AI is moving fast, the law isn’t – what does that mean for copyright?

The UK Government has moved away from its previously preferred approach to regulating the relationship between AI and copyright. In its Copyright and AI consultation, which ran from December 2024 to February 2025, it backed an opt-out model that would have allowed AI developers to use works protected by copyright for training unless copyright owners actively opted out.

On 18 March 2026, the Government published its Report on Copyright and Artificial Intelligence, together with an accompanying impact assessment. In a written statement to Parliament on the same day, Liz Kendall, the then Secretary of State for Science, Innovation and Technology, confirmed that the approach had been ‘overwhelmingly rejected by the vast majority of the creative industries’ and said the Government no longer had a preferred option. It has also said it will not reform copyright law until it is confident any changes will work. A broad text and data mining exception is not being taken forward, but alternatives remain under consideration. These include a targeted exception for scientific and commercial research covering material to which the developer already has lawful access, an exception for public interest uses such as online safety and content moderation, and a broad exception paired with a statutory licence or levy, under which developers could train on protected works without permission but would be required by law to pay for doing so.

In her statement, the Secretary of State identified four areas for the next phase of work, namely digital replicas, labelling AI-generated content, creator control and transparency, and whether the government can support independent and smaller creative organisations in licensing their content. Separately, she confirmed that the Creative Content Exchange, a trusted marketplace intended to allow digitised cultural and creative assets to be licensed at scale, which was first announced in the Creative Industries Sector Plan in June 2025, has entered a pilot phase with an early adopter cohort of public institutions. That pilot began in December 2025 and runs until December 2026.                   

Since the Report was published, the lead department has been broken up. On 21 July 2026 the Department for Science, Innovation and Technology was abolished. Science and innovation moved to the renamed Department for Business, Innovation, Science and Trade, digital policy to an enlarged Department for Digital, Culture, Media and Sport, and AI strategy to the Cabinet Office, where a Minister of State for Artificial Intelligence, appointed jointly with the new business department, now attends Cabinet.

How could the copyright consultation on AI impact your business?

Businesses that create original content may welcome the move away from an opt-out system that many saw as unrealistic to monitor or enforce. But the lack of a position leaves many SMEs to make decisions about licensing, marketing content, training data and AI use without a clear and certain long-term framework. That creates risk for businesses on both sides, whether they are protecting their own IP rights or using AI tools in day-to-day operations.

Senior Contentious Intellectual Property Solicitor, Gosia Evans, says:

The statement made by the Secretary of State confirms the Government's departure from its original preferred position of creating an ‘opt out system’ whereby copyright owners would have the right to opt out from their works being used for AI training. From the outset, my view has been that this option would be impractical and that it would not offer adequate protection to copyright owners. This is a welcome statement in that regard, and it indicates the Government has recognised the significant concerns rightly expressed by the creative sector.

We need the Government to take decisive steps in the context of regulating AI and copyright. This is long overdue. The consultation was launched in 2024. More than nineteen months later, the rapid development of AI has been causing multiple practical problems for our clients and us as their legal advisers for a while. The current inadequate legal landscape is already leaving copyright owners at risk. The Government simply cannot sit on the fence any longer, but it seems, based on the March Statement, that no significant changes will be taking place anytime soon.

The Creative Content Exchange (CCE) proposal, if executed well, could address some of the concerns of copyright owners, however, those practical solutions must be urgently prioritised.

Practical steps to take now

This is a sensible moment to review where valuable IP sits in your business, check contracts and platform terms, and put clear guardrails around staff use of generative AI. Businesses that create or license content, rely heavily on brand assets or are building AI into their software code, products or services should take advice early. The law may not have evolved as swiftly as we wished for yet, and it may not be possible to confidently assess the legal position, particularly in the context of copyright and AI, in all circumstances. The commercial risks are already here, and it is important for you to be aware of the IP assets you own, their protection and potential pitfalls associated with your use of AI. 

If your business is producing original content, creative assets or other valuable IP, it is worth taking advice now on how best to protect it. Our copyright lawyers can help you review ownership, strengthen contractual protections and reduce the risk of your rights being undermined as the AI landscape continues to evolve. 

And for more expert insight from Gosia, check out our video on Copyright in the age of AI: who owns what?