of the most interesting indie bookstores can be found in unusual places, which is why they’re considered to be tourist attractions. Take for instance Word on the Water, a used bookshop that’s situated on a 1920s Dutch barge behind King’s Cross in London. The novel setting makes it an enjoyable place for book shopping, and on certain days, customers are treated to live jazz music and poetry readings. While you’re in England, make sure to visit Barter Books, a used bookstore built inside a Victorian train station. You can sell books for in-store credit, then sit down for a good read while enjoying some good food from their station buffet.

For an experience you’ll never forget, plan on visiting a booktown. These destinations also draw in huge tourist crowds since they serve as one-stop shops for people who want to find rare or vintage books at low prices. Check out the Jimbocho Book Town in Tokyo and get lost browsing in the area, which boasts nearly 400 independent bookstores. Don’t forget to wear comfy shoes and bring a huge bag for your haul. If you’re traveling to Argentina, stop by the Parque Rivadavia Book Market, a booktown where you can find used and new books, comics, records, and other antique items.

Independent bookstores are the “it” travel destinations for many tourists. Visit the establishments and booktowns mentioned above to find good reads, enjoy delicious food and drinks, and have the time of your life while you’re on holiday.

© Jennifer Mark, 2025.

Copyright Litigation in China: Some Interesting AI-Related Decisions from Chinese Courts

A wooden gavel resting on a circular base in front of a red backdrop featuring the flag of China.

Image: Shutterstock

These days just about any information in North America related to China, especially regarding intellectual property (IP), is highly negative. The narrative is along the lines of “China is an adversary with deliberately lax IP laws who has stolen and continues to steal our IP, etc.”. This characterization of China is reinforced by our political leaders (When asked during the Leaders’ debate what was the greatest security threat to Canada, Prime Minister Carney replied with one word. “China”). Donald Trump continues to have an obsession with China, the latest manifestation of which is the recent announcement that the US will revoke the visa status of an undetermined number of Chinese students currently studying in the US. (Over a quarter of a million students from China are currently studying at American colleges and universities, many simply seeking an alternative to studying in the hyper-competitive environment at home). The “China as IP thief” narrative is supported by government publications such as the annual Special 301 Report produced by the Office of the US Trade Representative (USTR) which this year had ten full pages on China. One excerpt will suffice to give you the flavour of the report. “In 2024, the pace of reforms in China aimed at addressing intellectual property (IP) protection and enforcement remained slow…Concerns remain about longstanding issues, including technology transfer, trade secrets, counterfeiting, online piracy, copyright law, patent and related policies, bad faith trademarks, and geographical indications.” Well, that covers the waterfront. One wonders how Chinese brands, innovators and creators manage to survive in such an environment.

This is not to dismiss the darker side of China’s long IP history. Have there been cases of industrial espionage involving China? Yes, certainly. There have also reportedly been more than 1200 intellectual property theft lawsuits brought by US companies against Chinese entities in either the US or China over the past 25 years. There is no question that IP protection in China is not all it could and should be, or that some Chinese companies and other entities have been aggressive in seeking to acquire IP by less than transparent means. But that is not the whole story. While the number of IP infringement lawsuits against Chinese entities over the years sounds like a lot, this business website estimates that the number of IP litigation cases globally totals around 12,000 annually. There are several thousand patent litigation cases alone in the US each year. A lot of US companies sue other US companies in the patent, trademark and copyright field. And Chinese companies sue Chinese companies.

In the past, Chinese IP laws had loopholes, were often weakly enforced and were dealt with by courts that had scant knowledge and training in IP matters. That is rapidly changing as China not only climbs the innovation ladder, but has come to dominate it in some areas, such as EV’s and EV batteries, cashless payment systems, renewable energy and others. It is rapidly catching up in generative AI. While this has been happening, Chinese courts have been producing some interesting and increasingly sophisticated decisions when it comes to AI and copyright. China–like other countries–is grappling with several aspects of this issue. There is the question of finding the right balance between protecting creators and innovators while using domestic creative works to spur AI training, development and research. Another element is the extent to which AI assisted or created works qualify for copyright protection. There is currently no Text and Data Mining (TDM) exception in Chinese law to allow AI training on copyrighted content nor is there a definitive interpretation as to whether content produced by AI can be protected by copyright. However, several court decisions, which we examine below, have shed some light on this complex question.

Dreamwriter Case

In one of the earlier cases, which I wrote about back in 2020, (the Dreamwriter case), a Chinese court (in Shenzhen) ruled that an automated article written by an AI program (Dreamwriter), created by Tencent, which had been copied and published without permission by another Chinese company, Yinxun, was nevertheless subject to copyright protection because it met the originality test through the involvement of a creative group of editors. These people had performed a number of functions to direct the program, such as arranging the data input and format, selecting templates for the structure of the article, and training the algorithm model. The article was ruled to be a protectable work, and Yinxun was found to have infringed.

Li v Liu Case

The relatively loose interpretation regarding the degree of human engagement required to protect the output of an AI program in the Dreamwriter case has been supported by other Chinese courts. In the prominent Li v Liu case, the Beijing Internet Court ruled that Mr. Li, who had created the image of a young woman using the AI program Stable Diffusion, had provided “significant intellectual input and personalized expression” in creating the image through a series of prompts. As explained in detail by this article from Technollama, the prompts (along with a number of negative prompts) were sufficient for the court to decide that Li had met the standard of creative expression.

