Month: July 2025

Bespoke Bookstore Tourism? Why Not? People Visit Gardens, Museums and Battlefields

Interior view of an ornate library with high wooden archways, numerous bookshelves, and visitors milling about. Busts line the walls, highlighting the historical significance of the space.

The Old Library: Trinity College, Dublin (Photo: Author)

Last month I published a guest column (Literary Pilgrimages: How Iconic Independent Bookstores are Becoming Travel Destinations) volunteered by reader Jennifer Mark who discussed how independent bookstores (or “bookshops” if you are from the other side of the Pond) are adding to their offerings to attract customers and survive. The enticements include offering a range of refreshments from coffee and tea with scones, to wine and beer, as well as providing interesting venues that are destinations in themselves. The writer’s interest had been piqued by my recent blog post highlighting the “Harry Potter” bookstore in Porto, Portugal, Livraria Lello, which my wife and I visited earlier this year. Lello, aided by a somewhat tenuous connection to the Boy Wizard given that JK Rowling lived in Porto for a short time while writing the first of the Potter books, has become a tourist attraction in its own right. It is even able to charge admission, a welcome new revenue stream. Jennifer took this a step further and wrote about the culinary attractions of some of the most interesting bookstores in the US, UK and Australia, and referenced booktowns in Japan and Argentina. It made me realize that bookstore tourism is definitely a “thing”. If you Google it, a cornucopia of information will spill forth. Not surprisingly, (since there is not much that is “new” these days), this concept has been around for a while.

It seems the idea of arranging customized tours to select bookstores for booklovers was first commercialized by Pennsylvania-based writer Larry Portzline, who wrote a book about it back in 2004. (Bookstore Tourism: The Book Addict’s Guide To Planning & Promoting Bookstore Road Trips For Bibliophiles & Other Bookshop Junkies). According to Portzline’s website;

“I first began leading “bookstore road trips” to New York City in 2003. I’d load 50 people on a chartered bus in Harrisburg, PA, and we’d spend the day visiting the 20 or so indie bookshops in and around Greenwich Village…I promoted the concept with a website, a blog, podcasts, and even a how-to book….Bookstore Tourism eventually grew into a grassroots effort in various locations around the U.S. It was never huge, but there was a nice ripple of interest and support.… I think Bookstore Tourism could rise again…It offers nothing but benefits: to the organizations that sponsor them, to the bookselling and travel industries, to literacy and reading efforts…”

Well said, Larry.

It looks as if Bookstore Tourism is back, whether it means visits to famous bookstores around the world or trips to “booktowns”, where no one bookstore is the destination but rather the collection of browsing options available, usually in a smaller but quaint and well situated (i.e. not too far from major population centres) town. The “book town” concept appears to have been first conceived in the 1970’s in Hay-on-Wye, Wales. It all started with a bookseller named Richard Booth in 1962, who opened his first bookstore in Hay-on-Wye’s old fire station. He subsequently opened six bookstores in the town, one in a ramshackle Norman castle, others in old warehouses. This critical mass led to others to open their own bookshops, over 30 in all. After becoming known as the world’s first booktown, Hay-on-Wye’s role as the place for literary mavens to gather was further cemented by the launch of its well known annual Literary Festival, which began in the late 1980s and continues to this day. It has provided new economic life for a small Welsh village of just 1500 residents. The idea has caught on as a means of revitalizing small towns that may have previously had an industrial base (one industry towns where the industry is long gone) but are now looking for new ways to attract tourists and visitors. In fact, there is even an association of booktowns, which, interestingly, does not seem to include Hay-on-Wye although it attributes the idea to Booth.

While there are all kinds of innovative ideas out there to attract patrons to bookstores and booktowns, it is still a challenging environment for many in the industry. A recent blog reported that there are now about 20 bookstores in Hay-on-Wye; at one point there were as many as 38. There was the onslaught of online booksellers, led by Amazon, that was supposed to kill the industry. It didn’t, and the innovation and entrepreneurialism of independent booksellers helps explain why, but it is still a struggle with many ups and downs. In the UK, the Bookseller.com reports that the number of independent bookshops slightly declined in 2024, continuing the previous year’s downward trend but still well above the 2016 low. Despite the small decline, almost 50 new independent bookshops opened in 2024 in Britain. In the US, the story is slightly different. According to this AP article, the number of members of the  American Booksellers Association has doubled since 2016, to almost 3000 members, but as Jennifer Mark pointed out in her blog on Literary Pilgrimages, store owners have had to be creative to survive.

