UK government announces that UKIPO proposals to introduce TDM exception will not be proceeding.

On 1 February 2023, George Freeman MP the (then) Minister of State for Science and Investment Security in the recently defunct Department for Business, Energy and Industrial Strategy stated in a House of Commons debate on the impact of artificial intelligence (AI) and IP rights for creative workers that the UKIPO’s proposal to introduce a general text and data mining (TDM) exception to copyright and database rights will not be proceeding.

The TDM exception

TDM is the application of automated computational techniques to data in order to identify patterns, trends and other useful information and is commonly used in the development of AI systems. The UKIPO published a consultation on AI and IP in October 2021 which considered, amongst other issues, the interaction between AI technology and IP rights, including the scope of exceptions to IP rights for TDM (as reported here).

In June 2022, the UKIPO published a response to its consultation, with a specific focus on AI, copyright and patents (as reported here). It proposed a new “all-out” exception to copyright and database rights for commercial TDM, so long as the beneficiary of the exception had “lawful access” to the relevant data. This would have allowed commercial TDM with no option for the rights holder to opt out, clearly favouring researchers and AI developers over rights holders. The proposed exception was presented as making the UK a location of choice for data mining and AI development and supporting the Government’s ambition for the UK to be a global leader in AI innovation.

Since that publication, however, Parliament’s Communications and Digital Committee recommended in January 2023 that the proposed changes to the TDM regime be paused and the implications for the creative industries of such an exception be assessed. This has been followed by the latest announcement that the proposed TDM exception shall be discontinued.

Why is the proposal being discontinued?

There are major concerns in the UK’s creative industry that the TDM exception, as proposed in June 2022, will negatively impact those with copyrighted works on the internet. English law currently permits the reproduction of copyrighted works for computational analysis by someone with lawful access to the work for non-commercial research along with the creation of certain transient and incidental copies of a work . As such, commercial TDM carried out in the UK generally requires the licensing of rights holders’ IP to avoid potential claims for infringement. The proposed exception would have enabled businesses to “scrape” content protected by copyright and database rights from publicly accessible sources to train their AI systems without needing to pay the rights holders or obtain their permission.

The Minister’s statement noted that rights holders’ concerns need to be balanced against the drive to promote investment in AI development in the UK and the need for access to commercial TDM to allow AI companies to grow their product. A more detailed consultation has been suggested before any further proposals are made, with the aim of finding a “middle ground”.

Comment

The decision to drop the UKIPO’s proposed exception is unlikely to be the final word on TDM exceptions in the UK, as they form part of a much wider and socially significant debate regarding the intersection between AI technology and human creativity. This debate has been turbocharged by recent leaps forward in generative AI systems, many of which have reached public consciousness in the months following the UKIPO’s decision last summer. This has in turn driven huge investment into the development of generative AI systems, with the availability of TDM exceptions becoming a material consideration when deciding where to locate research and development for these systems. Other jurisdictions such as the EU, Japan and Singapore have adopted more permissive TDM exceptions than the UK. Jurisdictions with fair use exceptions to copyright such as the US and Israel are also viewed as more permissive for AI development than the UK.

Balancing the interests of rights holders and AI developers is not always a zero sum game. A robust licensing environment which provides access to a broad range of high quality datasets may be in everyone’s interest. However, a key challenge is how to license datasets which contain data from many online sources where it is impractical to identify and request permission from each individual rights holder. This is the area where a commercial TDM exception or some form of collective licensing is likely to be most welcomed by AI developers and where the UK finds itself in competition with other jurisdictions to attract AI investment.

The UK appears to have stumbled with its current attempts to balance the interests of rights holders and AI developers. While it tries again, the technology will continue to evolve, and companies will continue to take decisions about where to locate their research and AI development.