World's greatest IP thieves propose crackdown on IP theft

It's not even IP. Model outputs are not protected (to the best of my understanding).

It's worth adding that distillation is not a violation of whatever valid copyright interests a model maker may have (if any). The US Copyright Office has already said AI model-generated output by itself isn't copyrightable. Unless new regulations or laws are enacted, distillation will remain, at most, a customer violating a term of a provider's commercial ToS/EULA.