The Intellectual Property Implications of AI: What does your organisation need to know?

The UK Government published its ‘AI Opportunities Action Plan’ on the 13 January 2025. While the action plan looks to fast track AI development and investment, regulatory guidance of Artificial Intelligence (AI) in the UK remains largely unaddressed. Although the adoption of AI technology undoubtedly offers crucial creative benefits to organisations, the action plan highlights the considerable ambiguity surrounding the intellectual property (IP) implications for organisations using AI tools.

In this article we explore some of the intellectual property issues associated with AI, the current approach to regulation in this area and examine key IP considerations for organisations using AI.

Key Issues

AI Training: Generative AI tools require large amounts of data from which to train. However, not all of the sources used by such tools have been publicly disclosed, making it challenging for IP rights holders to identify potential uses of their materials. Using copyright protected works to train an AI tool may involve an infringement of the copyright or database right of the relevant IP owner by the developer of the tool.

IP Protection: Whether or not AI generated works are protected by IP, in particular copyright, is not straightforward, and is treated differently in various countries. The UK is one of very few countries that specifically recognizes copyright protection for 'computer-generated works'. In the UK, for a work to be original, it must be 'the author’s own intellectual creation' and 'reflect their personality'. How this test applies in relation to AI generated works is not yet clear.

IP Infringement: The content produced by AI tools may also potentially infringe a third party's IP rights. AI tools do not work by simply reproducing a copy of what is in their dataset, meaning it is unlikely that there will be an exact reproduction of a copyright work in an output. Nevertheless, the content produced is based on those training materials, and so such content may be similar to works on which they have been trained. Infringing outputs could lead to claims against both developers of AI tools, as well as users.

Regulatory Approach to AI

In the UK, Regulators and legislators have been battling to determine how to deal with the IP issues presented by generative AI. Most recently, the UK Government issued its much-anticipated consultation on Copyright and Artificial Intelligence.

To accelerate growth in both the creative industries and AI sectors the UK Government proposes an approach which aims to enhance right holders’ control of their material whilst also supporting wide access to high-quality material to drive development of leading AI models in the UK.

At the heart of this framework is the introduction of a text and data mining exception, with a view to providing easy access for AI developers to the creative content they need to develop their AI models, with the onus being on right holders to opt their works out. The proposal also seeks to eliminate existing ambiguity in the law as well as exploring contemporary AI issues such as “deepfakes”.

Additionally, as a consequence of post-Brexit regulatory conflict, organisations in Northern Ireland should also be aware of the potential implications of the newly established EU AI Act. Whether the Act will substantively apply to NI is presently uncertain, however it is worth noting that whilst the UK approach to AI and IP will likely share similarities with the EU approach, NI organisations should at least prepare for divergences in relation to the EU’s more stringent transparency requirements.

Practical Considerations for Organisations

In anticipation of greater clarity from regulators and policymakers alike, organisations using generative AI tools should consider putting in place a number of measures to seek to mitigate the risk of IP infringement, as well as dealing with potential issues over protection and ownership, including (but not limited to):

• Implementing clear policies within your organisation for the use of AI tools taking account of any potential risk of third party IP rights.
• Conducting thorough infringement risk assessments.
• Reading the terms and conditions carefully before using an AI generative platform to assess how the platform might use any data and materials inputted. There may be copyright works, proprietary and confidential information and other types of data that you do not wish the platform to be able to access and use.
• Monitoring digital and social channels for the appearance of works that may be derived from your own.
• Update your terms and conditions to restrict (or otherwise monetise) the use of your organisation’s IP works by AI tools.

Keir Starmer’s pledge to turn the UK into an “AI superpower” only confirms what we already knew; AI is not only the future but also the present. As such, organisations must ensure they consider the intellectual property implications of AI or risk facing unwanted, costly litigation as demonstrated by the ongoing Getty Images vs Stability AI case before the High Court where Getty has claimed that Stability is responsible for infringing its intellectual property rights, in using its images for the purposes of training as well as reproducing in substantial part its copyright works.

If you would like any further information or advice please contact Karla Dooey or another member of the Commercial team.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.