In Canada, it appears that indies are hanging on but face a tough market, including potential new challenges from threatened Canadian tariff retaliation against Donald Trump’s tariffs on Canadian goods. The idea of creating a booktown in Canada has also been tried. At one point, Sidney, BC, just north of Victoria, had a dozen book outlets, several of them owned by the same couple, Clive and Christine Tanner. Sidney was also marketed as a book town. Those days are past, and there are now just a couple, although Sidney continues to be a great place to visit for other reasons.

But what about bespoke bookstore tourism for well-heeled book lovers who have already been on safari, visited Antarctica and done all those Viking river cruises? After all, there are specialized garden tours, museum tours, art gallery tours, history and battlefield tours, culinary (foodie) tours, wine tours (of course), but apparently no bookstore tours.  I tried to find a travel agency that offers tailored tours for booklovers but couldn’t identify any. Larry Portzline’s idea has never really taken off. Now there is a travel niche to be exploited! For now, booklovers may have to settle for a virtual tour. A good one can be obtained from “1000 Libraries”, a publisher that is marketing a glossy coffee table took featuring “The Most Beautiful Book Places in the World”. (The book looks pretty good on the website but I have not actually seen one; this is not a paid announcement).

Maybe virtual bookstore tourism is not such a bad alternative. After all, much of the pleasure of a book is to be able to visit places and enjoy stories from the comfort of your armchair/deckchair/chaise longue or wherever you choose to read. However, buying that book in an interesting place and having a memorable experience doing so adds to the enjoyment. A book can be forever and if you have the added benefit of a sight, sound, taste or smell sensation when buying it, I can guarantee that it will mean even more to you.

© Hugh Stephens, 2025. All Rights Reserved.

“You’ve Got Malware!” Wonder Why?

Detailed Academic Study of Five Southeast Asian Countries Clearly Demonstrates Close Correlation Between Piracy Sites and Malware Infection

A person sitting at a wooden table using a laptop, with a malware warning displayed on the screen.

Image: Shutterstock

You won’t get a message like this announcing you’ve just downloaded malware. Instead, you will find out when unauthorized payments start showing up on your credit card statement, or worse, you find that your bank account has been drained or you’ve received a ransomware threat, suddenly locked out of your accounts. No one knowingly downloads malware, but it is a proven byproduct of content piracy. Although a global threat, malware penetration is particularly problematic for emerging economies, like those in Southeast Asia working to build viable local content industries and creating safe digital platforms to grow their economy. A recently released study (“Consumer Risk from Piracy in Southeast Asia”) authored by Macquarie University professor Dr. Paul Watters, concludes that the risk of downloading malware in the form of trojans, worms or keyloggers, ransomware and cryptojacking, phishing and credential theft, spyware, data exfiltration and network compromise is up to sixty-five times higher when using piracy versus legitimate sites.

Watters examined the prevalence of malware downloading and piracy in five Southeast Asian countries, Vietnam, Indonesia, Malayia, Thailand and Singapore. He examined various types of piracy sites, including illicit streaming, streaming sports piracy, P2P networks, scam piracy sites (sites masquerading as providers of legal services or content), IPTV piracy subscription services, as well as anime and manga piracy sites. The relative cyber risk per piracy service type in the five countries studied in 2025 ranged from a high of sixty-five times the risk of using legitimate services for P2P networks to figures in the low to high thirties for streaming and IPTV services to fourteen percent for manga sites. (see table below).

Bar graph illustrating the relative cyber risk by piracy service type in Southeast Asia for the year 2025, comparing risk levels for P2P networks, scam piracy portals, streaming services, IPTV services, anime sites, and manga sites.

Watters points out that, “Digital piracy in Southeast Asia extends far beyond lost revenues, reshaping cultural norms, creative ecosystems and regional economies.”  While there are economic motivations for piracy, such as unwillingness to pay for content that can be obtained for “free”, social consensus (where piracy is normalized within a community) significantly influences individuals’ intentions to engage in piracy. Social and cultural norms rather than differences in legal frameworks, copyright tradition, or economic factors have been shown to be the most powerful predictors of piracy behaviour among students. These unhealthy trends, once normalized, undermine the basis for building a stable digital economy where business models are based on the normal expectation of receiving a reasonable return on investment for products or services provided. Also, in the case of Southeast Asian countries, they pose a long-term threat to the preservation and projection of regional cultures. If local content producers cannot receive fair compensation for their investment in production, there is less incentive to produce content based on local cultural heritage. And it is not just local cultural industries that suffer. The diversion of revenues away from legitimate businesses affects government revenues, having an impact on the full range of services offered to citizens by governments, while undermining government efforts to build a trusted digital economy so essential to SMEs and others.

