How will the new UK government resolve the conflict over AI development and IP rights?

The previous government promised but failed to deliver a voluntary code of practice to give clarity on the relationship between intellectual property (IP) law and artificial intelligence (AI). The newly elected Labour government will need to grapple with the issue and provide certainty for the creative and AI sectors.

Labour had given some indication of its approach in its plan for arts, culture and creative industries and, before the dissolution of Parliament in advance of the general election, the House of Commons Science, Innovation and Technology Committee set out steps that it urged the next government to take. We consider what the next steps might look like now that Labour will form the government.

AI v IP?

Some of the most powerful AI models, including those that underpin generative AI systems, are trained on publicly-available content. This is typically scraped from the internet, much of which will be protected by IP rights.

The creative sector generally takes the position that using IP-protected content to train AI models, which can then be used to create potentially competing content, is an infringement of the relevant IP rights unless licences with rightsholders have been agreed.

AI developers typically maintain that this use is fair and transformative and that to require them to obtain licences from all rightsholders would have a stymying effect on technological advancement.

There is intense lobbying on both sides of the debate and the issues are currently being litigated before the UK courts in Getty Images v Stability AI, but this is not due to come to trial until summer 2025.

Due to the lack of clarity, the debate has continued to intensify and it is something the new Labour government will need to take a clear stance on.

Previous government's approach

The previous government had originally said that it would widen one of the existing copyright infringement exceptions – the text and data mining (TDM) exception. At present, this only protects those carrying out "computational analysis" on lawfully accessed works for the "sole purpose of research for a non-commercial purpose" and therefore is typically interpreted as excluding commercial TDM.

The previous government had proposed to extend this exception to cover TDM for any purpose, which would have covered both copyright and database rights and would not have allowed rightsholders to opt out.

This proposal was extremely controversial and received strong complaints, particularly from the creative sector. After this criticism, the government U-turned and instead pursued a voluntary code of practice, which it also did not deliver during its time in office.

Labour's approach

Although Labour has not yet revealed its in-depth plans, its strategic plan for arts, culture and creative industries, released in the run up to the general election, sets out a number of headline actions it will take. These include: "find[ing] the right balance between fostering innovation in AI while ensuring protection for creators and the ongoing viability of the creative industries".

The plan also states that the success of British creative industries to date is due to our robust copyright framework, noting that strong IP protection is "critical to investment levels within creative industries especially within TV, film and music", as well as the publishing industry. This perhaps suggests a greater focus on upholding rightsholders' interests. However, Labour's election manifesto also asserted that it would ensure that its focus on industrial strategy supports the development of the AI sector.

Labour's plan suggests that finding the right balance between interests will require "thoughtful engagement and consultation with the creative industries and with companies driving AI development". It is not clear how this would differ from the consultations carried out by the previous government that failed to lead to agreement on a voluntary code of practice.

Nonetheless, the plan is clear that Labour will "support, maintain and promote the UK's strong copyright regime", including in trade deals and by working with international partners who are also tackling the same issues. The plan underscores that "Labour believes in human-centred creativity and the potential of AI to unlock new creative frontiers".

Licensing framework?

Just before the dissolution of Parliament, the Commons Science, Innovation and Technology Committee published its last report of the 2019-2024 Parliament relating to its inquiry into the governance of AI. The committee urged the next government to "broker a fair, sustainable solution based around a licensing framework governing the use of copyrighted material to train AI models". It also cautioned that "[t]he status quo allows developers to potentially benefit from the unlimited, free use of copyrighted material, whilst negotiations are stalled".

The committee made reference to the increasing number of legal proceedings and the high value of quality data needed to train AI models, noting that this underscores the need for a sustainable framework.

Ultimately, it said that the government must conclude discussions on the use of copyright works to train AI and agree an implementable approach. It suggested that inevitably this will involve financial settlement for past infringements by AI developers, the negotiation of a licensing framework to govern future use, and establishing a new authority to operationalise the framework. If this cannot be achieved voluntarily then it suggested that it should be enforced by the government in cooperation with international partners.

Osborne Clarke comment

Unsurprisingly, before the election, Labour tried to put forward a balanced approach to this issue, indicating that it will both support creators' IP rights and ensure its industrial strategy plans facilitate the development of the AI sector. However, this is similar to the last government's approach, which failed to yield any agreement or clarity.

The new government will need to commit to a clear route ahead and, as the Commons Science, Innovation and Technology Committee has urged, this seems likely to be a licensing framework. However, the devil is in the detail, and exactly what this might look like is unclear and whether it can be achieved voluntarily remains to be seen. Legislative action may be necessary but this is unlikely to be a quick solution given the complexity of the problem.

Although the nature of the relationship between IP rights and AI is currently being tested before the UK courts, we will not receive a judgment for some time yet and it is likely that Labour will need to take more decisive action before then. The new government will have a range of issues to deal with and it is not yet clear what level of priority resolving this issue will be given. We may get some clarity in the King's Speech on 17 July 2024 so watch this space for the next move.