We previously discussed the UKIPO's consultation into artificial intelligence and intellectual property in December 2021 (Artificial Intelligence and Intellectual Property: what next for the UK?) and the outcomes in July 2022 (Proposed changes to copyright law to facilitate data mining). The key outcome of that consultation is now being re-considered by the UKIPO.

Outcome of the consultation

The key outcome of the consultation was to introduce a new text and data mining (TDM) exception, which would considerably expand the scope of the current exception for computational analysis. The current exception provides that the making of a copy of a work does not infringe copyright where this is done for the purpose of computational analysis for non-commercial research. In order to make the UK an attractive jurisdiction for AI development, the new exception was to cover TDM for any purpose by anyone, without a system that would allow rightsholders to opt-out. Further, this new exception was to apply to both copyright and database rights.

Backlash from creative industries

The decision to proceed with this new exception for TDM without an opt-out system has been subject to significant backlash from creative industries in recent months. One significant concern from creative industries is that the exception would result in no economic reward for artists where their works are used for commercial gain by AI companies. Another major concern is that generative AI systems created by those companies already threaten creative industries and the proposed exception served to further undermine the competitiveness of natural persons. Indeed, we are already seeing these concerns translating into litigation: in January 2023, Stability AI and Midjourney's AI image generators became the subject of a class action filed in the Northern District of California.

Response from the UK Government

As such, from as early as November 2022, the Minister of State for Media, Data and Digital Infrastructure (Ms Julia Lopez) was saying publicly that she was fairly confident the proposed TDM exception was not going to proceed. In February 2023, the Minister for Science, Research and Innovation (Mr George Freeman), who has responsibility for Government policy on AI and IP, made clear that he and Ms Lopez did not want to proceed with the original proposals citing the huge reaction from creative industries.

Mr Freeman has expressed a need to re-engage with the industry, through the UKIPO, to ensure that future proposals command the support required for them to succeed. It is unclear at this time whether the UKIPO will formally re-run its consultation in relation to the TDM exception or whether it will simply opt for one of the other, less expansive options, floated during the consultation stage. These included:

• improving the licensing environment by creating model licences and codes of practice for copyright licensing in the context of text and data mining;
• extending the current copyright exception to cover commercial research and databases; and
• introducing a new exception for TDM conducted for any purpose by anyone, but with an opt-out system for rights holders to carve out their works (similar to the EU).

What next?

For now, the UK is left with its current exception, only covering non-commercial research, which is generally more restrictive than other jurisdictions around the world. We are keeping a close watch on developments in this area because the increasingly impressive outputs from a variety of generative AI systems has clearly set hares running.