While the figures documenting cyberthreats are startling and should give users of piracy sites pause to weigh the consequences of accessing “free” content, it is also incumbent on governments to take requisite action to dissuade their citizens from indulging their own worst instincts. Watters’ study highlights some of the measures that Southeast Asian governments are already engaged in, such as implementing comprehensive national cybersecurity strategies. All the countries in the region have criminalized unauthorized access, malware distribution and online fraud and have engaged in education and international cooperation. However, this is clearly not adequate in dealing with the significant problem of malware penetration.

Watters suggests a number of additional actions that could be taken, depending on the specific risk factors by country. These include revisiting domain-blocking frameworks to incorporate dynamic copyright-based site blocking injunctions updated in real time rather than relying on static “blacklists” (the pirates are nimble and often manage to stay one step ahead of the blocking process). There are specific recommendations for actions by ISPs and enterprise network operators. There is also the suggestion that regulators introduce minimum security standards for consumer electronics to combat the risk presented by Illicit Streaming Devices (ISDs) and user-installed P2P/streaming clients.

It is clear from Watters’ report that more needs to be done by Southeast Asian governments to protect consumers and reduce their exposure to the elevated cyber risk from accessing piracy platforms, a risk thoroughly and professionally documented in this study. The need is urgent, based not only on the demonstrated level of malware penetration through piracy sites but also the long-term negative impact such risks have on individual consumers. A corollary benefit is that combatting patronage of piracy sites will have a positive impact on generation of local cultural content and build out of digital industries, while strengthening the legitimate economy and government revenues.

As has been proven elsewhere, a comprehensive anti-piracy program focusing on dynamic copyright-based site blocking (with appropriate transparency and redress mechanisms), strengthened law enforcement expertise in combatting cyber-crime, and continued education and public awareness campaigns tailored to local conditions will enable governments in Southeast Asia to turn the tide on cyber security threats while at the same time enjoying the many economic and cultural benefits of reduced piracy among their citizens.

Southeast Asian consumers are entitled to expect that when they engage on the Internet, they can do so safely without fearing the consequences of malware attacks. While they need to take some responsibility for their own actions, it is incumbent on their governments to create a safe space through adequate regulation and enforcement. Professor Watters’ study provides not only a detailed analysis of what is happening with respect to consumer risks from piracy, but a roadmap of how to effectively deal with the problem.

© Hugh Stephens, 2025. All Rights Reserved.

Echovita is Still Going Strong: The Sleazy (but Apparently Legal) Business of Monetizing Obituaries Without Consent

A close-up of delicate white flowers in bloom, alongside softly glowing white candles, creating a tranquil and reflective atmosphere.

Image: Shutterstock

The phone call came out of the blue. It was from a distressed family member who had just suffered a close and tragic personal loss. That in itself was obviously difficult enough to deal with. What was really upsetting was the unauthorized dissemination of that heart-rending event through Echovita, (or Echovita Canada) including postings on Facebook which, to add insult to injury, included inaccurate information. I wrote about Echovita last fall (Distasteful Yes, But Not Copyright Infringement: Publishing “Basic Fact” Unauthorized Obituaries is Going Strong (And Often Getting it Wrong). The caller had seen this post and was reaching out for advice and help. Unfortunately I was not able to provide much of either because, it seems, having learned its lesson through its predecessor operation, Afterlife, which was fined $20 million for copyright infringement and promptly went out of business, Echovita (which is based in Quebec) manages to stay just within the law. Nonetheless, its business model preys on the bereaved and from a moral perspective is about as sleazy a business as one can imagine. Moreover, it frequently gets some of the facts wrong because it is probably scraping hundreds if not thousands of obituaries daily and uploading data which is not verified or checked by anything other than a bot. And then it puts the onus on the bereaved family to reach out to correct the error, which it undertakes to do–within 3 days! If you Google “Echovita” you will see that the internet is rife with complaints and negative comments about this company, including from individuals on Reddit and from legitimate funeral homes warning consumers not to do business with them. Here is but one example, drawn from Facebook;

