Technology
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I think it is probably more about how Books3 is and was always the full content of a torrent site for books.
Fair Use is all fine and good but its very telling that these companies are happy to justify piracy when its convenient for them and then oppose it when it is not.
It is rather hypocritical and there is also questions whether Fair Use can apply to a non-human. People generating art and text with it are in a weird grey area, because on one hand it can be argued they are using a tool, but on the other, the results are so random: how much influence does the user actually have over what they create? If the answer is "not much influence" then the tool is creating the art, not the person. At that point, is it really reasonable to argue "fair use?"
Depending on the jurisdiction's particular laws, there are places where downloading pirated material is perfectly legal and it's just the uploading of the pirated material that's a breach of copyright. In those places you can legally download a pirated torrent if your upstream speed is zero.
Furthermore, I expect it's an open question whether the "they got this text illegally" thing will mean "therefore the stuff they used it to make is also illegal." It might be that they can sue for the piracy and get a payout for that, but that the AI model itself remains just fine.
Interesting times, the laws were very much not written with this stuff in mind.
Not sure if you just worded it wrong or you're confusing piracy with copyright.
Anyway, piracy involves circumventing a protection system to get something for free instead of paying for it. DVDs for example not only contain copyrighted material, they also have copy protection systems to avoid unauthorized distribution, downloading is illegal as much as uploading since you're getting a copy on which the protection system has been broken on purpose.
Copyright violation, on the other hand, happens only if you publish something you didn't make without the authorization of the original author, so downloading copyrighted material - that doesn't have any protection system - is perfectly legal, uploading it is not.
Bibliotik, the site Books3 is from, regularly updates and has torrents to software specifically for removing the copy protection from ebooks.
I wonder if part of the lawsuit is about the fact that most of the books on Bibliotik had their copy protection removed before being uploaded.