The Government’s much-anticipated Report on Copyright and Artificial Intelligence has been published, setting out its plans for an area that continues to attract significant controversy.

The Report follows the publication of a progress statement at the end of last year (commented upon here) and is the result of pressure from the House of Lords, who, whilst ultimately failing to introduce stronger protections for rightsholders in the Data (Use and Access) Act 2025 (DUAA), succeeded in including an obligation on the Government to report on the use of copyright works in the development of AI systems within nine months of the DUAA being passed.

It is not a short document: it runs to over 120 pages, setting out the background to the Government’s consultation, the options explored, and particular areas for policy development.

Given its length, we will doubtless revisit aspects of the Report in more detail in due course. For now, a number of important headline points can be taken away.

First, to the delight of many in the creative industries, the Government has confirmed that it no longer has a ‘preferred’ option of introducing a text and data mining exception alongside an ability for rightsholders to reserve their rights. This so-called ‘opt-out’ proposal was greeted with near universal opposition when it was first announced as the Government’s preference, prompting widespread campaigns and warnings about what the weakening of protections for rightsholders would mean for the UK’s creative industries (including the recent report from the House of Lords Communications and Digital Committee which we discussed here).

Second, whilst creators will welcome the clarity on that one particular point, significant uncertainty remains as to what will happen next on the broader question of whether, if at all, the UK’s copyright regime needs to be reformed for the AI age. Despite months of consulting with the various stakeholders and considering the thousands of responses to the consultation, the Government is adamant that it “must take the time needed to get this right” and that it will “not introduce reforms to copyright law until [it is] confident that they will meet [its] objectives for the economy and UK citizens”.

Third, while work continues on how to reach an overall solution acceptable to both rightsholders and AI developers, four areas covered in the Report have been identified by the Technology Secretary as being particular areas of focus for the next phase of work:

1. Digital replicas and deepfakes. The Government will launch a consultation later this year and intends to explore a range of options for addressing the risks associated with deepfakes while “protecting the potential of this technology to support legitimate innovation”. One such option includes the introduction of a new “digital replica or personality right”.

2. Labelling AI-generated content. After the recent publication of a Research Briefing on the subject (here), the Government will establish a taskforce to suggest proposals on best practice for labelling AI-generated content, and an interim report will be published in the autumn.

3. Creator control and transparency. A review will consider the mechanisms available for creators to control their works online, including standards, technical solutions, and best practice on input transparency.

4. Independent creatives. Finally, the Government will launch a working group to explore whether there is a role for Government to support independent and smaller creative organisations to license their content. It also draws attention to the launch of the Creative Content Exchange pilot, which we discussed here.

The Report is also accompanied by an Impact Assessment (also required by the DUAA), which evaluates the potential economic effects of the policy options explored in the AI and Copyright consultation, although the Government points out that there is still “limited and uncertain evidence on the impact of copyright on the development and deployment of AI in the UK” and commits to build this evidence base further.

For the Report and Impact Assessment in full, click here.