“A website called ECHOVITA and other third-party websites incorrectly rewrite obituaries that are posted on funeral home websites and then urge people to make a donation. The family does NOT benefit from this, so please DO NOT donate money unless you are legitimately on a funeral home website. If you are searching the internet for an obituary, the name may appear on different websites. Always look for the obituary hosted by the funeral home that is coordinating the services”

In other words, avoid Echovita. However, if you have lost a loved one, it is almost impossible to avoid them since Echovita doesn’t ask anyone’s permission for what it is doing, scraping authorized obituaries, extracting the so-called “public information” from them, and then posting an obituary rewrite alongside ads for various memorial offerings (flowers, planting trees, memorial books etc,) as well as rolling ads for various services. Needless to say, funeral homes don’t like these “freeriders” because what they are doing upsets their clients and might even be cutting into their own revenue for follow up services. As a result the Bereavement Authority of Ontario, a funeral industry regulatory body, has called out Echovita in a “Consumer Alert” published earlier this year. While it gets lots of negative publicity and media “exposes”, like this one recently on CTV, this doesn’t deter Echovita’s owners because they are basically chasing quantity over quantity. If they harvest enough obituaries and flood the internet with them, there will be enough people who believe they are dealing with the genuine obituary and will use the Echovita platform to order flowers and other services thorough third party suppliers (like Blooms Today—which itself offers very questionable service if you believe online reviews) allowing Echovita to turn a comfortable profit. However, maybe if enough people boycotted them they might go away? One can always hope.

Given the ingenuity that people display when trying to extract revenue from the internet through Youtube, it is not surprising that a Youtube version of obituary freeriding also exists. As reported in Wired, there is a fairly recent phenomenon on Youtube of videos featuring men reading obituaries using information harvested from funeral home websites, sometimes using voiceovers of “funereal” images like candles, sometimes just reading deadpan. On occasion these low-quality videos promote direct sale of products but generally the object is to attract enough aggregate views to qualify for advertisement revenue sharing from Youtube. It’s morbid filler for the internet. What next?

Just as with Echovita’s business model, these videos avoid copyright infringement by extracting basic information (dates of birth and death, location of death etc) without using the full obituary or any visuals. As I explained in earlier blog posts, an obituary is often a creative work embodying original expression and is thus protected by copyright laws. It is the story of a person’s life, often written by a close relative or in some cases in advance by the deceased person themself. However, basic facts and ideas cannot be protected, only the expression of an idea based on those facts or ideas. The same is as true for obituaries as it is with news, and this is where the obituary harvesters enter the picture, picking up the unprotectable basic facts.

What can be done about it? Unfortunately, not a great deal except to contact Echovita to request that an unauthorized obituary be either taken down or corrected. But be careful in doing so because if, in the process of dealing with Echovita, you create an account you are agreeing to their Terms of Service which gives them rights to use your data. You can email them without creating an account but at least one Reddit listing stated that in order to approve the takedown request, you have to click on an Echovita link which then gives Echovita access to your data. Whether this is true or not, I can’t say because fortunately I have not been in the position of having to opt out of Echovita’s “services”.

Echovita encourages people to use their website to post authorized obituaries and also provides other information such as listings of funeral homes and a searchable database. This is all in an attempt to appear legitimate and drive traffic but their basic business model is based on unauthorized scraping of basic obituary information off other websites, including Legacy.com, another obituary-based business that I wrote about recently (Obituaries and Copyright: If You Publish an Obituary in the Globe and Mail (and many other papers), Be Prepared for Legacy.com and its Upsell Business Model). While Legacy.com also profits from sales of memorial items associated with obituaries of individuals, at least it is based on consent as it draws its content from obituary listings in newspapers where those placing and paying for the printed obits acknowledge and accept that the paid-for newspaper listing will be put up on the internet and given a wider reach through Legacy.com. Often, they pay extra for the Legacy.com listing. In other words, it is an “opt-in” service, unlike Echovita where people not wanting their services are required to “opt-out”.

