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It was a viable fair use defence right up to people decided there was $ value in LLM.

Once there's value, then the IPR laws come to bear. It's beyond academic use, and into productisation. It's an unlicensed downstream use, exceeding any prior agreement.

I think (not sure though) that the Berne Convention requires Australian law to treat foreign books in the same way as Australian books so the reference to "Australian books" is a rhetorical flourish, not legally relevant.
and yet "publishers" are out for archive's blood for doing a temporary lending program during the worst time in recent human history collectively?

yeah, fuck them