Authors: Kathy Berry & Noelle Huang
The UK government has published its Report on Copyright and Artificial Intelligence and an accompanying economic Impact Assessment evaluating the policy options in its recent copyright and AI consultation. The headline conclusion is that no reforms are imminent. Instead, the Government will continue to monitor, collect evidence and explore best practice before deciding whether to act. Significantly, the proposal in the consultation to introduce a broad text and data mining (TDM) exception with an opt-out for rightsholders is "no longer the government's preferred way forward".
Background
The UK government has been grappling with AI and copyright reform since 2020 when it launched its first consultation on AI and IP. Its initial plan to introduce a broad copyright exception for commercial TDM (with no opt-out) was scrapped in 2023 following a forceful backlash from the creative industries. A subsequent attempt to broker an industry code of practice on the use of copyright works to train AI also failed. A further consultation on AI and copyright ran from December 2024 to February 2025, this time proposing a TDM exception with the ability for rightsholders to opt out. The consultation garnered over 11,500 responses. This issue also proved contentious during the passage of the Data (Use and Access) Bill, with the House of Lords seeking to introduce copyright and AI provisions into that legislation. The compromise reached and recorded in sections 135 and 136 of the Data (Use and Access) Act 2025, required the Government to publish a report on the use of copyright works in the development of AI systems and an economic impact assessment of each of its consultation policy options. Both reports were published on 18 March.
The reports
The Report on Copyright and Artificial Intelligence and Copyright and AI Impact Assessment run to 125 and 52 pages respectively, spanning legal history, consultation responses, international positions, policy conclusions, and economic analysis. The key conclusions are as follows.
- No new AI training exception (for now)
A broad copyright exception for TDM with the ability for rightsholders to opt-out is no longer the Government's preferred way forward. The creative industries feared that this would allow their works to be used without compensation and in direct competition to them. AI developers on the other hand, while broadly supportive of copyright exceptions, were concerned that a high take up of opt-outs would undermine the purpose of the exception. As well as this lack of consensus, the Government cites ongoing gaps in the evidence base, fast-moving international developments, including continuing EU court consideration of its own equivalent exception, and a rapidly evolving technology landscape as reasons to pause. No reforms will be introduced until it is confident they will meet the twin objectives of protecting the UK’s creative industry and unlocking the economic potential of AI. So, for the time being, it will continue to watch and wait.
- Transparency re inputs and outputs
The Report reveals that over 90% of consultation respondents agreed that AI developers should disclose the sources of their training material, and so movement in this area is likely. However, the Government’s current proposals are limited to monitoring the effect of transparency rules in other countries and developing industry-led best practices. Regulation in this area is not currently on the table. The same light-touch approach applies to the labelling of AI-generated content, where again the Government will monitor and explore good practice rather than legislate.
- Licensing: Government will not intervene
The broad conclusion on licensing copyright content for AI use is that it should continue to be a commercial negotiation between the parties involved, and government intervention is both unjustified and unwelcome. Government’s role should be limited to ensuring that market conditions exist to allow licensing to flourish. For now, proposals are limited to monitoring emerging international approaches (for example, India is currently considering a statutory licensing model requiring AI developers to pay royalties distributed through a collective management organisation). The UK will also support access to valuable datasets including through the Creative Content Exchange, a pilot marketplace involving content from British cultural institutions.
- Computer-generated works: legislative change ahead?
UK law grants copyright protection for wholly computer-generated works.1 The Government proposes to continue monitoring the value of this protection but has signalled that it will be removed in the absence of evidence justifying its retention (the Report notes that most jurisdictions do not provide copyright protection for computer-generated works, including the US and China, both of which experience higher investment in AI than the UK). This is the firmest suggestion of legislative reform in the Report and could be significant for businesses relying on copyright protection for wholly AI-generated works: ensuring meaningful human creative involvement in the generative process is now the safer route.
- Digital replicas: a new personality right under consideration
UK law provides no general right of personality, and the existing patchwork of legal protections may not adequately address the growing risk of non-consensual AI-generated replicas of a person's voice or likeness. The Government proposes to explore a range of options, including whether a new statutory personality or digital replica right would be appropriate, but stops short of committing to any specific reform. This is an area to watch carefully, as the implications of such a right could extend beyond the AI context, reshaping how individuals in the UK can control the use of their likeness and voice in media and entertainment more generally.
Comment
The overarching theme of this report is deferral. Despite significant industry pressure, the Government's response is to monitor, explore best practice, and wait for international developments to take shape before committing to any real action. Rightsholders can take some comfort that their existing protections remain intact. However, the report offers little in the way of immediate resolution and will disappoint those on either side of the debate who were hoping for swift action or a clear direction of travel.
1Section 9(3) Copyright, Designs and Patents Act 1988.