The solution to this scourge must surely reside in privacy rather than copyright law, or perhaps in some kind of consumer protection legislation. I hope so. But for now it seems that entities like Echovita have been able to find a sweet spot that enables them to continue to take advantage of a very personal and private part of life. It should be possible to respectfully and lovingly bid adieu to departed friends and family with dignity without crass commercialization. The last thing a bereaved family needs is having to deal with unwanted and inaccurate memorializations of their loved one by online businesses that see someone’s life as just another opportunity to generate a quick buck. Very sad.

© Hugh Stephens, 2025.

Canada and the Digital Services Tax (DST): A Humiliating Climbdown to Mark Canada Day

A black coffee mug with the text 'Proud Canadian from Eh to Zed' and decorative moose antlers, displayed on a shelf.

Photo: Author (in Agnew’s General Store, Wilberforce, ON)

Mark Carney’s first Canada Day as Prime Minister (Canada’s 158th) was supposed to mark a milestone; the end (or at least the beginning of the end) of federal-provincial trade barriers, the enactment of legislation to fast-track major projects, and passage of tax relief. All were achieved by the July 1 deadline, no small feat for just a couple of months in office. But just two days before Canada Day, one more action took place that Mr. Carney surely had not planned for when celebrating the birthday of the True North Strong and Free. This was the decision to rescind Canada’s Digital Services Tax (DST) late on Sunday, June 29, after a phone call between Carney and President Trump, subsequent to Trump’s post on Truth Social that he was immediately suspending trade and security negotiations with Canada owing to the imminent imposition of the tax. The DST, enacted into law in 2024 but with an 18 month “advance notice” period prior to actual implementation was supposed to go into effect on June 30, with taxes owing backdated to 2022. It was estimated that companies like Google, Amazon, Uber, META, AirBNB and others were on the hook for back payments of about two billion dollars, with more to come in future years. Not surprisingly, these companies weren’t happy and enlisted the support of the Trump Administration, as indeed they had sought support from Joe Biden earlier.

The DST was controversial in Canada. It was opposed by, among others, the Canadian Chamber of Commerce and the Business Council of Canada. Reasons for opposition were several; it was a tax that the tech giants and could and would pass on to consumers (Google has already imposed a 2.5% “digital tax” on its customers to compensate for the anticipated impact of the DST—don’t count on getting that money back), but the main argument against the DST was it painted a big target on Canada’s back. The DST had already attracted significant opposition from the tech industry in the US during the Biden Administration and was certain to provoke an unpredictable Donald Trump at a time when disruption on the Canada-US trade file was already endemic.

Is important to remember what the DST is and why it is on the tax agenda. It is not a sales tax, nor a tax on profits. It is a three percent tax on revenues generated in Canada from specific services provided by large digital companies that have global operations. In the case of Canada’s DST, companies that are “in scope” to pay the tax must earn a minimum of $20 million in revenues in Canada from specified services such as sales of digital advertising, online marketplaces, social media services or sale of user data (significantly, however, not content streaming), plus have worldwide income of more than 750 million Euros, about one billion CAD. Canada’s DST legislation was passed in 2023, came into force on January 1, 2024 (when taxes began accumulating retroactive to January 1, 2022), with first payments due on June 30, 2025. Due, that is, until it was announced, just a few hours before the payment deadline, that the legislation would not be enforced and would be ultimately rescinded. The fact that legislation duly passed by Parliament that had been in force for a year and half could be rescinded within 48 hours of the US President opposing it in a “tweet” says it all. How did Canada paint itself into this corner from which there was no reasonable escape?

It is important to note that the Canadian legislation, as well as DST legislation in other countries, does not specifically name US tech giants as the targets, (a small number of Canadian companies would have also been required to pay the tax in Canada) but targetting the “GAFAMs” (Google, Apple, Facebook, Amazon and Microsoft etc.) is the import of digital service taxes generally. This is because these are the companies that dominate the digital space–and which have been accused of manipulating profits to minimize and avoid paying tax in countries where their revenues are generated. It is argued that having disrupted the business environment (by upending the advertising market, for example), the companies should at least contribute tax revenues in the jurisdictions where they have a digital presence. It is no secret that most of these companies have exploited the fact they have little or no physical presence in many of the countries where they generate significant revenue. Although headquartered in the US many of them have set up offshore operations to conduct their global business, ensuring that their operations in third countries are barely profitable. This allows them to pull back the proceeds to the low-tax offshore jurisdiction (like Ireland) from where they ostensibly conduct international operations.

