Stop assuming US fair use rulings apply in New Zealand

The defence that works in America stops at the border

New Zealand’s copyright review has walked straight into the fight over whether AI companies can train models on other people’s work without paying for it. And the country starts from a very different legal position than the United States, one that already favours the people who create content, not the companies scraping it.

The centrepiece of the global debate is Bartz v Anthropic, one of the first major US cases on AI training. Anthropic admitted downloading more than seven million books from pirated sites, with more than 400,000 authors and 15,000 publishers represented as plaintiffs. For the pirated material, Anthropic settled for US$1.5 billion – a headline number that shrinks fast once you do the maths, working out to roughly $5,000 per author.

The more consequential part of the ruling was on books Anthropic had legally purchased. The court agreed that scanning them to train its Claude model amounted to ‘fair use’, drawing on the same logic that let Google digitise millions of books. University of Auckland law academic Dr Alex Sims, writing in Newsroom, notes Judge William Alsup quoted Anthropic CEO Dario Amodei as preferring to avoid the “legal/practice/business slog” of licensing content through conventional channels.

New Zealand has no ‘fair use’ to fall back on

Here is the point most coverage misses. New Zealand does not have ‘fair use’. It has ‘fair dealing’, a considerably narrower set of exceptions. Dr Sims concludes that Anthropic’s conduct would be extremely unlikely to amount to fair dealing in New Zealand. The AI industry’s strongest defence in the US is largely unavailable here already.

That reframes the New Zealand debate entirely. The question is not whether the law protects creators – it probably does – but whether the government holds that line against lobbying to weaken it before a licensing market has time to form.

The government is running two copyright tracks

One track is already moving, driven by trade obligations. New Zealand’s FTAs with the UK and EU require extending copyright by 20 years, to 70 years from a creator’s death or publication, with deadlines in May 2028. Those changes also add fair dealing exceptions for parody and satire and give ISP-blocking powers against overseas piracy sites.

The second track, generative AI, has been deferred. Cabinet has asked Commerce and Consumer Affairs Minister Cameron Brewer to report back by 31 March 2027 on a possible framework. Brewer told the Herald in June 2026 that “issues around AI and copyright are complex, and different countries have taken various approaches”. The two tracks are more connected than they look: the 20-year extension strengthens exactly the rights that would underpin any licensing market.

Australia and the UK already blinked

AI firms have lobbied governments globally for text and data mining exceptions – carve-outs to train on copyrighted content without licence fees. Both Australia and the UK considered them and backed down after pushback. Australian Attorney-General Michelle Rowland said creatives “are the lifeblood of Australian culture, and we must ensure the right legal protections are in place”.

The alternative most experts favour is a market-based licensing model. In September 2025, Victoria University of Wellington law academic Graeme Austin argued that a broad exception would turn copyright owners into “unwilling donors of AI firms’ seed capital”. His analogy: “In much the same way a shop or bar pays a fee to play background music, AI licences would help copyright owners earn an income.” Austin also flagged the particular importance for Māori content, where uncontrolled scraping leaves communities no way to control or benefit from cultural material.

This is a much bigger business question than authors and musicians

Any New Zealand firm producing original content – publishers, media, software developers, design agencies, marketing shops, law firms, consultancies – holds intellectual property that can be scraped to train models. The framework from the March 2027 report decides whether that content becomes a licensing revenue stream or free raw material.

The enforcement gap is already biting. Copyright Licensing NZ CEO Sam Irvine told 1News in June 2026 that the delay carries “real risks, particularly for exporters”, and called for a low-cost complaints mechanism so people could seek redress “without going to court”.

For businesses using AI tools, the outcome cuts the other way: a licensing requirement could raise the cost of tools trained on New Zealand content. Either way, the framework design matters more than any headline settlement. That $5,000-per-author figure is the warning. New Zealand starts with the stronger legal hand. Whether it plays it before March 2027 is the only real question.

Sources

• Newsroom: NZ copyright law review targets AI training and creator compensation (2026-08-18)
• NZ Herald: Split Enz to benefit from Government copyright changes, Cameron Brewer to look at copyright in the AI era (2026-06-02)
• 1News: Copyright watchdog calls for tribunal to handle AI disputes (2026-06-07)