Adapting to AI: can UK copyright law cope?

In March 2023, Sir Patrick Vallance published his review on pro-innovation regulation for digital technologies. The report identified several issues faced by AI firms in accessing copyright-protected materials, and ultimately recommended drawing up a code of practice for this purpose.

No sooner had the ink dried on this recommendation, the UK government announced that it had dropped its plans for a code of practice on copyright following a failure to broker a deal between creative industry stakeholders and AI firms.

So, this begs the question, what’s next for UK copyright law and its approach to generative AI?

In this blog, we will take a look at the challenges under the current legal framework, and how the Government may look to address these issues whilst considering the interests of creative industry stakeholders and AI firms.

The current legal framework

The current legal framework in the UK does not allow copying of copyright-protected material for training generative AI models, except where it is carried out with permission of the copyright owner or done in a research or study context and for purely non-commercial purposes.

As a result, under current UK law, when an AI company wishes to scrape data from third party materials publicly available on the internet to train its models, it may need to obtain consent of the relevant right holder in order to do so. This is something we have previously looked at in the context of the ongoing Mumsnet v Open AI dispute.

Due to no established licensing framework for this purpose being in place, and generative AI models requiring vast amounts of data to learn, the process can be difficult to navigate.

An example of how these difficulties are currently playing out in the UK courts can be seen in the ongoing litigation between Getty Images v Stability AI. In this dispute, Getty Images, a well-known provider of stock images, alleges that Stability AI, the creator of a generative AI model called “Stability Diffusion”, scraped millions of images from Getty Image’s website without consent and used those images to train and develop Stable Diffusion.

This case, which is currently pending trial before the High Court in London,  has the potential to shape the future of copyright licensing and influence reforms to UK copyright law which could impact how attractive the UK is viewed as a place to develop generative AI models.

The future of UK copyright law and AI

Notwithstanding the impact that any AI/copyright-related judgments may have, the UK government only has a short window in which it can steer the UK towards establishing a positive outcome for the relationship between the law and generative AI.

When faced with what is a global challenge, the UK may look for inspiration from other parts of the world. In the EU, there is an exemption that permits copying for the purpose of training generative AI, except where the content owner has opted-out. This exemption is under Article 4 of the Directive on Copyright in the Digital Single Market (the “DSM Directive”).

The UK has decided not to implement the DSM Directive and instead it will develop its own regime to regulate the tech firms in the UK. If the requirements are different in the UK from the DSM Directive, this may pose a challenge for the larger AI firms providing services across Europe. For example, where an AI firm provides services in the EU, but the training of the generative AI model takes place outside of the EU. We have seen similar territorial-related challenges in relation to GDPR, which has an “extra-territorial effect” of applying to organisations that handle the data of EU citizens, regardless of whether they are EU-based organisations or not.

One possibility is for the UK to turn towards a system which compensates copyright owners for their role in AI training and incentivises them into allowing the copying to take place.  An ‘AI levy’ would attempt to ensure the payment of fair remuneration to creators.

However, the exact mechanisms of such a system are still unknown. The biggest challenge for the UK government will be to balance the interests of the creators, who will want fair compensation for the use of their work and transparency to enable clear monitoring, and the AI stakeholders, who will be interested in cheap and continuous access to vast amounts of accessible data.

One thing is certain, with growing concerns over its suitability and mounting pressure on the Government to act, changes to UK copyright law are imminent.

Our London based intellectual property litigation specialists have the expertise to deal with the legal issues that surround copyright, with a particular focus on dealing with these issues in the tech sector.

If you have concerns about copyright infringement that are affecting your business, please contact Waterfront here and a member of our IP & Disputes team will be in touch.