Profitability is reduced by legal techniques such as charging high fees to the local subsidiary for its use of the intellectual property in the technology platform, thus ensuring that profits are attributed back to the office registered in the tax shelter location. It is no accident that if you book accommodation through AirBNB in Canada, your payment goes to AirBNB Ireland, 8 Hanover Quay, Dublin. Your refund, if any, comes from the same source. The Library of Parliament published a detailed research paper on the tax avoidance phenomenon in 2020. To counteract these manoeuvres governments have deployed various measures to plug the loopholes. One of these is a tax on revenues instead of profits. Note however that it is a blunt instrument because it captures the just and the unjust alike. A company may have low profits for a variety of reasons, such as being in start up phase, not just because of tax avoidance. Additionally, it is normal when DSTs are applied that no credit is provided for other taxes paid, disincentivizing good tax behaviour.

Be that as it may, the DST is one way for governments to fight tax venue shopping by multilateral corporations engaged in digital trade, although it is not the preferred way of dealing with the problem of tax avoidance. Since 2013 the OECD, ostensibly with US cooperation, has been trying to find a multilateral solution that would provide for an agreed reallocation of digital revenues, as well as application of an alternative minimum tax. However, since this could result in it losing out on some revenues that would be dispersed to other countries, the US has slow walked the process. While the Biden Administration agreed in principle, it did not submit the OECD “Global Tax Treaty” to Congress for fear of defeat. On assuming office in 2025, Donald Trump tore up all previous US commitments to the OECD tax reform process.

In 2021, an interim agreement was reached. The US agreed to continue to engage in the treaty negotiations provided that other countries contemplating introduction of a DST agreed to pause implementation (ie. there would be a moratorium on the introduction of new DSTs) pending conclusion of a final agreement. However some countries, notably Austria, France, Italy, Spain and the UK, had already implemented a DST and were therefore “grandfathered”. Thus, they enjoyed the tax revenue from digital companies all the while the OECD was dithering over next steps. Canada looked on with envy.

Canada appears to have felt it missed the boat by not introducing legislation earlier (it was first mooted by the Trudeau government in 2019), which would have allowed it to benefit from grandfathering. The Canadian position was that it would introduce legislation only if the OECD treaty process did not move forward as planned (which is what happened in 2023, when it stalled). While agreement was not reached, there was broad consensus on extending the DST moratorium. Canada opposed an extension, the only OECD member to do so. It then proceeded to introduce its own DST legislation, backdated to 2022 (to capture the revenue it thought it should have been receiving all along), with collection including arrears to begin on June 30 of this year. No doubt the anticipated $2 billion in revenue had already been “booked” by the Department of Finance against the budget deficit.

On one plane—the fiscal plane–this all makes sense. However, looked at from the perspective of Canada-US trade relations, it was asking for trouble. Why be the “tall poppy” when you could stick with the pack and wait out the process, especially given the asymmetry in Canada-US economic power and Canada’s dependence on the US market? Why impose an ill thought-out retroactivity provision? Why be the threatened breach in the DST dam, inviting a disproportionate response to head off others who may have the same idea? Add in the re-arrival of Donald Trump on the political scene and you have a crisis waiting to happen.

Although the implementation of the DST at the end of June, 2025 had been well publicized for a couple of years (and was the subject of a USMCA/CUSMA dispute settlement case under the Biden Administration), it seems to have only caught Donald Trump’s attention on the eve of the scheduled implementation date. Coming right in the middle of an agreed 30-day self-imposed window to reach a bilateral agreement, a timeframe agreed between Carney and Trump at the G7 summit earlier in June, Carney had no choice but to back down. The DST was not the hill to die on.

How did the government allow itself to be so backed into a corner that craven capitulation was the only reasonable outcome? Why not simply suspend the DST’s implementation for a few weeks, kick the can down the road and roll the DST into the bilateral agreement? At worst, use it as negotiating coinage. My guess is that it would likely have ended up on the cutting room floor but at least that concession could have been potentially offset against some other issue of benefit to Canada in the new agreement. What has happened now is that Canada has given up a key card simply for the privilege of being able to stay at the table with the US. What is to stop Trump from announcing next week that something else has to go or else negotiations will end? With his zero-sum approach to negotiations, he could in theory continue to pry concessions out of Canada item-by-item well before any deal is reached, if one is reached at all. It used to be that “nothing is agreed until everything is agreed”. This has now been changed to allow the dominant partner to cherry pick concessions just for the “concession” of keeping talking. We have gone from “elbows up” to “hit me”.

