The rapid advancement of artificial intelligence (AI), particularly generative AI technologies, continues to challenge established legal frameworks. In the UK, one of the most significant areas of focus has been the interaction between AI and copyright law. AI systems increasingly rely on vast quantities of data, much of which may be protected by copyright. The question of how such use is regulated has become both commercially and politically important.
In response, the UK Government has undertaken a detailed review of copyright law as it applies to AI. Its report, published in March 2026 following an extensive consultation process, provides insight into the direction of travel and highlights the legal and commercial implications for businesses operating in this space.
Innovation and Rights Protection
At the heart of the Government’s review lies a fundamental issue. On one side sits the need to support innovation and maintain the UK’s competitiveness in AI development. On the other is the longstanding principle that creators and rights holders should be able to control, and benefit from, the use of their work.
AI systems are typically trained on large datasets. These datasets can include text, images, audio and other materials that are often protected by copyright. While existing UK law does include a limited exception for text and data mining, its scope is restricted, particularly where use is for commercial purposes. As a result, many AI developers operate in an area of legal uncertainty.
The Government has considered a range of possible approaches, including expanding existing exceptions, introducing opt-out mechanisms for rights holders, and requiring licensing arrangements for the use of protected works. However, the 2026 report stops short of implementing immediate legislative change. Instead, it reflects an ongoing effort to strike an appropriate balance, with further policy development anticipated.
Ongoing Risk of Copyright Infringement
Beyond the training stage, copyright risk also arises in relation to the outputs generated by AI systems. Although AI-generated content may appear novel, there remains a possibility that it reproduces, or is substantially similar to, existing protected works. This creates potential exposure for businesses that rely on AI-generated materials in a commercial context, whether in marketing, product development or client deliverables.
The legal position in this area is still evolving, and there is limited case law addressing AI-specific infringement scenarios. Nevertheless, the direction of policy suggests that courts and regulators will take an increasingly close interest in how such systems operate and the extent to which safeguards are in place.
Ownership and Use of AI-Generated Content
The Government’s review also revisits the concept of computer-generated works under UK copyright law. While the UK has historically recognised copyright in works generated without a human author, the application of these provisions to modern AI systems is far from straightforward.
For businesses, this raises practical questions around ownership and commercial exploitation. Where AI tools are used to generate content, it is not always clear whether copyright subsists in the output, and if so, who owns it. This uncertainty can affect licensing arrangements, client contracts and the broader value of AI-generated assets.
Implications for Businesses
Businesses engaging with AI should expect increased regulatory attention and a gradual shift towards more structured approaches to data use and rights management.
In practical terms, organisations would be well advised to take a more proactive approach to governance. This includes understanding what data is being used in AI systems, ensuring that contractual arrangements with suppliers adequately address intellectual property risks, and keeping developments under close review. It may also become increasingly important to consider licensing strategies where AI systems rely on third-party content, particularly as market norms begin to evolve.
Looking Ahead
The UK Government’s review forms part of a broader international debate on how copyright law should respond to the rise of AI. While the UK has, for now, taken a measured approach, the issues identified in the 2026 report are unlikely to dissipate. Further consultation, guidance and potentially legislative reform can be expected.
If you would like to discuss any of the topics discussed in relation to your business, please get in touch with our commercial team on 02920 345511 or at commercial@berrysmith.com.