These were Li’s prompts;

“ultra-photorealistic: 1.3), extremely high quality highdetail RAW color photo, in locations, Japan idol, highly detailed symmetrical attractive face, angular symmetrical face, perfect skin, skin pores, dreamy black eyes, reddish-brown plaits hairs, uniform, long legs, thighhighs, soft focus, (film grain, vivid colors, Film emulation, kodak gold portra 100, 35mm, canon50 f1,2), Lens Flare, Golden Hour, HD, Cinematic, Beautiful Dynamic Lighting”

Liu, who had been sued by Li for using the AI generated image without authorization, was found liable for infringement and fined 500 CNY (about USD75).

At that time (late 2023), this decision was considered ground-breaking for image-based works given the position of the US Copyright Office (USCO). USCO had denied copyright registration to several generative-AI created image works owing to insufficient human creativity. (see If AI Tramples Copyright During its Training and Development, Should AI’s Output Benefit from Copyright Protection? Part One: Stephen Thaler and Part Two: Jason Allen). Since then (in January of this year) the USCO has taken a more nuanced position, permitting registration of an AI assisted work (an image called A Single Piece of American Cheese, created by graphic artist Kent Kiersey). Although Kiersey used InvokeAI to create the work, in the view of the US Copyright Office, sufficient human creativity was involved through the “selection, coordination, and arrangement of material generated by artificial intelligence”.

Plastic Chair Case

If China has been in the forefront of acknowledging that human control over AI tools used to generate content qualifies the works for copyright protection, a more recent case has reset the pendulum somewhat. As recounted in this blog by UK-based market research firm IAM, very recently a court in Jiangsu Province dismissed a copyright infringement claim brought by a designer against a company that manufactured, without a licence, children’s plastic chairs based on her AI-based designs. The designer, Feng Runjuan, had created three designs using the AI program Midjourney and posted them to social media, including the prompt she had used. Her prompt was “Children’s chair with jelly texture, shape of cute pink butterfly, glass texture, light background“. The company manufacturing the chairs approached Feng to license the designs but was unable to reach an agreement with her. They then went ahead anyway (without a licence) to produce chairs that bore some similarity to the original designs, using Feng’s original prompt with some tweaks. Feng sued. There was little doubt that the chair manufacturing company had used her prompts to produce the chair design, but the key question was whether the AI generated designs qualified as original works meriting copyright protection.

Feng was unable to reproduce the original images using her prompts owing to the randomness of the AI program. This suggested to the court that it was the AI program making the design decisions, not the person providing the prompts. As outlined in the IAM article referenced above, the court held that a user must provide a verifiable creative process that shows the:

  • adjustment, selection and embellishment of the original images by adding prompts and changing parameters; and
  • deliberate, individualised choices and substantial intellectual input over the visual expression elements, such as layout, proportion, perspective, arrangement, colour and lines.

It concluded that the original images did not qualify as original works and thus they could not be protected. Feng’s lawsuit failed.

So now we have a situation where one Chinese court has ruled that the prompts generated by Li in what I will call the “young girl image” case constituted sufficient intellectual input and personalized expression to qualify for copyright protection, even though the actual image was generated by an AI program, whereas another court has denied copyright protection for a work also produced with prompts, albeit simpler and far fewer. The difference seems to be the degree of human involvement in creating the prompts, although the fact that Ms. Feng in the plastic chair case was unable to reproduce the original images seems to have also weighed against her. As anyone who has ever used an AI program will know, identical prompts will produce different images owing to the way the program works. Does that disqualify the artist? I would hope not, but the degree of control is clearly a key factor, as both the rulings of Chinese courts and the recent USCO decision to register the work A Single Piece of American Cheese would seem to show. Both Chinese court decisions are defensible, demonstrating careful and reasoned consideration, and are helpful in establishing parameters for use in determining whether works are AI assisted or AI created.

Ultraman Case

Another area where Chinese courts have left their mark is on the topic of AI liability for copyright infringement. In what is known as the “Ultraman” case, a Chinese court (the Guangzhou Internet Court, upheld on appeal by the Intermediate Peoples’ Court in Hangzhou) delivered a ruling of contributory infringement against a company that provided AI generated text-picture services through its website. The complainant was the Chinese licensee of the Japanese company that owns the rights to the cartoon character Ultraman. When the defendant’s website (effectively a chat-bot capable of generating AI images at its users’ request) was asked to generate an Ultraman-related image, it generated a character that appeared to be substantially similar to the claimant’s licensed Ultraman. The court had to decide whether the defendant had infringed the plaintiff’s reproduction and derivative production rights and if so, what remedies were applicable.

In its ruling the court decided that even though the defendant did not directly infringe the licensee’s rights, its failure to exercise a reasonable duty of care to prevent infringements (for example, by cautioning users or providing adequate filtering or blocking mechanisms), rendered it liable for contributory infringement. It was ordered to compensate the claimant the amount of CNY 10,000, about USD1500 (considerably less than the damages sought of CNY300,000). Here we have another sophisticated and well reasoned decision, which appears to have been the first instance globally of recognizing the liability of an AI platform for contributory copyright infringement. It does not create any legal precedents but is a useful contribution to the emerging debate.

These cases well illustrate the growing sophistication and complexity of IP rulings in China and are reflective, in my view, of an economy that is rapidly moving up the innovation and creativity ladder. When it comes to IP protection in China, is the glass half empty or half full? I would argue the latter, even though this may not be the most popular interpretation these days. One thing that I am willing to predict with certainty is that we can expect more interesting and thoughtful IP legal decisions from the Chinese legal system in the months and years ahead.

© Hugh Stephens, 2025. All Rights Reserved.