This is the lesson, if any was needed, as to what happens when you are dealing with someone like Donald Trump who has never heard of “principled negotiation” (defined by Google’s AI Overview as “a collaborative approach to conflict resolution that focuses on finding mutually beneficial solutions while preserving relationships”) or “win-win”. It’s all about raw power and today’s deal.

No sooner was the announcement made about rescinding the DST than the pundits jumped in. The University of Ottawa’s Michael Geist crowed that the government had “caved” (on this he was right) and went on to point out all the times in the past he had warned the government this would happen. If there was ever an “I told you so” moment, this was it. (Gee, Michael, if only they had listened to you). He offers the obvious point that the US tech industry doesn’t like paying taxes, especially to little old Canada, so be careful how hard you poke the bear, but offers no solution as to how to deal with the tax avoidance issue. Mind you, as far as I can tell, there has never been much daylight between Dr. Geist’s positions and those of the US tech industry, so I am not surprised. On the other hand, Canadian nationalists like former Foreign Minster Lloyd Axworthy (a member of the same Liberal Party as Mark Carney no less!) called it “forelock-tugging diplomacy”. Commentators Perrin Beatty and Fen Hampson appropriately described it as an “own goal we could do without”.

Personally, I had hoped for a better strategy from this new government. There is no need to gratuitously pull the eagle’s feathers but at the same time, recognizing reality, ensure that when you pick a fight, you don’t find yourself alone in the corner. Or if you have to be pummelled, make sure it is about something fundamental, not just stubbornness over the means of bringing the tech giants to heel. Canada still needs to deal with both disruptions to Canada-US goods and services trade as well as how to appropriately regulate and tax digital services. Caution and realism are important watchwords, but so is sovereignty.  Let’s learn a lesson from this sad chapter and do better next time.

© Hugh Stephens, 2025. All Rights Reserved

Hold the Champagne: The Two AI Training/Copyright Decisions Released in the US Last Week Were a Mixed Bag for AI Developers

Illustration of a champagne bottle being popped, enclosed in a red circle with a slash indicating 'no champagne'.

Image: Shutterstock.com

Last week I wrote about the questionable ethics of META’s use of pirated content to train its AI model, Llama, pointing out the ethical issues involved with META’s admitted use of pirated online libraries, such as LibGen (Library Genesis), to feed content to Llama for training purposes. This is quite apart from whatever legal issues that may arise from the widespread practice of ingesting copyrighted content for AI training by making an unauthorized copy from any source (such as a legitimate library, through purchase of a single copy of a work, or from publicly available internet sources, for example) not to mention the additional element of taking that content from pirate sources. The day after that blog was posted the first of what will be a series of legal decisions in the US regarding cases brought by authors and copyright holders against AI companies was issued, followed by another a day later. Both cases were heard in the Northern District of California, in the same San Franciso court house, but handled by different judges.

I updated last week’s blog to make reference to the Bartz v Anthropic case (hereafter “Anthropic”), but given the importance of that decision, combined with a decision released in another California court room a day later (Kadrey et al v META), these cases merit further exploration–especially since they were widely trumpeted by AI advocates as opening the door to unauthorized use of copyrighted content for AI training on the basis of “fair use”.

Fair use is the complex legal doctrine used in the US to determine exceptions to copyright protection. US readers are well aware of the intricacies and idiosyncrasies of fair use but for those not overly familiar with how it works, here is a short summation I drew from a blog post on fair use vs fair dealing that I wrote a few years ago.

In the US context, fair use is an affirmative defence against copyright infringement and is determined by the courts on a case by case basis, judged against several fairness factors (purpose and character of the use, the nature of the work copied, the amount and substantiality of the amount of the work used, and the effect of the use on the value of the original work)… Fair use is not defined by law. Some examples are given in US law of areas where the use is likely to be fair (criticism, comment, news reporting, teaching, scholarship, research) but these are illustrative and not exhaustive. In short, it is the courts that decide. This in turn can lead to extensive litigation as to what is and is not fair use, and it is worth noting that different judicial circuits in the US have at times come up with conflicting interpretations.

Or, for that matter, two different judges in the same circuit delivering decisions just days apart on similar issues but with some significantly different outcomes, as we saw last week (although in these cases both found fair use by AI developers with regard to the copyrighted works at issue).

