UK Government Drops Opt-Out Proposal in Copyright and AI Report, March 2026

The Department for Science, Innovation and Technology (DSIT) published a statutory report and impact assessment on copyright and artificial intelligence on 18 March 2026. The publication was required under sections 135 and 136 of the Data (Use and Access) Act 2025. In it, the UK government confirmed that it will not proceed with the previously preferred approach of an opt-out mechanism that would have allowed rights holders to exclude their works from AI training data. The report marks the close of the government's consultative process on this issue and sets out the policy direction for future legislative action.

The statutory obligation to produce this report derives from sections 135 and 136 of the Data (Use and Access) Act 2025. Section 135 requires the Secretary of State to lay before Parliament a report on the relationship between copyright law and the development and use of AI systems. Section 136 requires an accompanying economic impact assessment. The published report addresses the tension between the existing exclusive rights granted to rights holders under the Copyright, Designs and Patents Act 1988 and the commercial practice by AI developers of ingesting large corpora of protected works for model training without individual licences.

The practical effect on market participants is immediate. AI developers operating in the UK can no longer rely on a prospective opt-out mechanism to licence training data. Rights holders — including publishers, authors, and music and film rights owners — retain their existing exclusive rights under the 1988 Act without any new statutory exception for AI training. Developers that have already ingested protected works without consent face unresolved copyright exposure. The government states it will instead pursue a voluntary licensing code and transparency obligations, though no draft code or timetable for legislation was published alongside the report.

The report leaves several questions open. No new statutory exception has been enacted as of the report date. The government's preferred alternative — a voluntary licensing code developed through industry dialogue — has no binding legal force until Parliament legislates. The economic impact assessment published alongside the report acknowledges a range of modelled outcomes but does not establish a definitive measure of harm to rights holders or benefit to AI developers. Pending further government action, existing copyright enforcement remedies under the 1988 Act remain the operative legal tools for rights holders.

Prokopiev Law Group advises AI developers, technology platforms, content owners, and rights management organisations on matters arising at the intersection of copyright law and AI regulation. We maintain a dedicated partner network covering UK and cross-border intellectual property matters. Parties with questions regarding training data licensing, copyright exposure arising from AI development, or compliance with evolving UK legislative requirements are welcome to contact us. Our practice covers: AI training data licensing, copyright infringement analysis, rights clearance for machine learning datasets, AI governance and compliance, cross-border IP enforcement, and related regulatory advisory work.

Source: Department for Science, Innovation and Technology, "Report and Impact Assessment on Copyright and Artificial Intelligence," published 18 March 2026, pursuant to ss.135–136, Data (Use and Access) Act 2025. Official URL: https://www.gov.uk/government/publications/report-and-impact-assessment-on-copyright-and-artificial-intelligence

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