On the Anthropic case, US District Judge William Alsup ruled, on summary judgement, that the use of copyrighted works for AI training, even though done without authorization, is highly transformative and does not substitute for the original work (“The technology at issue was among the most transformative many of us will see in our lifetimes”). It thus qualifies, according to Alsup, as fair use because the transformative nature of the use overrides or swallows the three other fair use factors, including the important fourth factor (effect of the use on the value of the work). He notes there was no allegation that the output of Anthropic’s model, known as “Claude”, produced content infringing the works of the plaintiffs. However, Judge Alsup then went on to consider the legality of Anthropic’s actions to download more than 7 million works from pirate libraries (such as Books3, Library Genesis and the Pirate Library Mirror) to constitute its reference library, which it initially planned to use for AI training. He concluded this was a prima facie case of copyright infringement, whether Anthropic intended to use some or all of the pirated works to train Claude or not. (“Anthropic seems to believe that because some of the works it copied were sometimes used in training LLMs (Large Language Models), Anthropic was entitled to take for free all the works in the world and keep them forever with no further accounting “.) Damages, to be decided at trial, could be substantial. Alsop did not, however, rule explicitly on whether or not the use of pirated works for AI training purposes could be a fair use.

Because of the controversial nature of Alsup’s findings on transformation and fair use, there is no question that this case will be appealed. While there have been many criticisms of the fair use elements of Alsup’s ruling, a particularly clear and trenchant analysis was put forth by Kevin Madigan of the Copyright Alliance (Fair Use Decision Fumbles Training Analysis but Sends Clear Piracy Message).

The second case last week to reach the decision stage was Kadrey et al v META. In this case District Judge Vince Chhabria found that META’s use of the works of the plaintiffs, thirteen noted fiction writers, to train its AI model (“Llama”) was also fair use. Chhabria, like Alsup, found that META’s use was transformative on the first fairness factor dealing with the purpose and character of the use (“There is no serious question that Meta’s use of the plaintiffs’ books had a “further purpose” and “different character” than the books—that it was highly transformative.”) but unlike Alsup, Chhabria put much greater emphasis on market harm, (the fourth fairness factor dealing with the effect of use on the value of the work) suggesting that it could be determinative. Unfortunately for the plaintiffs, however, Chhabria considered their arguments with respect to market harm to be unconvincing. There was no evidence that Llama’s output reproduced their works in any substantial way or substituted for the specific works at play nor was there evidence, according to the judge, that the unauthorized copying deprived the authors of licensing opportunities.

Chhabria suggested that a far more cogent argument would have been that use (unauthorized reproduction) of copyrighted books to train a Large Language Model might harm the market for those works by enabling the rapid generation of countless similar works that compete with the originals, even if the works themselves are not infringing. In other words, causing indirect substitution for the works rather than direct substitution. This is the theory of “market dilution”, which was also put forward speculatively by the US Copyright Office in its recent Pre-Publication Report on AI and copyright. Since this wasn’t presented as an argument, Chhabria could not rule on it but in effect he is inviting future litigants to pursue this line of argument, noting that his decision on fair use relates only to the works of the thirteen authors who brought the case.

The clearest way to illustrate his line of reasoning is to quote directly,

“In cases involving uses like Meta’s, it seems like the plaintiffs will often win, at least where those cases have better-developed records on the market effects of the defendant’s use. No matter how transformative LLM training may be, it’s hard to imagine that it can be fair use to use copyrighted books to develop a tool to make billions or trillions of dollars while enabling the creation of a potentially endless stream of competing works that could significantly harm the market for those books”.

This editorializing, known in legal circles as obiter dicta, is not binding nor precedential, yet will undoubtedly have some influence given Chhabria’s stature. It is likely that one of these days Judge Chhabria will have the opportunity to put these theories into practice when ruling on a similar case, but one where the plaintiffs have made a better case for market harm. He has provided them a roadmap.

While these two cases have fired the first shots in what is going to be a lengthy war, they do not seem to be dispositive. There are enough caveats and nuances to be able to conclude that the AI developers are far from being out of the woods. Both “victories” have a sting in their tail, especially Judge Alsup’s finding on piracy. Neither copyright advocates nor AI developers should be breaking out the champagne just yet. But whichever way it turns out, there will be some sure winners; the lawyers for each side.

© Hugh Stephens, 2025.